Kenya, Singapore, UK launch coalition to boost carbon credit demand

The governments of the United Kingdom, Singapore and Kenya launched a coalition June 24 to strengthen voluntary demand for carbon credits by providing businesses with clearer guidance on using high-integrity credits.

The Coalition to Grow Carbon Markets plans to issue a clear set of shared principles on the voluntary use of high-integrity carbon credits at the UN Climate Change Conference in Belem, Brazil in November to provide consistency in approach across jurisdictions.

"Through this new Coalition, we're giving businesses the clarity they need to invest in high-integrity credits that drive real impact for climate and nature, unlocking carbon markets as a trusted tool in accelerating towards net zero," said Kerry McCarthy, Minister for Climate, UK Government.

This comes at a pivotal time for the voluntary carbon market, which has undergone a lengthy period of intense and critical scrutiny.

Criticism of the quality of some carbon projects has had major repercussions on offset prices, with scrutiny dissuading some companies from participating in the market.

By establishing these shared principles, the coalition seeks to boost business confidence in carbon credit purchases, which could expand the voluntary carbon market to as much as $250 billion by 2050.

France and Panama have also joined as founding members, with Peru endorsing the coalition's mission and additional countries expected to join in the coming months.

Prices of credits have taken a big hit in the past 24 months amid a fall in liquidity.

Platts, part of S&P Global Commodity Insights, assessed current year household device carbon credits at $3.10/mtCO2e on June 23, marginally up from a record low of $3/mtCO2e seen from mid-May to mid-June,

The Coalition to Grow Carbon Markets is supported by a Secretariat hosted by the Voluntary Carbon Markets Initiative, with the International Chamber of Commerce and World Business Council for Sustainable Development acting as partners.