Household Devices carbon credit prices slump as interest wanes

The Platts Household Devices assessed price has dropped strongly since early June on dwindling interest while expected future issuances were starting to weigh in, market sources told S&P Global Commodity Insights. In the six-week period from June 8 to July 20, the price dropped by 13%.

The segment, traditionally perceived to be highly resilient, was able to keep its head above water in the immediate aftermath of the Ukraine invasion, while other credit segments saw sharp drops.

In the seven-week period from April 29 to June 17, 2022, the Platts Household Devices Current Year price was consistently assessed above $10/mtCO2e. However, by the end of June, the price had dropped below 10/mtCO2e. On July 20, it was assessed at $9.10/mtCO2e reflective of the steep dip seen the last few weeks.

A broker told S&P Global Commodity Insights that interest in the segment seemed to have waned recently.

"People can offer credits for $10/mtCO2e all they want, but I don't see buyers buying at that level," said the source. "Sellers will not want to hear that, but I don't think they get interest any higher."

A second source, a trader, said they weren't seeing many reported trades in the segment because of the spread between what buyers were bidding and sellers were offering.

"Neither side is willing to cross the spread," said the trader.

A third source, a broker based in Asia, said expected future issuances were starting to weigh in on the price.

Earlier when household devices credits were seen to be a high demand segment with thin supply, it was able to buck the falling trend seen in other segments in the March-May period. But with developers across the globe applying for certification of credits and expecting issuances, prices are expected to dip.

A fourth source, a broker, said that they were perplexed by developers offering credits at prices way above market rates. The source said a developer had offered cookstoves credits to them at $21/mtCO2e for 10,000 mt credits from Uganda. The certification and vintage were GS 2018.

"I really can't understand why the price was like that. I asked the developer. They said it was a high SDG project priced according to the market. But it makes no sense. That's not where the market is. Are such developers even getting any buyers? I am very curious. Are some end-users actually paying these prices?" wondered the source.

The source clarified that the prices were too high for them and so they rejected them.