Indian renewable energy credits hit record low amid sluggish demand

Platts' assessment for renewable energy credits from India hit a record low of 65 cents/mtCO2e Oct. 31 as sluggish buying interest persisted in the market amid mounting supply pressure concerns.

The assessment was down from $1.30/mtCO2e on Oct. 31, 2024, marking a 50% decline year over year. It was launched on Aug. 9, 2021.

A few traders and brokers said participants with high inventories were considering selling their credits at lower price levels, leading to a softening of prices in the spot market.

"There is ample supply in the market and inventory holders are waiting for an uptick in demand as we move into November to try and offload credits at a higher price," an India-based trader said.

Total issuances in the renewable energy segment in September increased by a little over 251% month over month, reaching more than 7 million credits, Platts data showed.

Issuances from Verra in September exceeded 3.3 million credits, compared to 579,591 credits in August, while Gold Standard issuances rose by nearly 161% from 1.43 million in August to 3.7 million credits in September.

Year-end headwinds limit recovery potential

Market sources said that participants were anticipating developments from the COP30 UN Climate Change Conference in Brazil in November for insights into market direction, which contributed to a slowdown in market activity.

"Usually, market response remains lukewarm in the run-up to the year-end holidays and gradually picks up once participants return to their desks," the India-based trader said.

The trader added that Indian buyers were the primary demand source for Indian renewable credits, while buyers in Europe were considering cheaper global alternatives, such as Turkish credits.

"Even if demand improves in November, especially from buyers in Europe, it will probably not last through December," a second India-based developer/trader said.

Activity in the renewable energy market remained stagnant throughout October, with demand failing to materialize despite earlier expectations of a fourth-quarter recovery.

Earlier, a third India-based developer/trader said they had around 500,000 mt of renewable energy credits in their inventory as they expected demand to recover during November-December.