Record Global Carbon Markets Value Reaches $949 Billion
Global Carbon Markets Hit Record High in 2023
The value of traded global markets for carbon dioxide (CO2) permits reached a record 881 billion euros ($948.75 billion) in 2023, marking a 2% increase on the previous year, analysts at LSEG said on Monday.
Countries and Regions Implement Emissions Trading Systems
Many countries and regions have launched emissions trading systems (ETS) to put a price on carbon dioxide (CO2) emissions and incentivize companies to invest in low carbon technology and help meet climate targets.
Stable Carbon Permit Volume with Record Prices
Around 12.5 billion metric tons of carbon permits changed hands in the world’s emissions markets, similar to 2022, but record prices in several markets such as Europe and North America pushed up the overall value, the LSEG Carbon Market Year in Review 2023 said.
EU ETS Remains Most Valuable Carbon Market
The world’s most valuable carbon market, the EU’s ETS, was worth around 770 billion euros last year, up 2% from the previous year and representing 87% of the global total.
Volatility in Carbon Permit Prices
The price of carbon permits in the EU ETS hit a record high over 100 euros in February last year but fell towards the end of 2023 amid weak demand from industrial buyers and the power sector.
Challenges for Carbon Markets in the Near Term
“Economic growth is likely to remain sluggish in the near term across Europe and is expected to lead to further demand destruction from many of the industrial sectors covered by the EU ETS,” the report said.
Changes in UK and North American Carbon Markets
The value of the UK’s ETS fell 22% to 36.4 billion euros with prices averaging around 65 euros/ton, some 34% lower than the 2022 average, the report said. In North America, prices hit record highs last year in the main compliance markets.
Record Highs in Chinese Carbon Market
Prices in China’s national ETS also hit a record high in 2023 of 80.51 yuan ($11.19) in October, the report said. The North American markets were worth a combined 71.4 billion euros while the Chinese market was worth 2.3 billion.
($1 = 0.9286 euros)
($1 = 7.1929 renminbi)
