Voluntary carbon markets set to become at least five times bigger by 2030 - Shell - Energy News, Top Headlines, Commentaries, Features & Events

Equipment used to capture carbon dioxide emissions at a coal-fired power plant in Thomspsons — Equipment used to capture carbon dioxide emissions is seen at a coal-fired power plant owned by NRG Energy where carbon collected from the plant will be used to extract crude from a nearby oilfield in Thomspsons, Texas, U.S. on January 9, 2017. REUTERS/Ernest Scheyder

SINGAPORE, Jan 19 (Reuters) – Voluntary carbon markets are set to become at least five times bigger by 2030, transacting volumes comparable to annual emissions by the global aviation industry in 2019, energy major Shell (SHEL.L) said in a report on Thursday.

The voluntary carbon offset market, which was worth about $2 billion in 2021, will grow to $10-40 billion in value by 2030, transacting 0.5-1.5 billion tonnes of carbon dioxide equivalent, compared with 500 million tonnes currently, Shell said in the report co-authored by the Boston Consulting Group (BCG).

Despite bullish projections on the growth of the carbon markets, it might still be years before countries can offset their emissions in an international carbon market first called for in Article 6 of the 2015 Paris climate accord.

Key outstanding issues include the extent to which countries’ registries, or digital ledgers of carbon trades, might be exposed to outside scrutiny.

“(Market) Participants have limited clarity on the impact of Article 6 of the Paris Agreement and corresponding adjustments,” Shell said.

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Critics of carbon offset markets, including Greenpeace, say they allow emitters to continue to release greenhouse gases.

The carbon market projections in the report showed demand for credits accelerating and supply tightening, Shell said.

“Where previous projections had shown demand for credits starting to outstrip supply in 2024, data from 2021 shows this may happen even earlier for some classes of credits,” the company said in a statement.

Surveys in the report showed buyers were seeing spending on carbon credit purchases as necessary, Shell said, adding that reputable monitoring, reporting and verification were seen as the most important purchasing criteria.

“As the market continues to grow at an accelerated pace, it will become increasingly important to grow with integrity through a high-grading of credit quality,” Shell quoted BCG’s Managing Director Anders Porsborg-Smith as saying.