Global energy and commodity price reporting agency Argus has launched a new suite of price assessments for the nature-based removals segment of the global voluntary carbon market (VCM), increasing price transparency at a time when demand and liquidity are growing.
Argus publishes prices for three distinct project types: Improved Forest Management (IFM); Afforestation, Reforestation and Revegetation (ARR) and Blue Carbon, each with detailed breakdowns by geography and vintage.
The majority of the VCM volume traded in the market today comprises credits issued by projects engaged in emissions avoidance, as reflected in Argus’ existing reporting on project types such as Avoided Deforestation, Clean Cookstoves and Renewable Energy. But recent market developments have created a need for insight on increasingly liquid nature-based emission removal projects.
Argus’ reporting on the VCM is focused on addressing the need for detailed and specific price assessments, aiming to avoid the market standardisation produced by broad baskets of non-fungible and diverse project types, conflating key value parameters such as geography or vintage, and over-reliance on automation and exchange-traded data. Argus’ assessment approach involves price reporters sense-checking and corroborating bids, offers and transactions, in order to provide granularity, reliability and transparency.
As such, Argus’ carbon credit prices are stratified by project type, vintage and geography to produce assessments more closely aligned with market liquidity. By focusing on the core, most frequently-traded credits, Argus maintains the flexibility to adapt when new areas of liquidity start to develop.
Argus Media chairman and chief executive Adrian Binks said: “After extensive engagement with market participants, we are pleased to bring greater transparency to the global voluntary carbon market with an important expansion of our price reporting and insight, which will play a crucial role in the market’s attempt to achieve scale. Our new nature-based removal prices are underpinned by our robust and transparent assessment methodology and reflect input from physical buyers and sellers from the voluntary carbon market.”
Argus’ new nature-based removal prices will comprise weekly outright price assessments for ARR (Colombia, China and Uruguay), IFM (US and China) and Blue Carbon (Delta Blue Carbon, Pakistan) and will cover vintages relating to each of the six years before the date of assessment and reflecting current market liquidity. Argus’ assessments are based on transactions, bids and offers in the spot market to ensure that they are accurate and robust representations of fair market value.
Argus already publishes prices for Reducing Emissions from Deforestation and Forest Degradation (REDD)+ (Latin America, southeast Asia and sub-Saharan Africa); Clean Cookstoves (Africa, Asia and Latin America), Renewable Energy (China, India, Turkey and Brazil – each split by wind, solar and hydro) and Project Specific Prices (Envira, Kariba, Rimba Raya, Katingan and Southern Cardamom).
