Who’s buying credits? The potential market for carbon credits is huge. Under the Kyoto Protocol, not just companies but governments are forced to offset their emissions. Even outside of the agreement, many companies are buying up credits to help their corporate image and to encourage their customers to go green.
British Airways have offered their customers the ability to purchase credits for a number of years to offset their flight. The Westin resort and Spa group offer their customers carbon credits to offset their stay, and have reduced 800 tonnes of CO2 to date. The Swedish energy group Vattenfall is the largest single buyer of credits in Europe, followed by a Polish energy group. Overall, European groups are spending £800 million on carbon credits.
Last year, Spain announced that in order to fulfil the Kyoto Protocol, it would be purchasing 6 million tonnes of carbon credits, and is calculating that it will need to spend
The prices of the credits themselves vary and can be volatile, creating the potential for large gains as demand grows.
As of the 30th September 2010, CER spot prices were €1.2 billion overall to comply. Most countries are spending similar amounts or more. And in the voluntary and over the counter (OTC) markets 94 million tonnes of CO2 were traded last year, with market participants predicting that over 1 billion tonnes per annum will be traded by 2020. €13.56 and EUA spot prices €15.60 as traded through the exchanges. Running alongside this are the OTC markets, where one of the largest companies charge £15.49 per credit, ranging to £10.90 for each credit from another supplier. British Airways charge approximately £11.70 for each tonne offset on one of their flights.
