Global carbon market to reach record volumes by 2017

The value of the global carbon market grew by 15 percent during 2014 to €45 billion. Higher prices in the European emissions trading scheme (EU ETS) and steady liquidity and prices in the North American markets were the main reasons for the increasing value of carbon markets.

In 2015, the world’s carbon market will grow by 10 percent to 8.5 Gt while its value will increase by half to €69.5 billion.. This forecast is based on a higher turnover of EUAs* on the secondary market and a virtual doubling of the volume of North America’s Western Climate Initiative (WCI) to 610 Mt in 2015 following the expansion of the cap to include transportation fuels and natural gas.


By 2017 it is expected a gradual but steady increase in the global carbon market volume to 11.5 Gt, surpassing the 2012 record volume of 10.8 Gt.


All eyes will be on Asia this year. China’s seven pilot schemes captured the attention of the world this year, showing a sixfold growth in market volume to 23 million tonnes (Mt) and with value quadrupling to €123 Mt. The volume from China’s seven markets will continue to grow, potentially doubling in 2015 to 40 Mt and with an expected value of €146 million. The seven provincial emissions trading schemes in China show much promise, with volume of about 24 Mt in 2014 to skyrocket to 75 Mt in 2017.


South Korea also launched its emissions trading scheme on 1 January 2015, which is set to become the fourth largest carbon market.


In relation to Europe, The European carbon market bucked historical trends in 2014 as the EUA* price increased for the first time since 2010 with the December 2014 delivery contract breaking through €7.4/t, following the long-awaited adoption of the backloading measure.


In relation to America, North America’s WCI and the Regional Greenhouse Gas Initiative (RGGI) gained a ranking in the global market hierarchy, taking second and third place respectively. The two American markets combined were at 457 Mt, contributing €3.2 billion by value.


In 2015 it is expected the North America market volume to grow by two thirds to 778 Mt, virtually doubling in value to €6.4 billion to represent 10 percent of global carbon market value.