Nature Based prices fell sharply in 2022, but outlook remains positive

Benchmark nature-based carbon prices fell by the largest amount in years in December last year as traders rushed to exit positions before the end of the year amid lower demand, sovereign credit issuances and a disappointing outcome at COP27. The drop came after weeks of declining prices. Essentially the gains in the18 months before were wiped out.

Although prices have stabilized this year, there is still uncertainty in the market. Despite this setback, the long term outlook is still one of strong growth, A study conducted by EY indicated that, with rising demand and diminishing supply, credit prices within the VCM are expected to climb to 80-150 US dollar by 2035 in all scenario’s.