1

Key findings
• Overall the market doubled between 2007 and 2008
• “If you build it they will come”: expanding infrastructure,
standards maturing & increased attention in pre-compliance
context
• Headlines down (the good & the ugly) but credibility still a
focus
• CSR and PR remain core motivations, but intermediaries are
scaling up and the pre-compliance market is gaining
• Increasingly savvy buyers

2
 This year, a record 169 respondents from 28
countries responded to our survey

• Market-wide, comprehensive survey of the voluntary carbon

markets
• Survey itself purely focused on the over-the-counter (OTC)
market
• Survey covered all offset suppliers including developers,
aggregators/wholesalers, and retailers. We estimate that
more than 70% of identified suppliers participated
• Other than the direct respondents, further data was obtained
from brokers, registries, and exchanges.

3
 2009 Respondents: five countries host 70% of the organisations
70
61
60

50

40
Count

30
20 19
20
10
10 8
5 6 4 4
3 3 3 2 2 2 2 2
1 1 1 1 1 1 1 1 1 1 1 1 1
0
Mexico
France

Japan

South Africa
Germany

China

Czech Rep

Turkey
Brazil
USA
Australia

Portugal
Peru

S. Korea

Sweden
Uruguay
UK

Netherlands

Guernsey
Singapore

Madagascar
Denmark
Spain
Canada

Switzerland

India

Austria
Belgium
New Zealand

Colombia
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
4
Strong volume growth in the CCX contributes to a
near doubling of voluntary carbon markets
Voluntary Markets Volume
140
123Mt
0.2
120
87%
100
69 Other
MtCO2e

80 Exchanges
66Mt
0.1 CCX
60 164% 23
42Mt OTC
40
25Mt 54
20 42 10 43
10Mt 5Mt 11Mt 11Mt
2 1 15
10 5
0 8 9

Pre-2002 2002 2003 2004 2005 2006 2007 2008

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
5
However, the OTC market still makes up 56% of
the market’s value due to its price premium
Voluntary Markets Value Average price:
800 OTC = $7.34/t
$705M
700 1
CCX = $4.43/t

600
111%
307
500
MtCO2e

Other
Exchanges
400 CCX
$335M
1
300 72 OTC
238%
$171M
200 397

$99M 262
100 171
$43M $37M $42M 38
$23M
43 3 3 61
0 23 35 39
pre-2002 2002 2003 2004 2005 2006 2007 2008
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
6
The voluntary market has grown faster than the
compliance market, but is still marginal
Volume (MtCO2e) Value (US$ million)
Markets
2007 2008 2007 2008
Voluntary OTC 43.1 54.2 262.9 396.7
CCX 22.9 69.2 72.4 306.7
Other exchanges 0 0.2 0 1.3
Total Voluntary Markets 66.0 (2.2%) 123.4 (2.9%) 335.3 (0.5%) 704.8 (0.6%)
EU ETS 2,061.0 2,982.0 50,097.0 94,971.7
Primary CDM 551.0 400.3 7,426.0 6,118.2
Secondary CDM 240.0 622.4 5,451.0 15,584.5
Joint Implementation 41.0 8.0 499.0 2,339.8
Kyoto [AAU] 0.0 16.0 0.0 177.1
New South Wales 25.0 30.6 224.0 151.9
RGGI - 27.4 - 108.9
Alberta’s SGER(a) 1.5 3.3 13.7 31.3
Total Regulated Markets 2,919.5 4,090.0 63,710.7 119,483.4
Total Global Markets 2,985.5 4,213.4 64,046.0 120,189.0
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Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
The main goal is credit retirement though, which
has stayed level since 2007
Historic Transaction Values and Retirement
60
54
Churn rate
50
= 4.4 (or
43
42 2.9)
40
MtCO2e

Sold
30
Retired

20
15
12 12
10 9
10 8
7 5 7 5
4 3 4

0
Pre-2002 2002 2003 2004 2005 2006 2007 2008
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
8
Renewable energy was the major winner capturing
over half the volume, landfill gas second
Transaction Volume by Project Type

30
data labels = % of annual market share
51%
25

20
MtCO2e

15 2007

2008
10 17%
27%

18% 18%11%
5
7% 9% 5% 4%
4%
4% 3% 5% 1% 4% 2%0.6% 1% 2% 5%
0.3% 1% 0.3%
0
RECs

Efficiency

Emissions

Forestry and

Mixed / Not
Industrial Gas

Geological Seq.
Ag Methane

Renewable

Fuel Switching
Landfill

Coal Mine

Specified
Fugitive
Energy

Land Use
Energy

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
9
Renewable energy and methane dominant project types

Transaction Volume by Project Type

Not Specified 13%

2%
RE: Hydro
Other Types 3%
2% Landfill
32%
3%
Fugitive RE: Wind
Emissions 4%
2% Aff/Ref Conservation
Avoided
Deforest 1% Geological Seq
5%
Coal Mine
Energy efficiency
1%
Aff/Ref 7% RE: Biomass
Plantation 1%
Fuel Switching Ag Methane
1%
Forest
Management 1% Other
Ind. Gas 1%
17%
15%
Ag Soil 1%

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
10
 Asia and the US dominate supply
Transaction Volume by Location and Project Type
25
45%
data labels = % of annual volume Mixed/ Not Specified

20 Fugitive Emissions

Geological Seq.

28%
15 Fuel Switching
MtCO2e

Energy efficiency
39%

10 Industrial Gas

15%
23% Methane

5 Forestry/Land Use

8% 7% 4% 7% 4%
5% Renewable Energy
5% 4%
0.4% 2% 1% 2%
.0004% 1% .2%
0
2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008

EU Non-EU (incl Canada US AU/NZ Latin America Asia Middle East Africa (excl Mixed/Not
Russia) (incl Turkey) Egypt) Specified

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
11
 US$/tCO2e

-
5
10
15
20
25
30
35
40
45
50
Energy efficiency (30)

7.0
Fuel Switching (9)

5.7
4.6
Industrial Gas (2)

Ag Methane (22)

10.0
Landfill (40)

8.2
Coal Mine (4)

6.1
Fugitive Emissions (2)

5.9
Geological Seq (1)

2.6
RECs (2)

9.6
RE: Wind (64)
12.6
RE: Solar (6)
22.0

RE: Hydro (32) 5.2

RE: Biomass (29)

16.8

RE: Other (1)

18.0

Aff/Ref Plantation (32)

6.4

Aff/Ref Conservation
7.5

(17)

Forest Management (4)

7.7
Average Prices and Price Ranges by Project Type

Avoided Deforestation
6.3

(10)

Ag Soil (6)
3.4

Other Land based (1)

Other (11)
6.0 6.2

Not Specified (5)

7.7

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
Price
Price
Average
Volume-
Project type also has a clear price influence

Minimum
weighted

Maximum

Transaction
Transaction

12
 Similar to last year, 2007 vintage and beyond are
by far the most popular – 86% of the transactions
Vintage by Credit Transaction Volume
18

16 31%

14
data labels = % of market share

12
MtCO2e

10 2007

2008
8
30%
13%
12%
6
19% 10%
4
6% 14%
6% 5% 5% 11%
4% 4%
2 8%
5%
2% 0.6% 2%
1% 3% 2% 2% 2%
1% 0.1% 1% 1%
0
Pre- 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Post-2012 N/A,
Unknown
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance 13
Average prices increase along the value chain
although retail prices have declined from 2007
Average Prices by Supplier Business Activity
50
45
40
35
Average
US$/tCO2e

Transaction Price
30
Maximum
25 Transaction Price

20 Minimum
Transaction Price
15 48%
5.8% 11.1% 8.9
10
5.1 5.4 6.0
5
-
Developer Wholesaler Broker Retailer
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
14
Larger volume transactions were the largest share
with payment-on-delivery most common

Transaction Volume by Transaction Size Transaction Volume by Type of Contract

1% Payment-
1% 3% on-delivery
3% Very large 5% (POD), unit
9% 0.2%
contingent
Medium Payment-
on-delivery
(POD), f irm
Large 18% delivery
Spot
17%
46% transaction
Small
51%

Micro Pre-pay
(PP), unit
contingent
N/A, I don't
know Other
22%
Mixed
24%

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
15
Over 96% of transacted credits were third party
verified
Social Voluntary Carbon
Carbon 3% 9% Standard (VCS)
1%
ISO-
14064 Gold Standard (GS)
1% 3%

CDM/JI
3% Climate Action
2% Reserve (CAR)
4%
American Carbon
Registry (ACR)
VER+ 48%
2% Other
9%

Chicago Climate
Internal Exchange (CCX)
created
2% Greenhouse Friendly
10%
Climate Community &
Biodiversity (CCB)
12% Other

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
16
 Four Dominant Standards in 2008
Transaction Volume by Standard
30
data labels = % of annual market share
25 48%

20
2007
MtCO2e

15

2008
10
29%
12%
11% 9%
5 16%
9% 12%
9% 7% 2% 1% 4%
3% 6%3% 2% 3%3% 2%1% 3%
2% 1% 2% 0.2%3% 0.3%0.2%
0
Greenhouse

Carbon
ACR

Green-e
CCX

CCB

VOS
Standard

CDM/JI

don't know
VER+

Other
VCS

Climate
Internally
CAR

Social

ISO-14064

created

None/ I
Friendly
Gold

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
17
 Registries Increasingly Integrated
Transaction Volume by Registry
4
21% 25%
data labels = % of annual market share

3
18% 13%
2007

10%
2 14%
MtCO2e

13% 12%
9% 9% 2008
8%

5% 8%
1
5%
4% 3% 3% 2%
2%
2% 0.1% 1%
0
American Carbon

Exchange (CCX)

Greenhouse
Gold Standard (GS)

Clean Development

Other
Reserve (CAR)

BlueRegistry

Internal Registry
TZ1

DOE 1605 (b)

Chicago Climate

New South Wales

Bank of NY (BoNY)
Climate Action

Mechanism (CDM)
Registry (ACR)

Friendly
GGAS

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
18
 Prices (somewhat) consolidate around standards
Average Prices and Price Ranges by Standard
50

45
Volume-
40
weighted
35 Average

30
US$/tCO2e

25 Maximum
21.3 Transaction
20 18.4 Price
16.8
14.4
15
12.3 11.4
8.9 9.0 10.8
10 9.1 8.8 7.4 8.3 Minimum
5.6 5.8 Transaction
4.0 5.5
5 3.8 Price
-
ACR(11)

Gold Standard
CDM/JI (21)
CarbonFix (3)

ISO-14064 (15)
Green-e (3)

VCS (89)

VER+ (11)

Friendly (18)

None (8)
Plan Vivo (11)

Other (12)
Internally created

CAR (22)

CCX (26)

CCB (10)

Social Carbon (6)

Greenhouse

I don't know (5)

Average
(32)

OTC =
(25)

$7.34/t

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
19
 EU and the US creating 92% of demand
2% 0%
6% EU countries

US

Australia/ New
53% Zealand
39%

Canada

Other

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
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 Type of Buyer
1%1%1%1% Business for-profit (for resale)
2%

Business for-profit (for retirement,

without pre-compliance motive)

35% Not Applicable/ I don't know

29% Individuals (for retirement)

NGOs/ non-profit organisation (for

retirement)

Governments (for retirement)

Other

Business for-profit (for pre-

29% compliance)
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
21
However, sellers still thought that CSR and PR were
the main motivation for their buyers
Customer Motivation according to Sellers
5.0

4.5 4.4 4.3 4.4

4
4.0

3.5 2007
Importance Ranking

3.0 2.8
2.7 2.7
2.5 2.5 2.5
2.5 2.4 2008
2.2
2.0

1.5

1.0

0.5

0.0
Investment/ Anticipation of Corp. Resp. PR / branding Business Easier than Other
resale regulation model direct
reductions
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
22
 Voluntary carbon markets expected to reach 257
MtCO2e in 2012 and 476 MtCO2e in 2020
Projected Market Growth for the Voluntary Carbon Markets, according to Participants
500 2008 projection
450

400

350
Sales (MtCO2e)

Historic Growth
300

250
Projected Growth (by
2008 participants)
200

150
Projected Growth (by
2007 participants)
100

50

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
23
 VCS, CDM, GS, CAR and CCB are poised to win
the battle for consolidation
Future Standard Usage, According to Participants
120
data labels = % of respondents projecting to use the standard
52%
100
Number of companies

80
34%
32%
60
28% 27%

40
12% 11%
11% 11%
20 8% 8% 7% 6% 5% 5% 5% 4% 3% 3% 3% 3% 2% 1%
0

Greenhouse Friendly
CarbonFix
Other

Plan Vivo
VCS

VER+

JI
CDM

RGGI

I don't know yet

CCB

CCX

Internally created

EPA Climate Leaders

CAR

ACR
Gold Standard

Social Carbon

Green-e Climate
ISO-14064

TUV NORD

GE AES GGHS
Alberta
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance
24
 Number of companies

35

10
15
20
25
30
40
45

0
5
CAR

Gold Standard Registry

23% 23%
APX
21%
TZ1 21%

CDM

CCX

11%
I don't know yet

10%
CCB Database

Other 9% 9%

Internal registry
8%

BlueRegistry
7%

ACR

Bank of New York

6% 5%

NSW GHG

RGGI
5% 5%

Caisse des Depots

4%

GHG CleanProjects
19%Future Registry Usage, According to Participants

4%

Australia Climate
Exchange
Plan Vivo Projects Registar
3% 3%

Globe Carbon Registry

TUV NORD Registry

Triodos Climate Clearing
House
data labels = % of respondents projecting to use the registry

Not Applicable
Source: “State of the Voluntary Carbon Markets 2009”, Ecosystem Marketplace and New Carbon Finance

Regi
2% 2% 2% 2% 2%

None
2%

25
1%

Asia Carbon Registry

 Main takeaways
• The market is maturing rapidly with standard consolidation,
increased transparency and an expanding infrastructure
• As the increasing demand from Europe illustrates, voluntary
offsetting is very important for CSR/PR purposes and fills a
unique niche alongside compliance markets
• It is likely exist (and even over the next several years grow) in
the face of U.S. Regulation
• The voluntary carbon markets remain a source of innovation

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 Again thanks to our respondents and sponsors
Thomas Marcello Katherine Hamilton
New Carbon Finance Ecosystem Marketplace
Tom.marcello@newcarbonfinance.com khamilton@ecosystemmarketplace.com
+1 646 214 6168 +1 202 298 3007

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