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The new weekly assessments, the first of their kind by a Price Reporting Agency (PRA), combine BeZero’s trusted carbon credit ratings with project-type specifications to bring greater transparency and clarity to the carbon markets.
Covering Reducing Emissions from Deforestation and Forest Degradation (REDD+), Afforestation, Reforestation and Revegetation (ARR), and Improved Forest Management (IFM) project types, these assessments will provide valuable insights into how ratings impact carbon credit pricing.
Launched on July 2, they are available as part of the Fastmarkets Carbon package and within our weekly Carbon Newsletter that is currently published for free midweek. These assessments offer a new level of precision and reliability for both buyers and sellers navigating the evolving carbon market.
We have launched a suite of 12 project-type and BeZero-rated weekly assessments. BeZero is a carbon ratings agency that assigns a rating on an 8-point scale between AAA and D to the likelihood that a given credit achieves a tonne of CO2e avoided or removed. These assessments will price carbon credits that are rated at a certain level by BeZero.
The current assessments cover the ratings bands and project types with enough projects, data points and liquidity.
List of assessments:
REDD+ BeZero AA, $/tCO2eREDD+ BeZero BBB, $/tCO2eREDD+ BeZero BB, $/tCO2eREDD+ BeZero B, $/tCO2eREDD+ BeZero C, $/tCO2eARR BeZero BBB, $/tCO2eARR BeZero BB, $/tCO2eARR BeZero B, $/tCO2eARR BeZero C, $/tCO2eIFM BeZero A, $/tCO2eIFM BeZero BB, $/tCO2eIFM BeZero B, $/tCO2e
The assessments have been designed to remove as much noise as possible, since other aspects such as vintage, volume and registry can also impact price, leaving the ratings as the main differentiator. The current specifications limit eligible credits to a minimum of vintage 2020, issued under VCS, GS, ACR or CAR and with a volume of between 5,000-50,000 tCO2e.
By using both ratings and project type to form the specification we are looking to distil the price difference higher or lower ratings bring to the carbon market while removing noise from other aspects such as project type and vintage.
Buyers have become increasingly discerning in what credits they source following integrity concerns raised over recent years, with one aspect of this being to increasingly look towards project ratings. But so far there has been little in terms of robust reference or benchmark pricing to ascertain what price level they should be paying for higher quality.
On the seller side, many continually point to their projects being higher quality as a reason they should achieve higher prices without a reference for what premium is “reasonable”.
These assessments will highlight that premium within certain project types, bringing greater clarity to project developers, traders, banks and end users what that fair premium is.
We have previously seen price impact when projects have been rerated. Katingan (VCS 1477) was rerated higher to AA from A by BeZero in the first quarter of the year. Since then, we have seen prices of vintage 2020 credits from the project rise from $4.50-5.00 per tCO2e at the start of the year to $7.40-8.00 per tCO2e in recent weeks. These assessments aim to capture and reflect these changes in the market and highlight the impact ratings have.
These assessments launched on July 2 and join our current list of 22 carbon prices as part of our Fastmarkets Carbon package as well as in our weekly Carbon Newsletter.
Fastmarkets delivers trusted insights and pricing across carbon credits, carbon removals, and compliance carbon markets. Our expert team brings decades of experience helping investors, corporates, project developers, and governments navigate risk, seize market opportunities, and understand the impacts of the rapidly evolving carbon market landscape. Discover more now.