REDD+ retirements slow, Katingan demand buoys project price

The number of retirements of Reducing Emissions from Deforestation and Forest Degradation (REDD+) carbon credits dropped in the week to Wednesday February 19 to 488,896 tonnes of CO2 equivalent (tCO2e), from 885,508 tCO2e a week earlier, according to data from the Verra Registry

In Southeast Asia, 75,952 tCO2e of Katingan (VCS 1477) vintage 2015-16 credits were retired on February 13 by Norwegian energy company Equinor, to offset emissions from its employees’ business flights in 2024.

The company previously retired credits across Indonesian REDD+ projects, including 32,082 tCO2e of vintage 2020 Katingan credits and 37,331 tCO2 of Rimba Raya (VCS 674) vintage 2018 credits in March 2024.

Katingan remains one of the more widely traded projects within the secondary market. Credits from the project have shown steady price increases this month on firm demand and dwindling supply.

A 50,000 tCO2e trade of vintage 2019 credits was reported at $5.07 per tCO2e this week, with subsequent offers at $5.55 per tCO2e. Vintage 2020 credits from the project were offered at $5.75-5.80 per tCO2e this week, up from $5.25 per tCO2e a week earlier, buoyed by demand for the earlier vintage credits. Vintage 2020 credits had been reported to be bid/offered at $4.50-5.00 per tCO2e at the start of the month.

Over the same period, offers of earlier vintage 2017 credits changed little, hovering around $3.75 per tCO2e with spot demand mainly focusing on newer vintage credits.

Katingan supply was also constrained, with the project last issuing new credits in 2022. Subsequent issuances have been delayed following the Indonesian government’s moratorium on carbon credit issuances. This has led to a steady decline in circulating volumes with credits retired but no new ones entering the market.

Across all vintages, just under 14% of issued supply remains unretired, leaving around 5.35 million tCO2e. The earlier vintage credits from the project generally have tighter supply, with less than 2% of vintage 2010-15 credits circulating, while buyers have worked through the cheaper credits from the project.

This pushes interest into the newer vintage credits, further supporting the price. Just under 8% of vintage 2018 credits remain, while just under 23% of vintage 2019 credits are in circulation. Vintage 2020 credits currently have around 33%, 1.9 million tCO2e, of issued credits unretired.

Vintage credits from Keo Seima are retired by undisclosed companies

Elsewhere, a total of 112,761 tCO2e of vintage 2020 credits from Keo Seima (VCS 1650) were retired by undisclosed companies. Another undisclosed company retired 250,000 tCO2e vintage 2017 credits from the project.

In the spot market, offers of vintage 2016 credits from Southern Cardamom (VCS 1748) were reported at $0.30 per tCO2e. Vintage 2016-17 credits from the project had been offered as low as $0.20 per tCO2e a week earlier.

Meanwhile, in Latin America 11,000 tCO2e vintage 2019 credits were retired from the Envira Amazonia Project in Brazil on February 13, by electricity supplier, Redeia.

Bids for vintage 2017 credits from the project were reported this week at $1.25 per tCO2e, steady from the start of the month.

A forward offer of vintage 2021-23 credits from the Tapera Amazonas REDD+ (VCS 4956) project in Brazil was reported at $7.50 per tCO2e for as much as 3 million tCO2e. The project was currently under validation and has yet to issue any credits.

Another offer of more than 350,000 tCO2e of credits from an Argentina REDD+ project (VCS 3739) was reported at $11 per tCO2e for vintage 2021-22. The project was registered but has yet to issue credits.

On the supply side, the Manoa REDD+ project (VCS 1571) in Brazil issued a total of 28,129 tCO2e of new credits across vintages 2013-21.

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