Carbon buyers carry on despite political shifts

According to a report by the Patch carbon credit purchasing platform, more companies have retired carbon credits in the five months following the U.S. presidential election compared to the same period last year. This suggests that carbon credit buyers are actively pursuing their long-term climate goals, focusing on strategies that extend beyond a single presidential term. While the total number of active buyers has increased, the volume of carbon credit retirements has decreased compared to the end of 2023 through the first quarter of 2024. The shift in retirement volume may be attributed to recent guidance from standards setters rather than political changes, as indicated in the report.

Brennan Spellacy, CEO of Patch, emphasized the importance of carbon removal in achieving net zero, stating that companies are starting to build up their carbon removal inventory to meet their climate targets in 2030 and beyond. Companies like Autodesk, which has a 10-year decarbonization target, are incrementally increasing their carbon removal purchases in a realistic and pragmatic manner.

The voluntary carbon market serves as a leading indicator of corporate climate action, reflecting companies’ commitment to long-term climate goals that transcend political administrations. The Patch report highlights that companies actively engaging in carbon credit strategies are more likely to achieve credibility in their climate targets. Factors contributing to the recent decrease in credit retirements include a shift away from offsetting claims and increasing interest in carbon offtake agreements as companies prepare to meet their 2030 targets gradually.

Furthermore, there is a growing demand for carbon removal credits, with projects focused on removing carbon from the atmosphere being highly sought after. However, buyers are facing challenges in consistently obtaining enough carbon removal credits from specific project types. To ensure project quality, buyers are increasingly relying on third-party ratings when selecting carbon projects.

The rise in corporate funding of global climate action through carbon markets indicates a positive trend towards aligning corporate climate strategies with the goal of combating climate change. Companies are encouraged to continue investing in climate technologies to secure a sustainable future.