Carbon volumes reach new high

London, 10 August: The global carbon market saw record high volumes traded in the first half of 2006 according to Point Carbon, Oslo-based carbon analysts.

In total, the equivalent of 684 million tonnes (Mt) of carbon dioxide (CO2e) was transacted globally during the first six months of this year, more than five times the volume traded during the same period last year, and 85% of the total volume traded in 2005 as a whole.

Worth an estimated €12 billion ($15 billion), the financial value of carbon trades in the first half of 2006 exceeded the entire value traded in 2005.

The EU Emissions Trading Scheme (EU ETS) remains the dominant carbon market segment, with 440Mt traded during the first half of 2006; close to 65% of the total traded volume worldwide. However, at just €9.9 billion, the financial value of the EU ETS over this period was considerably lower than expectations, due to the dramatic collapse in EU allowance (EUA) prices at the end of April.

Kyoto's flexible mechanisms also saw considerable growth in volumes and values this year compared to 2005. In total, carbon credits from Clean Development Mechanism (CDM) and Joint Implementation (JI) projects equivalent to 226Mt of CO2e, worth €1,976 million, were traded during the first half of 2006. By the end of June 2006, CDM trades stood at 193Mt, worth €1,545 million, and secondary CDM trades had increased tenfold compared to 2005.

Point Carbon's figures show that other markets are also hotting up. The Chicago Climate Exchange and the New South Wales emissions trading scheme in Australia both show four times higher volumes and values than in 2005.

Taking all these markets and the EU scheme together, Point Carbon's global carbon market forecast for 2006 as a whole is for a total volume of 1,382Mt traded, worth almost €22 billion, considerably more than the 800Mt, or €9.4 billion, traded last year, although some 200Mt tonnes less than the company predicted at the start of the year.

Updated 10 August 2006