On the CBL market, a credit that a year ago sold for barely $US1 per tonne now fetches $US7.80. CBL’s specifically forestry-based credits jumped from $US4 to almost $US15, outpacing the price gain of almost any other commodity.

The big players can help with price discovery, reduce the need for in-house expertise, and cut transaction costs. Ben Stuart, Sydney-based co-founder of CBL, says his operation already allows the banks to get involved in trading, using standardised contracts that his company Xpansiv has created in the past year. “We’re onboarding more customers in a month now than we were in 2018 in a year,” he says. His clients include banks, hedge funds, trading houses and big companies.

The volume of carbon offsets traded on Xpansiv’s CBL platform nearly tripled in 2021 to outpace the voluntary market’s rapid fundamental growth amid a surge in interest in standardised trade. Total carbon offset volume transacted on CBL exceeded 121.5 MtCO2e last year, up 288% on 2020 levels, with more than 150 active market participants – a 131% year-on-year increase.

CBL’s rate growth outpaced the voluntary carbon market’s fundamental growth, with offset issuances across the four main carbon credit registries rising 65.5% to 365.8 mln offsets in 2021 and retirements up nearly 71% to 161.3 mln.… Based on Ecosystem Marketplace’s survey data that the voluntary carbon market grew to more than $1 bln in value in 2021, up from $300 mln in 2020, CBL said this indicated its market share had rise to 36% from 17% based on volume, and to more than 41% based on notional value.

The volume of carbon offsets traded through Xpansiv CBL Markets grew 288% in 2021 to reach a record 121.5 tonnes CO2e… making it the leading platform for voluntary credits. There were 150 market participants, ranging from corporate sustainability managers, project developers, trading firms, banks and brokers, an increase of 131% on the year.

CBL achieved 36% market share based on volume and 41% based on notional value. The exchange also said its Global Emissions Offset (GEO) and Nature-based Global Emissions Offset (N-GEO) spot contracts, “the first benchmark instruments for the voluntary carbon market”, saw 16 million tonnes of trade during the year, or 7.6% of all volumes.

The C-GEO-2, Xpansiv market CBL’s new spot contract, allows clients to trade carbon offsets that cover energy, renewables and other technology-based offset credits. The C-GEO-2 aims to standardise the market for offsets issued between 2016–2020, with plans to roll this forward from 2020 to 2026. In its first week of trade, prices ranged from $6.80 to $7.00.

Transactions on the C-GEO-2 have totalled 155,707 metric tonnes of carbon dioxide equivalent (mtCO2e), with 117,207 mtCO2e of traded on its launch day in 21 transactions. The C-GEO-1 contract, which deals in offsets dated 2012–2015, saw volumes of 10,000 tonnes priced at $6.30.

“Now we have the N-GEO for nature-based [offsets] and the C-GEO for tech-based [offsets]…we can look at specific, smaller groups that can be anchored in these benchmarks, for instance a new technology that hasn’t got off the ground yet…We can look at removals, regional-specific, or project-specific offsets — just a really broad range as long as we anchor them against the benchmarks.”

New York-based exchange platform Xpansiv said its two new contracts — C-GEO-1 and C-GEO-2 — were traded by 13 companies on Jan. 5, their first day of trading. The companies included Chevron USA Inc., Carbon Growth Partners, EKI Energy Services Ltd., Fathom Energy LLC, Mercuria Energy America, LLC, Radicle Group Inc and Viridios Capital. According to Xpansiv, the C-GEO-2 contract traded a total of 117,207 credits in 21 transactions. Traded prices ranged from $6.80-$7.00/mt. The C-GEO-1 contract saw 10,000 mt traded at $6.30.

“The GEO, NGEO and the C-GEO contracts will be benchmark contracts,” said Russell Karas, Head of Carbon Market Development at CBL. “Similar to the way the GEO and N-GEO provide a price everyone can see, the C-GEO contracts will add transparency.”

A [trader] source said he had not begun trading yet but was tracking volumes and prices. “I think we will start seeing this as a benchmark for pricing and hopefully more liquidity.”

To meet the soaring demand for voluntary carbon credits, Xpansiv’s CBL Markets launched new emissions trading contracts, doubling its market reach as the VCM expanded this year. CBL Head of Global Carbon Rene Velasquez said that it was a significant year for the global exchange platform with the launch of two new spot contracts—CBL GEO for CORSIA-eligible offsets and CBL N-GEO for Verra-issued forestry credits with a CCB certification.

“We see 2021 as an inflection point for the voluntary carbon market,” Velasquez said in an email. “More than $1 billion of credits were traded, which is a three-fold rise over 2020 and an important milestone to establish market credibility.”

Now, with some of the necessary trading infrastructure in place, Velasquez expects the VCM to scale up further in 2022.