How much does the ton of carbon footprint cost? This is the emissions compensation market

The carbon footprint offset market is on the rise and has become the cornerstone of any sustainable enterprise.

Many companies enter the voluntary carbon market for the first time – or CO₂ footprint offset – without knowing who to bet on and how to buy this invisible asset that has become the cornerstone of any company that wants to be sustainable.

Some are required by law to do so. Others want, in a committed way, to be net zero by 2030. That is, achieving zero greenhouse gas emissions in less than a decade. Therefore, the new sustainable ecosystem places the increase in projects that offset the carbon footprint. But how do you know which ones to trust?

If you are going to compensate outside of Spain, it is important to bet on internationally recognized standards. Certified traders such as Allcot Group or Global Factor work to create programs that help companies in offsetting their CO₂ footprint.

This, as explained by Natalia Rodrigo Vega, Director of Business Development at Allcot Group, is done through actions such as “the reforestation and preservation of the Amazon in Colombia, reforestation of mangroves in Mexico, or creation of wind farms in Chile”.

He adds: “All projects are certified to the highest standards for granting credit integrity, with rigorous systems of internal, external audits and evaluation of the registry itself.”

Precisely, the concept of credit integrity has been the predominant ingredient of the last United Nations climate summit, or COP26. The footprint compensation market has sometimes incurred – and continues to do so – double counting. That is, if the country where the emissions offset project is carried out already reduces that CO₂, those credits cannot be sold.

Therefore, as Claimed by Kepa Solaun, partner and CEO of Global Factor, “it is important to bet on internationally recognized standards that ensure that the project has an independent verification, tracing the emission reductions through a registry and making sure that there is no double accounting”.

Two different prices

There are two ways to access these carbon markets and two prices at which to buy the credits – one credit would be equivalent to a ton of CO₂ – to offset emissions. One fluctuates like a stock exchange. The other is free.

Companies obliged by law to decarbonize – mainly carbon-intensive companies such as steel, cement or ceramics – buy CO₂ credits in a market intervened by the European Commission at prices marked so that the supply and demand for the price is reasonable. Currently, the average price for a ton of CO₂, that is, a credit, is 80 euros.

“The rest of the companies buy in a voluntary market where there is no single price because we are not obligated, and the price of the credit varies depending on the type of footprint and the impact of the project,” explains Valentín Alfaya, Ferrovial’s Director of Sustainability and president of the Spanish Green Growth Group (GECV).

The selling values of a ton of CO₂ on the free market range from $3 to $15 – or between €2.85 and €14.24.

Of course, the best valued projects in both cases would be those dedicated to the conservation of degraded areas with great impact on vulnerable communities or women’s empowerment, the best valued.

What type of project to choose?

Alfaya values “prioritizing projects by climate strategy oriented to values that remove CO₂ from the atmosphere and not only that make a positive impact”. And ferrovial leads by example, betting on reforestation and the conservation of natural ecosystems of proximity.

From this company they bet on their own projects such as Torremocha del Jarama, a very depressed area that, in addition to serving as a SINK for CO₂, generates employment.

The projects carried out in Spain are registered by the Ministry for the Ecological Transition and Demographic Challenge, and are certified by the Spanish Office of Climate Change. But there are already autonomous communities that are also developing their own.

Sometimes we come across eco-posture that understands sustainability as a message of new materials or small departmental actions that do not address together and in depth.

Therefore, the ecological footprint must be treated globally throughout the company’s value chain and the first step to compensate for it is to calculate it. Both in the organization and the products that are marketed.

“If we talk about products, we need to analyze their life cycle. If we refer to the organization, we have to analyze the sum of the carbon footprint of all its activity, whether products or services, “says Albert Hereu, director of the Catalan Cork Institute Foundation and spokesman for the InterCork initiative.

Once the environmental impact of the business activity is known, it is time to reduce it. And the next step is to make up for it. And here, order is important: compensating is not an end in itself, but the instrument for companies to move forward on decarbonization.

Source: The Spanish