The carbon credit market - Italy (2024)

1.2 The global market

In ****, the global carbon credit market is estimated at $***.** billion. In the near future, sustained growth is expected estimated at a compound annual growth rate (***) of **.* percent for the period ****-****. By ****, the global carbon credit market could reach a total value of $***.** billion.

Carbon credit market World, ****-****, in billions of dollars GlobalMarketInishts

As for the voluntary carbon credit market (***) of **.*% is projected for the period ****-****, under which the voluntary carbon credit market could eventually reach a total value of $*.** billion. Voluntary carbon credit market (***) World, ****-****, in billions of dollars MarketReportsWorld Regarding the market volume in terms of the number of credits traded, between **** and **** there is an increase of **.*%. However, while between **** and **** there is a contraction of **.* percent, between **** and **** the growth in trading volume has increased by ***.* percent, from ** million credits to *** million credits. Finally, between **** and **** there is a contraction of **.*%, with the total volume standing at *** million credits. Carbon credit market volume World, ****-****, in millions of units EMReports In ****, carbon credits generated by projects related to reforestation and silviculture more generally gather **.* percent of the total market value. This is followed by projects related to renewable forms of energy and in the ...

1.3 The Italian market

as for the proceeds from the auction placement of EUAs in Italy, there is a sustained growth between **** and ****. During the period analyzed, total proceeds increased from €*.** billion to €*.** billion, representing an increase of ***.* percent. Data for the first * months of **** show a total value of *.** billion euros, suggesting further growth for this year compared to ****. As will also be seen in Sections *.* and *.*, the growth is mainly attributable to the increase in prices for individual allowances as the total number of allowances placed is steadily decreasing (***).

Proceeds from the auctioning of EUAs Italy, ****-****, in billion euros *Data available through June **** GSE

Regarding environmental taxes, it is possible to analyze the revenue derived from companies active in the following sectors:

mining and quarrying manufacturing activities supply of electricity, gas, steam and air conditioning water supply sewerage networks waste treatment and remediation activities construction

Between **** and ****, there is a **.* percent decrease in revenue for pollution-related taxes of Italian companies active in these sectors. Specifically, the total value of revenue decreased from ***.* million euros to ***.* million euros during the period analyzed.

Revenue from environmental taxes paid to enterprises active in mining, manufacturing, electricity, gas, steam and air conditioning supply, water supply, sewerage, ...

2.1 Demand in Italy

Between **** and June ****, the total number of EUAs placed at auction in Italy decreased by **.* percent, from **.** million to **.** million. With the sole exception of **** (***) and to the gradual decline in the number of ETS Stationary Installations in Italy.

Amount of EUAs auctioned Italy, ****-****, in millions of units *Data available until June **** GSE

As stipulated in Annex I of Legislative Decree No. ** of June *, ****, all plants with an installed thermal capacity of more than ** MW fall under the ETS program. Between **** and ****, the total number of Stationary Plants in Italy decreased by **.* percent, from *** to ***. However, while between **** and **** the number of plants grew steadily (***)

ETS Stationary Plants Italy, ****-****, in numbers Isprambiente With regard to small and very small emitters, Italy has taken advantage of the possibility provided by Article ** of the ETS Directive (***), between **** and **** the number of registered businesses decreased by *.*%. Small and very small emitters registered in the National Register (***) Italy, ****-****, in number ETS.Minambiente The demand for carbon credits in the voluntary market appears to be uncorrelated because on the one hand these can also be purchased by activities not subject to European regulation and on the other hand there is no substitution mechanism ...

2.2 Demand drivers

with regard to the volume of atmospheric CO* emissions attributable to Italian economic activities, there is a clear decline between **** and ****. In particular, analyzing the emissions attributable to enterprises active in the following economic sectors:

mining and quarrying manufacturing activities supply of electricity, gas, steam and air conditioning water supply sewerage waste treatment and remediation activities construction

between **** and ****, the volume of CO* emissions decreased by **.* percent, from ***.* million tons to ***.* million tons. The trend outlined in the medium to long term is consistently downward, except for a few individual positive changes attributable to the recovery of economic activities following periods of recession.

Atmospheric CO* emissions from mining, manufacturing, electricity, gas, steam and air conditioning supply, water supply, sewerage, waste treatment and remediation activities, construction Italy, ****-****, in millions of tons Istat

2.3 Geographical distribution of demand

In order to visualize the geographic distribution of demand, two maps were created with the geographic distribution of ETS Stationary Plants and plants of small and very small emitters.

Regarding the first point, stationary plants subject to the ETS are listed in Annex I of Legislative Decree **/**** and include all plants with an installed thermal capacity greater than ** MW. In ****, **.* percent of the total installations included in Annex I are located in the Northeast of the peninsula while **.* percent in the Northwest. This is followed by the Center and the South with shares of **.*% and **.*%, respectively. Finally, the Islands have *.*% of the total Stationary ETS installations.

Installations of small and very small emitters are mainly located in the Northeast (***) of the country, due mainly to the high concentration recorded in Emilia-Romagna. This is followed by the Northwest and the Center with shares of **.*% and **.*%. In the South, **.* percent of the total is concentrated while in the Islands the share drops to *.* percent.

3.1 The market structure

regarding the structure of the carbon credit market, globally between **** and ****, mechanisms for generating and selling carbon credits increased. During the period analyzed, the total number of mechanisms implemented increased from ** to **, marking a **.* percent increase in just eight years. Most existing mechanisms are located in the Asia Pacific and North America.

Mechanisms implemented for the comparative trading of carbon credits World, ****-****, in numbers WorldBank

As for projects certified to emit carbon credits, between **** and **** these are increasing sharply. Specifically, when analyzing the projects certified by the * major certifying bodies globally (***), there is a growth of ***.*% between **** and ****, with the total number of projects increasing from **** to *****.

Evolution of the number of projects certified to emit carbon credits (***) World, ****-****, in number VCS;ACR:CDM;GS;CAR

3.2 The actors

Credit Carbon Developers

Anew: is a leading climate services company specializing in the reduction and removal of industrial emissions through environmental commodities and carbon markets. Their industry expertise, combined with a diversified portfolio, enables them to maximize the value and climate impact of their clients' environmental initiatives. Anew manages projects in a variety of areas, including carbon capture and storage, waste decarbonization, renewable energy solutions, and the use of biochar to permanently sequester carbon. The company offers a wide range of carbon credits and other environmental products, such as RINS & LCFS Credits, RECs & I-RECs, and plastic credits, showing its commitment to innovative solutions to address climate change. Anew Climate works with landfill operators, carbon capture and storage participants, biochar producers, renewable and conventional energy providers, promoting climate impact across diverse industries. With more than *** projects under management, contributing to ** percent of carbon credits issued in the United States, Anew Climate stands as a benchmark in the industry, working toward measurable and meaningful climate impact through climate-conscious operations and asset management.

South Pole: founded in **** in Zurich, Switzerland, has established itself as a global leader in sustainability and climate solutions. This Swiss company is actively engaged in combating climate change through a ...

3.3 The Exchanges

A list of leading voluntary carbon credit exchanges is offered below:

Air Carbon Exchange (***): positions itself as a global leader in environmental market innovation, transforming the approach to carbon credits with advanced technologies, such as blockchain, to ensure efficient and secure exchanges. Since its founding in **** by Enterprise Singapore, ACX has significantly expanded its offerings, becoming the first regulated carbon exchange and clearing house globally, promoting the integrity and transparency of carbon credit markets.

Carbon Trade Exchange (***) and water. CTX operates globally in the voluntary carbon sectors and is known for its interfaces with multiple environmental commodity registries, as well as having electronic links with financial intermediaries to ensure efficient exchanges.

Toucan Protocol: is a smart contract-based infrastructure that enables deeply liquid carbon markets. Pioneering the use of carbon as collateral with the launch of BCT in partnership with Klima DAO, Toucan uses non-fungible and fungible tokens to link legacy carbon credits from Verra to DeFi. The protocol aims to facilitate climate action through tokenized carbon markets, offering environmental credits to offset emissions that otherwise could not be reduced.

Xpansiv: is a market infrastructure for global environmental commodities, connecting buyers and sellers to facilitate safe and transparent trading of products in ...

3.4 The value chain

Regulated Market

Voluntary Market

4.1 Type of the offer

The EU ETS (***) and the voluntary carbon credit market are two key mechanisms to address greenhouse gas emissions and stimulate climate action:

THE EU ETS is an emissions trading system established by the European Union in ****. It works on a "cap and trade" principle, where a cap is placed on the total GHG emissions that companies can produce. Companies receive or purchase European Union Allowances (***), with one allowance allowing the emission of one ton of CO* equivalent. If a company emits less than its limit, it can sell the excess allowances; if it emits more, it must buy additional allowances. The goal is to reduce overall emissions in a cost-effective way by stimulating companies to innovate and reduce their carbon footprint Carbon credits in the voluntary marketare a market mechanism that allows companies and individuals to voluntarily offset their carbon emissions by purchasing credits generated by projects that reduce, avoid or remove greenhouse gas emissions from the atmosphere. These projects can range from reforestation and forest conservation to renewable energy production. Voluntary carbon credits are certified according to international standards to ensure that emission reductions are real and verifiable. They serve to demonstrate a commitment to sustainability and to go beyond ...

4.2 The prices

between **** and **** the average auction price for EUAs increased from $*.** per share to $**.** per share, marking an increase of ****.*%. While between **** and **** the average price falls by **.*%, between **** and **** this grows by ****.*%. The growth is mainly concentrated in the period after ****, when with the resumption of economic activities following the pandemic outbreak, the demand for allowances increased sharply against a gradual decrease in the volume of supply.

Average annual prices for ETSs European Union, ****-****, in dollars WorldBank

As for carbon credits in the voluntary market, between **** and **** the average price increased from $*.** to $*.**, representing a growth of ***.* percent. Again, the growth is concentrated in the post-pandemic period: between **** and ****, the average price per carbon credit grew by ***.* percent. However, between **** and **** there is a negative change in the average price of *.*%.

Average price for voluntary carbon credits (***) World, ****-****, in dollars/tCO* Ecosystemarketplace In ****, carbon credits from reforestation and forestry-related projects record the highest selling prices, averaging $**.** per unit. This is followed by credits from projects related to waste management and the tech world with values of $*.** and $*.**, respectively. Credits issued from activities concerning renewable forms of energy and energy efficiency record the lowest prices, averaging $*.** and $*.**.

Price of voluntary ...

5.1 The legislation

The main legislative aspects with reference to the carbon credit market in Italy are proposed below:

International Treaties

The Framework Convention on Climate Change (***) are: protection of the climate system, and thus combating climate change and its adverse effects; awareness of the special needs and conditions of developing countries, which are particularly vulnerable to climate change; the fact that the lack of full scientific certainty is not a reason to postpone prevention and mitigation measures.

Article *, on the other hand, lists the obligations arising from accession to the Framework Convention on Climate Change for different countries, such as the implementation of mitigation measures and measures that can facilitate adaptation to climate change, through the adoption of national policies, and the obligation of sustainable management of sinks and reservoirs (***).the Framework Convention on Climate Change was ratified in Italy in **** by Law No. ** of **/**/****.

The Kyoto Protocol is the first international agreement containing commitments by industrialized countries to reduce emissions of certain greenhouse gases responsible for global warming. it was adopted in Kyoto, Japan, on December **, ****, and entered into force on February **, ****.The Kyoto Protocol concerns emissions of six greenhouse gases: carbon dioxide (***); methane (***); nitrous oxide (***); hydrofluorocarbons (***); perfluorocarbons (***); sulfur hexafluoride (***). The main ...