Carbon Market Analysis

The client asked for a detailed understanding of the carbon credit business and a project assessment of different forestry projects considering the company’s sustainability strategy and needs. We analyzed different compliance and voluntary carbon markets including carbon credit market mechanisms, influencing factors and implications for future development of the markets. A due diligence of the carbon project's suitability was performed and amounts of available carbon credits calculated.
German company operating in the automobile manufacturing industry

2 min read

Holger Weuste, Alexander Gehring i.a.

Challenge

The client plans to compensate greenhouse gas emissions to reach ‘carbon neutrality’ of products and services, and advance towards its group-wide decarbonization endeavors for meeting the Paris Agreement climate goals.

Approach

The project was clustered in three chapters. First, an analysis of carbon markets (including compliance and voluntary markets) as well as an overview on available certification standards, project types, cost factors, certification steps and requirements. Secondly, influencing factors such as availability of credits (including political and location constraints), demand of credits (reputation, demand in compliance markets) and regulatory constraints (i.a. Transition Kyoto to Paris Agreement, COVID-19) were identified. Lastly, due diligence of different forestry projects played a key role in this project. Especially the focus areas Brazil, Peru, Colombia, Malaysia, Indonesia and Forestry Projects including REDD and afforestation/reforestation have been examined and considered with regards to their offset values.

Solution

Results included a carbon market overview, the assessment of carbon credit assets as well as projects with respect to identified influencing factors. 

Impact

Detailed understanding of carbon credit markets, their mechanisms and possible risks and opportunities for positive impact through carbon markets.

Contact

Sascha Mauries

Leadership Team Deloitte Sustainability & Climate GmbH
Director Consulting

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