HomeCarbon CreditsIncreased Demand for Carbon Offsets in Asia

Increased Demand for Carbon Offsets in Asia

Demand for carbon offsets in Asia is increasing across the global supply chain, IT, and banking industries.

Many companies want to lower their carbon footprint, especially after COP26. One way they are doing this is through the use of carbon offsets.

Carbon offsets are when a company offsets its carbon emissions by buying carbon credits. One metric ton of carbon is offset by an environmental project for every carbon credit bought.

Simply put, one carbon credit equals one metric ton of carbon.

With no global standard, offsets were often criticized. But that has now changed.

At COP26, leaders agreed to:

  • Set a global standard to create, account for, and verify carbon credits. This will help prevent double counting. It will also improve the quality of offset projects.
  • Allow certified emissions reductions (CERs) to be traded through Internationally Transferred Mitigation outcomes (ITMOs).
  • Provide countries with the choice to use or sell offsets to other countries.

With these changes, companies see the potential of the carbon offset industry, causing it to boom. But that isn’t all. Demand for Renewable Energy Certificates (RECs) is increasing as well.

RECs are just like carbon credits – except their focus is on renewable energy. One REC equals one megawatt-hour (MWh) of renewable electricity with RECs.

Singapore-based T-REC.ai is one of eight companies approved by the US to register and verify RECs.  Demand has reached 20 million RECs – accounting for half of the city-state’s power consumption.

However, demand was so high, they could only fulfill orders for 500,000 certificates.

Kang Jen Wee, founder and CEO of the exchange told Reuters that the company was working to register more renewable power suppliers.

Global companies want their suppliers across Asia to purchase RECs to offset emissions. Right now, the price ranges from $3 – $30 per REC.

Kang believes the exchange will grow by 10 million RECs next year. He expects it to reach 100 million by 2025.

Most Popular

Humanity is on Thin Ice Says UN Climate Report

The UN Intergovernmental Panel on Climate Change (IPCC) released its 6th Assessment Report with a key message that the planet is running out of...

Will Big Oil Be Forced to Pay for Climate Damages

The U.S. Department of Justice sided with Colorado's local governments, which is the most recent case of a growing wave of governments pushing for...

The EU Net-Zero Industry Act Explained

The European Commission (EC) proposed the Net-Zero Industry Act to ramp up manufacturing of clean technologies in the EU and make the bloc prepared...

Carbon Credits from Efficient Railways

EKI Energy Services Ltd. (EKI) has made a deal to provide consultancy service contracts for the carbon credits project of Kochi Metro Rail Limited...

What are Renewable Energy Credits vs. Carbon Credits

Also known as green tag, the use of renewable energy credits (RECs) have been on the rise as entities are looking for ways to...

Wood Vault: a Carbon Storage System to lock CO2 away

Removing carbon dioxide through dead trees and storing it for thousands of years underground is a mission that seems to attract nobody. But a...

How Do Carbon Offsetting Projects Work?

All companies will have to take responsibility for their carbon footprint and carbon offsetting projects are becoming their strong ally.  A business may have already...

Inside Carbon Markets: Problems, Causes, and Potential Solutions

The recent scandals in the carbon markets show that just like other markets with contested reputations, rules are needed that go beyond certification. There should...