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Reducing carbon dioxide (CO2) emissions is one of the most important tasks in combating climate change. One way to offset CO2 emissions is to buy CO2 certificates. Companies that produce CO2 emissions in the EU are required to purchase CO2 allowances in order to be allowed to produce one ton of CO2. But private individuals can also buy CO2 certificates to offset their carbon footprint. The purchase of CO2 certificates finances climate protection projects and offsets the quantities of CO2 emitted. In this article you will learn how to buy CO2 certificates, what price you have to pay for them and how prices have developed in the past.
Companies can buy CO2 certificates as part of the mandatory CO2 compensation on energy exchanges such as the Leipzig EEX. Private individuals can purchase CO2 certificates from one of the many CO2 certificate providers. It is important that the CO2 certificates you buy meet reliable standards such as the Gold Standard, the VER Standard or the Verified Carbon Standard.
The price of CO2 allowances has increased in recent years and was over €60 per ton of CO2 in October 2021. The reasons for this are the increased shortage of CO2 certificates and the temporary halt to the auctioning of emission rights until the end of January 2021.
Trading in CO2 certificates is an implementation of the Kyoto Protocol, a binding treaty designed to curb climate change. By purchasing CO2 certificates, companies can produce and emit one ton of CO2 within a certain period. The price paid is to be used to implement climate protection projects and offset the quantities of CO2 emitted.
A frequent criticism of CO2 certificates is that the purchase and sale of CO2 certificates does not lead to an actual reduction in CO2 emissions, but only to their compensation. Nevertheless, CO2 allowances make sense, because it is a first step towards mitigating climate change.
The Kyoto Protocol set a cap on CO2 allowances, which has been reduced by 1.74% or 38,264,246 CO2 allowances annually in the EU since 2013. Since 2021, a 2.2 percent reduction in the cap has applied to meet the climate and energy policy target of reducing EU emissions by at least 40 percent from 1990 levels by 2030. A separate cap applies to the aviation sector.
In order to buy CO2 certificates as a private individual, there are now numerous providers on the market. When choosing a provider, make sure that the CO2 certificates have reliable standards such as the Gold Standard, the VER Standard or the Verified Carbon Standard. These standards ensure that the financial resources from the purchase of CO2 certificates are actually used for climate protection.
The price development of CO2 certificates depends on various factors. On the one hand, the shortage of CO2 certificates plays a decisive role. If the cap on CO2 emissions is reduced, the demand for CO2 certificates will increase and so will the price. On the other hand, politics can also influence the price of CO2 certificates through changes in laws and regulations.
Another criticism of CO2 certificates is that trading does not necessarily lead to a reduction in CO2 emissions, but merely enables CO2 emissions to be offset. Nevertheless, CO2 allowances can be seen as a first step towards mitigating climate change. By purchasing CO2 certificates, each individual can make a contribution to climate protection and create awareness of their own CO2 emissions.
Investments in CO2 allowance trading may be worthwhile, as demand for CO2 allowances is expected to continue to rise. Particularly in times when politicians are focusing more on climate protection and companies are being forced to reduce their CO2 emissions, the demand for CO2 certificates will continue to grow. However, it should be noted that trading in CO2 certificates is also associated with risks and a careful analysis of the market situation is necessary in order to invest successfully.
In summary, CO2 allowances are an important tool for mitigating climate change. Both companies and private individuals have the opportunity to purchase CO2 certificates and thus offset their CO2 emissions. It should be noted, however, that trading in CO2 certificates does not necessarily lead to a reduction in CO2 emissions, but merely enables CO2 emissions to be offset. Nevertheless, CO2 allowances can be seen as a first step towards mitigating climate change, and investments in CO2 allowance trading can pay off in the long term