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Latest data from Abatable shows most attractive VCM investment opportunities with Colombia taking top spot
- Abatable’s VCM Investment Attractiveness Index uses the latest comprehensive carbon market data to unpack the countries that are most primed for carbon market investment worldwide.
- Colombia, Kenya and Cambodia top this year’s ranking as the most attractive carbon market investment opportunities, with Article 6 readiness and ample supplies of in-demand credits being key drivers for their high scores.
- Implementing national compliance schemes that integrate carbon credits significantly increases investment attractiveness, and market growth is expected to accelerate due to pressure to deliver international climate targets.
NEW YORK, Sept. 26, 2024 /PRNewswire/ — Colombia, Kenya, Cambodia, Mexico and Peru are the top five most attractive countries for investors in carbon credits, Abatable’s comprehensive new Index shows.
Abatable, a leading provider of end-to-end carbon market solutions, unveiled the second annual VCM Investment Attractiveness Index today at Climate Week NYC. The Index ranks the top countries according to current voluntary carbon market (VCM) conditions and their potential to shape the future of carbon markets. It provides comprehensive data and local insights for investors, governments, carbon credit buyers and project developers to best navigate the market.
This year’s top five countries emerged, thanks in the most part to their regulatory advances to provide more stable and future-proofed environments in which carbon project developers can operate. For instance, Colombia’s carbon tax has stimulated substantial market activity and spurred project development, while Kenya released the carbon markets regulation in 2024 that has resulted in a more robust and project-friendly environment for carbon project development and investment.
The rankings are based on three pillars and 24 indicators that analyse countries’ investment landscapes, their readiness to engage with national and international carbon markets and the opportunities available for the VCM to improve their environmental and social conditions.
Colombia (first place) and Cambodia (third) are new to the top five ranking this year, moving Ghana and Malawi to 8th and 11th place, respectively. Colombia jumped 13 places while Cambodia jumped four, pushing Kenya into second place, Mexico into fourth and Peru to fifth.
Following a turbulent period, the Index underlines and reflects the VCM once again emerging as a robust mechanism to achieve credible climate action by governments and businesses alike — but the investment landscape contains varying levels of risk and complexity. Abatable aims, through resources such as this Index, to empower informed decision-making within the VCM and give market participants the necessary insights and tools to de-risk and succeed.
Commenting on the Index, Pedro Carvalho, Head of Policy and Markets at ecosecurities, said: “Abatable’s VCM Investment Attractiveness Index is a powerful tool to support investment decisions in the VCM. In a moment of global transition, with emerging regulations articulating carbon market provisions and innovative approaches continuously being developed, there are many factors to consider in the creation of successful carbon projects and carbon markets. Abatable’s Index, which can guide not only investment decisions but also public policy development, is thus a very relevant and important addition to the space.”
The data reflects year-on-year changes, such as the level of government engagement with both voluntary and compliance-based carbon markets, supply of in-demand carbon credits and the number of project developers operating in each country, which can improve attractiveness from an investment point of view. In the past year, countries that have laid considerable groundwork for the operationalisation of Article 6 of the Paris Agreement on climate change — which allows carbon trading between nations — have excelled, benefitting from a first-mover advantage.
Between 2023 and 2024, Madagascar jumped from 18th to sixth place, due in part to its strong number of unilateral Article 6 credit authorisations and presence of an Article 6 Designated National Authority; Zambia jumped from 31st to 10th, due to its establishment of an Article 6 regulatory framework and a drop in government expropriation risk; and Brazil jumped 33 places into the top 10, due to its significant increase in carbon credit supply that is in demand from the market.
Valerio Magliulo, Co-Founder and CEO of Abatable, said: “The carbon market landscape continues to evolve and with this, access to trustworthy, reliable information to guide investment decisions becomes extremely important. The VCM Investment Attractiveness Index is a critical tool that helps democratise carbon market data for the benefit of participants across the market, enabling them to make informed decisions and navigate the VCM, ultimately helping to scale the market as a whole.”
The 2024 Index also highlights the significant investment boost that compliance schemes with integrated carbon crediting mechanisms can offer a country. With growing pressure to meet and set ambitious international climate targets (Nationally Determined Contributions) and partly in response to carbon import taxes, such as the EU Carbon Border Adjustment Mechanism, further growth in these compliance schemes is expected.
Notes to Editors
Abatable has launched the VCM Investment Attractiveness Index under its new free tier of its redesigned market intelligence platform. The new platform merges Abatable’s free and paid content and offers an easy entry point for users to explore the carbon market and Abatable’s solutions to help navigate it, without upfront costs. Abatable’s intelligence platform identifies the market trends that matter most, including policy, pricing, credit supply and demand, projects and market developments. Further information on the platform can be accessed here.
The Index, available here, is accompanied by a deep-dive Insights article and updated Methodology.
About Abatable
Abatable is a leading provider of end-to-end carbon markets solutions, on a mission to enable all organisations to build a thriving future for climate, nature and people. It does this by developing the tools needed to confidently navigate carbon markets and find the right partners, understand market risk and amplify planetary impact. Its solutions are enabled by technology, and powered by people, making it a trusted guide for organisations looking to take action within the complex and evolving carbon markets.
For further information on Abatable and its carbon market service offering, go to abatable.com.
About the VCM Investment Attractiveness Index
The VCM Investment Attractiveness Index was first launched in September 2023 by Abatable, in collaboration with Howden. It was designed to provide investors with insights on countries’ carbon market risks and opportunities, allow carbon credit buyers to get more information about the carbon credits they are purchasing, and aid governments in developing policies to facilitate the growth of the VCM.
This year, Abatable is solely launching the second edition of the Index. In line with Abatable’s objective of continuously tracking and ranking countries on their appeal to VCM investors, credit buyers and project developers, all 24 indicators have been reviewed and updated where appropriate for the 2024 Index. The latest data points, available as of July 2024, have been used to provide the most recent and accurate picture of countries’ latest developments in the market.
The full updated methodology for the Index can be found here.
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