Assessing the Feasibility of Carbon Markets as a Driver to Achieve Net Zero Target
Carbon credits and offsets traded on voluntary carbon markets (VCM) have become an increasingly popular tool in corporate net-zero strategies. The global VCM is expected to reach $20bn by 2030 making the generation of carbon credits an attractive business opportunity. ReNew seeks opportunities to further participate in VCM as a project developer.
The report consisted of two major components: First, the Capstone team studied the status quo of the global VCM and assessed the regulatory and market dynamics along a self-developed evaluation framework in the following jurisdictions - the US, Europe, UK, China, and Southeast Asia; second, the Capstone team analyzed the necessary steps and processes to create credited projects in all regions, outlining costs and especially proposing a business model for generating and selling credits which is fit for ReNew and the company’s capabilities and interest.
Regarding the project’s key findings, the team concluded that:
- VCMs are growing sustainably with various price and policy signals indicating a growing preference for carbon removal credits.
- The US, UK, and increasingly also the EU, are attractive locations for Carbon Capture and Storage (CCS) credit generation, while SEA can establish itself as a hub for nature-based credits.
- ReNew should adopt an invest-and-sell model, entering into credit off-taking contracts with companies, investing resources in local enterprises and building credit generation projects with them. The proposed model allows ReNew to leverage its competitive edge and lays a path for business success.