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Voluntary carbon credits market expected to increase 100 times by 2050 - Sunny Trinh

Kitco News

As the world gets closer to its net zero carbon emissions target in 2050, the carbon credits market has the potential to explode. The carbon credits market consists of the voluntary and regulatory markets. “The voluntary market is valued at about $1 billion this year, and the demand for voluntary carbon credits is expected to grow 15 times by 2030,” emphasized Sunny Trinh, CEO, DevvESG. “It is predicted to increase 100 times by 2050. The regulatory compliance market is more than $850 billion today. We are approaching a $1 trillion market.”

Trinh discussed the carbon credits market with David Lin, Anchor at Kitco News. DevvESG is a carbon streaming royalty company.

Trinh explained how carbon credits work. One carbon credit eliminates one ton of carbon dioxide from the environment. Those credits are then sold to companies around the world. “The idea behind carbon credits is sound, but there are major hurdles in producing carbon credits. First, it’s a long, expensive and complicated process,” he said. “Second, projects need money up front before they can generate a single carbon credit. This is especially true with technology-based projects.”

Describing the difference between DevvESG, which is a technology-based solution company, and other streaming companies, Trinh said, “There are many other streaming companies out there, and all of them focus on nature-based solutions. The biggest difference is that because of our network and experience, we focus on projects and technology that revolve around energy efficiency, renewable energy, elimination of greenhouse gases, such as electrification of vehicles, and UV chargers.”

Trinh continued, “The nature-based solutions companies revolve around projects that occur in nature like forestry or mangrove projects.”

Trinh disclosed that any public company these days is going to be using carbon credits. “Microsoft, Apple, and Google are all buying carbon credits. Google has been buying them since 2012, and more companies are going to do the same,” he pointed out. “Companies only want to do business with companies with good ESG scores and improved carbon footprints. For public companies, institutional investors are already making comments that they will only invest in those stocks where there are positive carbon footprints.”

Regarding the rising demand and higher prices for carbon credits, Trinh said, “It could be interesting for investors, because all the experts are saying that the demand and pricing are going to increase significantly over the next several years and continue to do so for quite a while,” he noted. “If you look at the past year alone, the price of a voluntary carbon credit has doubled from around $7.50 to $15. And the regulatory compliance market has doubled too.”

Trinh gave an example of a technology-based solution project DevvESG is working on. “We are doing a light bulb replacement project in a developing nation in Africa. We are taking hundred-watt incandescent bulbs and swapping them out for seven-watt LED bulbs,” Trinh described. “That is 93% energy savings. This may not seem like a big deal, but it is because this nation uses diesel power generators which are very dirty. We are looking to switch out four million bulbs there, which will generate one and a half million carbon credits or reduce emissions by one and a half million tons per year.”

Trinh spoke about the industries that have the most need for carbon credits. “The ones where there’s a heavy reliance on fossil fuels, the manufacturing industrial sector, the oil and gas sectors,” Trinh revealed. “And the automotive sector right now until it becomes all purely electrified.”

For more on how much the carbon credits market is expected to grow, please watch the full video above.

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