Support from sponsors, stakeholders and survey respondents enabled our most comprehensive report to date Largest number of survey respondents, Most countries ever represented, and Widest array of variables ever tracked and reported Over 300 survey responses again in 2013, from suppliers in 55 countries Surveyed exchanges, all major registries; surveys in 3 languages Agnostic on credit quality, but do conduct extensive due diligence and peer review of preliminary findings All findings volume-weighted for significance

KEY TAKEAWAYS The market for carbon offsetting grew in 2012 – in tonnes transacted, in new project and buyer locations impacted, and innovations in mitigation, despite challenges to compliance offset mechanisms in EU and US. Corporate social responsibility, industry leadership and pre-compliance were primary drivers of voluntary demand for carbon offsets last year. Sustainable development and “co-benefits” were a key focus – both within and beyond carbon frameworks. Voluntary programs played an increasingly significant role in the development of domestic carbon price mechanisms. Voluntary offset supply was not flooded by stranded assets from the Clean Development Mechanism (CDM) in but is also not immune.

E XECUTIVE S UMMARY

F IGURE 1: H ISTORICAL O FFSET D EMAND BY T RANSACTED V OLUME, A LL V OLUNTARY C ARBON M ARKETS Notes: Based on 763 MtCO 2 e of offsets transacted and reported to Ecosystem Marketplace over 7 survey years. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 2: H ISTORICAL M ARKET S HARE, T RANSACTED V OLUME BY P AYMENT M ETHOD % Share Notes: Based on 65.5 MtCO 2 e associated with a contract type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 3: T RANSACTED V OLUME AND A VERAGE P RICE BY B UYER AND S ELLER T YPES, OTC 2012 $/MtCO 2 e Notes: Based on 324 organizations reporting 66 MtCO 2 e associated with business roles and buyer types. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 4: T RANSACTED V OLUME, V ALUE, AND A VERAGE P RICE BY B UYER R EGION, OTC 2012 Notes: Based on 81 MtCO 2 e associated with a buyer region. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 5: T RANSACTED V OLUME BY V INTAGE AND B UYER T YPE, OTC 2012 % Share Notes: Based on 65.5 MtCO 2 e associated with a contract type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 6: M ARKET P ROJECTIONS, H ISTORICAL D ATA AND S UPPLIER P REDICTIONS Notes: Based on 87 organization responses. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 7: T RANSACTED V OLUME BY P ROJECT C ATEGORY, OTC 2012 MtCO 2 e and % Share Notes: Findings pertain to the 75.5 MtCO 2 e associated with a response to this question, including “N/A” and “Other”. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 8: M ARKET S HARE BY P ROJECT T YPE, OTC 2012 % Share Notes: Percentages and totals may not sum perfectly due to rounding. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 9: M ARKET S HARE BY P ROJECT S TANDARD, OTC 2012 % Share Notes: Percentages and totals may not sum perfectly due to rounding. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 10: F LOW OF T RANSACTED V OLUMES BY O FFSET S UPPLIER AND B UYER R EGION, OTC 2012 MtCO 2 e Notes: Based on 80 MtCO 2 associated with either offset project or buyer location. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 11: R ESPONSE R ATE D ISTRIBUTION BY O FFSET S UPPLIER C OUNTRY L OCATION, 2012 Count Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 12: T HE V OLUNTARY C ARBON M ARKETS V ALUE C HAIN Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

M ARKET O VERVIEW

F IGURE 13: H ISTORICAL O FFSET D EMAND BY T RANSACTED V OLUME, A LL V OLUNTARY C ARBON M ARKETS Notes: Based on 763 MtCO 2 e of offsets transacted and reported to Ecosystem Marketplace over 7 survey years. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 14: H ISTORICAL O FFSET D EMAND BY M ARKET V ALUE, A LL V OLUNTARY C ARBON M ARKETS Notes: Based on $3.6 billion in voluntary offset market value transacted and reported to Ecosystem Marketplace over 7 survey years. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 15: T RANSACTED V OLUME BY A VERAGE P RICE, Notes: Based on 1,142 reported transaction prices associated with 74 MtCO2e. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 16: H ISTORICAL V OLUNTARY O FFSET R ETIREMENTS MtCO 2 e Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 17: C UMULATIVE R ESPONSE C OUNT BY S UPPLIER P ROFIT S TATUS, A LL S URVEY Y EARS Notes: Based on 324 organization responses. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 18: M ARKET S HARE AND A VERAGE P RICE BY O FFSET S UPPLIER P ROFIT S TATUS, OTC 2012 % Share and $/tCO 2 e Notes: Based on 324 organization responses reporting 95 MtCO 2 e transacted. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 19: M ARKET S HARE BY P ROJECT C ATEGORY AND O FFSET S UPPLIER P ROFIT S TATUS, OTC 2012 % Share Notes: Based on 324 organizations reporting 95 MtCO 2 e transacted. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 20: M ARKET S HARE BY S UPPLIER R OLE, , AND A VERAGE P RICE, 2012 % Share and $/t CO 2 e Notes: Notes: Based on 324 organizations reporting 77 MtCO 2 e transacted Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 21: T RANSACTED V OLUME AND A VERAGE P RICE BY B UYER AND S ELLER T YPES, OTC 2012 $/tCO 2 e Notes: Based on 324 organizations reporting 66 MtCO 2 e associated with business roles and buyer types. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 22: M ARKET S HARE BY O FFSET T RANSACTION P LATFORM % Share Notes: Based on 33 supplier responses and data provided directly by three platforms – altogether representing 2 MtCO 2 e transacted. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

O FFSET O RIGINS

F IGURE 23: T RANSACTED V OLUME BY P ROJECT C ATEGORY, OTC 2012 MtCO 2 e and % Share Notes: Findings pertain to the 75.5 MtCO 2 e associated with a response to this question, including “N/A” and “Other”. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 24: M ARKET S HARE BY P ROJECT T YPE, OTC 2012 % Share Notes: Findings pertain to the 75.5 MtCO 2 e associated with a response to this question, including “N/A” and “Other”. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 25: H ISTORICAL T RANSACTION V OLUMES, VCS+CCB AND O THER F ORESTRY S TANDARDS MtCO 2 e Notes: Findings pertain to 85 MtCO2e associated with historical, voluntary forest carbon offset transactions in Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 26: T RANSACTED V OLUME AND A VERAGE P RICE BY C OOKSTOVE C ARBON P ROJECT S TANDARD, 2012 MtCO 2 e and $/tCO 2 e Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 27: T RANSACTED V OLUME AND A VERAGE P RICE BY B UYER AND S ELLER T YPES, F ORESTRY O FFSETS, 2012 MtCO 2 e and $/tCO 2 e Notes: Findings based on 16 MtCO 2 e associated with forestry offsets and a response to both transaction-level and buyer-type questions. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 28: T RANSACTED V OLUME AND A VERAGE P RICE BY B UYER AND S ELLER T YPES, R ENEWABLES O FFSETS, 2012 MtCO 2 e and $/tCO 2 e Notes: Findings based on 26 MtCO 2 e associated with renewable energy offsets and a response to both transaction-level and buyer-type questions. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 29: T RANSACTED V OLUME AND A VERAGE P RICE BY P ROJECT T YPE, 2012 Notes: Findings based on 77 MtCO 2 e associated with transaction-level price, volume, and project type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 30: C HANGE IN T RANSACTED V OLUME AND A VERAGE P RICE BY P ROJECT T YPE, Notes: Findings based on 77 MtCO 2 e associated with transaction-level price, volume and project type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 31: C HANGE IN T RANSACTED V OLUME AND A VERAGE P RICE BY P ROJECT R EGION, Notes: Findings based on 79 MtCO 2 e associated with transaction-level price, volume, and project location. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 32: “U NIQUENESS ” P REFERENCE : C OMPARISON OF H ISTORICAL T RANSACTION V OLUMES FROM P OPULAR P ROJECT T YPES Notes: Based on 28 MtCO 2 e associated with survey responses that report project type, location, and transaction volume. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

M ARKET I NFRASTRUCTURE

F IGURE 33: M ARKET S HARE BY I NDEPENDENT T HIRD -P ARTY C ARBON P ROJECT S TANDARD, 2012 % Share Notes: Based on 70 MtCO 2 e associated with the use an independent third-party project standard. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 34: M ARKET S HARE BY C O - BENEFITS % Share Notes: Based on 31.5 MtCO 2 e associated with the use of an additional co-benefits standard or project area label. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 35: M ARKET S HARE BY D OMESTIC P ROJECT S TANDARD, 2012 % Share Notes: Based on 18 MtCO 2 e associated with the use of an additional co-benefits standard or project area label. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 36: T RANSACTED V OLUME AND A VERAGE P RICE BY P ROJECT T YPE, 2012 Notes: Based on 70 MtCO 2 e associated with the use of an independent third-party project standard. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 37: T RANSACTED V OLUME AND A VERAGE P RICE BY V ARIOUS P ROJECT S TANDARDS AND C ERTIFICATIONS, Notes: Based on 70 MtCO 2 e associated with the use of an independent third-party project standard. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 38: M ARKET S HARE AND A VERAGE P RICE BY P ROJECT S TAGE, P OPULAR P ROJECT T YPES % Share and $/tCO 2 e Notes: Based on 50 MtCO 2 e in 2012 and 4 MtCO 2 e associated with use of select project standards, project types and project stages. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 39: M ARKET S HARE OF I SSUED O FFSETS BY R EGISTRY, 2012 % Share Sources: APX, Markit, J-VER, K-VER, CDC Climat, GHG CleanProjects Registry, and the AU CFI Registry

F IGURE 40: N UMBER OF R EGISTERED P ROJECTS BY P ROJECT C ATEGORY, 2012 % Share Sources: ACR, CAR, CarbonFix, CCB, CCX, CFI, The Gold Standard, J-VER, K-VER, Panda Standard, the Pacific Carbon Trust, Plan Vivo, VER+, VCS, and the Woodland Carbon Code.

D ETAILS OF THE D EALS

F IGURE 41: M ARKET S HARE BY B UYER O RGANIZATION T YPE, OTC 2012 % Share Notes: Based on 75 MtCO 2 e associated with a buyer organization type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

SOURCE: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets F IGURE : M ARKET S HARE OF T RANSACTED V OLUME BY B UYER T YPE, OTC 2012 % Share

F IGURE 42: T RANSACTED V OLUME S OLD TO AND BY R ETAILERS, OTC 2012 MtCO 2 e Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 43: M ARKET S HARE BY B UYER S ECTOR, 2012 % Share Notes: Based on 57 MtCO 2 e associated with a buyer organization type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 44: B UYER S ECTORS ’ D EMAND BY P ROJECT C ATEGORY, OTC 2012 % Share Notes: Based on 57 MtCO 2 e associated with a buyer organization type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 45: T RANSACTED V OLUME, V ALUE AND A VERAGE P RICE BY B UYER R EGION, OTC 2012 MtCO 2 e and % Share Notes: Based on 81 MtCO 2 e associated with a buyer region. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 46: H ISTORICAL M ARKET S HARE, T RANSACTED V OLUME BY P AYMENT M ETHOD % Share Notes: Based on 65.5 MtCO 2 e associated with a contract type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 47: T RANSACTED V OLUME BY V INTAGE AND B UYER T YPE, OTC 2012 % Share Notes: Based on 65.5 MtCO 2 e associated with a contract type. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

R EGIONAL M ARKET D EEP D IVE

F IGURE 48: F LOW OF T RANSACTED V OLUMES BY O FFSET S UPPLIER AND B UYER R EGION, OTC 2012 MtCO 2 e Notes: Based on 80 MtCO 2 associated with either offset project or buyer location. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 49: I SSUED, T RANSACTED, R ETIRED V OLUMES (A LL Y EARS ) AND A VERAGE P RICE (2012) BY V INTAGE : A SIA Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 50: I SSUED, T RANSACTED, R ETIRED V OLUMES (A LL Y EARS ) AND A VERAGE P RICE (2012) BY V INTAGE : N ORTH A MERICA Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 51: C HANGE IN T RANSACTED V OLUME AND A VERAGE P RICE, C ALIFORNIA O FFSET T YPES, Notes: Based on 9.7 MtCO 2 e associated with California pre-compliance demand. ‘CAR and CARB Forestry’ refers to CAR early action and CARB-approved protocol forestry offsets and consists of CAR/CARB IFM and CAR avoided conversion. “Not Specified” includes both CAR early action and CARB-approved protocols for which a project type was unknown/not reported. “Other” includes coal mine and waste water methane, CAR agricultural N 2 O, and landfill methane from multiple standards. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 52: P ROJECTED C ALIFORNIA O FFSET D EMAND AND S UPPLY, S UPPLIER -R EPORTED, CAR R EGISTERED P ROJECTS ’ O FFSETS P IPELINE, AND ACR-E STIMATED T ECHNICAL C APACITY FOR E MISSIONS R EDUCTIONS, Notes: Based on 86 MtCO 2 e associated with survey-reported California compliance offset project pipelines. “Other” includes coal mine and waste water methane; CAR agricultural N 2 O and landfill methane from multiple standards. California-eligible CRT issuance, retirement and estimated annual reductions supplied by CAR. Technical issuance capacity estimates provided by ACR and elaborated in the standard’s 2012 report. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 53: S URVEY R ESPONDENTS ’ E STIMATED 5-Y EAR C ALIFORNIA O FFSET P IPELINE BY P ROJECT T YPE, MtCO 2 e and % Share Notes: Based on 86 MtCO 2 e associated with survey-reported California compliance offset project pipelines. “Other” includes coal mine and waste water methane, CAR agricultural N 2 O, and landfill methane from multiple standards Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 54: I SSUED, T RANSACTED, R ETIRED V OLUMES (A LL Y EARS ) AND A VERAGE P RICE (2012) BY V INTAGE : L ATIN A MERICA Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 55: I SSUED, T RANSACTED, R ETIRED V OLUMES (A LL Y EARS ) AND A VERAGE P RICE (2012) BY V INTAGE : A FRICA Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

P ROJECTIONS

F IGURE 56: M ARKET P ROJECTIONS, H ISTORICAL D ATA AND S UPPLIER P REDICTIONS Notes: Based on 87 organization responses. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013

F IGURE 57: M ARKET P ROJECTIONS, S UPPLIER -E STIMATED P ROJECT P IPELINE V OLUME AND V ALUE, Notes: Based on 351 MtCO 2 e pipeline targeted toward voluntary buyers as reported by suppliers, excluding estimates >50 MtCO 2 e and pre-compliance market volumes, which are discussed in Box 3. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

F IGURE 58: M ARKET P ROJECTIONS, S UPPLIER -E STIMATED S TANDARD U TILIZATION, 2013 Count Notes: Based on 436 unique responses. Source: Forest Trends’ Ecosystem Marketplace. State of the Voluntary Carbon Markets 2013.

Support from sponsors, stakeholders and survey respondents enabled our most comprehensive report to date CONTACT Molly Peters-Stanley, Associate Director Forest Trends’ Ecosystem Marketplace Daphne Yin, Program Associate Forest Trends’ Ecosystem Marketplace