Environmental Market Rankings 2023-2024

Positive momentum amid volatility for environmental markets

As sustainability policies ramp up despite geopolitical and economic uncertainty, compliance environmental markets saw a mixed picture of volatility and expansion amid a tightening up of policy in several regions, writes Annabelle Palmer.

Volatile prices were observed across the traded markets featured in Environmental Finance's Environmental Market Rankings 2023-24, particularly within the EU and the UK.

In the carbon markets, which look to put a price on carbon and cap emissions of greenhouse gases, the EU emissions trading system (ETS) winners attributed this volatility to a drop in coal usage and much lower industrial production – which in turn led to a rapid decrease in power sector emissions and less demand for allowances.

Meanwhile, the UK ETS saw a downward pressure on prices as the UK government added an additional 53 million tonnes of additional allowances to the market over the next three years to "smooth the transition".

The standout winner in the EU and UK ETS categories was Evolution Markets, winning across three different Best broker categories. It is the second year in a row that Evolution Markets has won the Best broker categories for the EU and UK ETS.

This year also saw a comeback for CFP Energy (formerly CF Partners) which won two Best trading company categories this year, having narrowly missed out previously with the runner-up position in both the EU and UK ETS markets in 2022.

ClearBlue Markets also did well across the carbon markets categories this year, winning three awards in the Best advisory/consultancy category for its services in Europe, North America and California.

Turning to Asia Pacific (APAC), the winners in these categories mapped out how an explosion of announcements about new markets or a ramping up of policy is transforming the carbon markets there.

It looks like a consolidation of offerings is what held the key winner in good stead this year, with Viridios Group – parent company to winners Viridios Capital and Pangolin Associates – dominating the category with wins across three of the five APAC categories for carbon markets.

Viridios Capital won Best trading company and Best project developer in APAC while Pangolin Associates won Best advisory/consultancy for the region.

North America was also a key region for market expansion in 2023, as Canada and New York both started to develop plans for their own compliance markets, and Washington finally launched its much-anticipated cap-and-trade market.

Across the Best broker categories for the region, Karbone took all four awards – an achievement that builds on the one award they won in the North American carbon categories last year.

They also showed their dominance for being the broker of choice in the green certificates markets as well, winning five awards in this section of the rankings.

This brought Karbone's total awards for this year to nine, an impressive growth of five additional awards compared with its four wins in 2023.

Winners in the green certificates categories describe how demand for Energy Attributable Certificates (EACs) remained bullish across North America, Asia Pacific, and Europe throughout 2023, despite continued volatility in the market.

In North America, despite regional variation, there was an upward trend in pricing for renewable energy certificates (RECs) driven by compliance requirements but primarily by increasing sustainability commitments.

Anew Climate was a big winner for the North American region this year, winning four awards in the North American carbon markets and two awards in the RECs and Renewable Identification Numbers (RINs) markets.

The standout winner for green certificates, however, was STX Group which won seven awards across the green certificates categories, in addition to its two awards in the carbon markets.

With a total of nine awards, this was four more awards than it won in the 2022 Environmental Market Rankings.

A new category for this year's Environmental Market Rankings, renewable natural gas (RNG) was described by Jonathan Burnston, managing partner of Karbone, as "one of the most exciting things happening in the US." He predicted that, as a gas replacement, RNG has far greater potential than hydrogen due to ease of substitution.

It will be a market to watch, as will the performance of Karbone, STX Group, Redshaw Advisors, and Weaver, who all won awards in this new category. Weaver was a new entrant to the Environmental Market Rankings this year – winning awards for its verification services in both the RNG and RINs markets.

Congratulations to all this year's winners.