AlliedOffsets is excited to announce the launch of a Market Activity Tracker for the voluntary carbon market.

The Tracker captures volumetric variations of carbon credit trades over time, releasing an up-to-date metric which sums up current market trends. The goal of the Tracker is to map where and how carbon credits are being traded, shedding some light on what goes on between the issuance and the retirement of the credits.

Carbon credits are traded both over the counter (OTC) and through exchanges before getting retired. While retirement activity is tracked by multiple AlliedOffsets’s products and dashboards, trading activity is by nature less transparent, as trades don’t have to be reported on carbon registries. The Trading Activity Tracker aims at filling this gap, providing valuable insights for brokers, traders and project developers on current market trends.

How does it work?

First, the Tracker gathers together volumetric data on trading activity on a weekly and monthly basis, spanning from 2021 to present. The Tracker considers both trading volumes (i.e. quantities of credits traded per transaction) and number of trades performed, in order to ensure high sensitivity to variations.

Secondly, the Tracker compares volumetric data of each week to the previous three weeks, defining whether trades have been increasing or decreasing over time. Comparing data to the previous weeks ensures a consistent and reliable reference period to draw insights on.

Finally, the Tracker generates an overall percent variation which indicates how much trading activity has been increased or decreased in each time block. Percent variations for the current month are available at AlliedOffsets’s public pricing page. Past trading activity variations are also available on request.

Why are we keeping an eye on it?

AlliedOffsets aims to increase transparency in the VCM: you can request a demo for further info on our products’ suite. The Trading Activity Tracker looks specifically at where credits are being traded and in what quantities, generating up-to-date and freely available information on current volumetric levels.

Trading activity is a key signal of market performance and it can help to identify market sentiment, interest and opportunities. Finally, the Tracker can be used in combination with AlliedOffsets’s recently launched liquidity metric, to gather stronger insights into market’s liquidity levels.