Offset markets struggle in the face of surging commodity prices

The loamy soil and dense jungle of the Sumatran rainforest in Indonesia can store an average of 282 tonnes of carbon dioxide per hectare. If a group of climate-conscious airline passengers were to find a hectare of such forest at risk of being cut down for palm oil and were able to stop that happening, they would offset the amount of greenhouse gases emitted by 175 passengers flying, economy class, from London to New York and back.

Demand for such carbon offsets is forecast to rocket over the next couple of decades, as businesses attempt to make good on their promises to reach net zero carbon emissions. Last year an estimated $1bn was spent on offsets. McKinsey, a consultancy, predicts that the size of the market could expand by a factor of 15 by 2030 and 100 by 2050. Although a few projects use novel technology to suck carbon dioxide out of the air altogether and store it underground, most offsets promise to subsidise renewables or pay for carbon sinks, such as forests, to be restored or preserved. Such “nature-based” offsets can include protecting wetlands in Colombia, or restoring peatland in Scotland.