Analysis of carbon credit vintage: Does age really matter?

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At the end of 2023, the Taiwan Carbon Exchange sold its first batch of carbon credits under a new set of stringent standards. Among these, a notable regulation requires that carbon credits be issued within the past five years. While certification bodies like Gold Standard (GS) argue that the vintage of carbon credits is not necessarily a priority, others, such as Singapore’s carbon tax system, only permit the use of credits issued from 2021 onwards. Does the age of carbon credits genuinely impact their value? This report dissects the implications of vintage and its role in carbon markets.

Understanding carbon credit vintage

In recent years, vintage—the issuance year of a carbon credit or the year emissions reductions were achieved—has become a key quality metric in carbon markets. Global retirement data for carbon credits (see Figure 1) reveals a preference for projects issued within two to five years of retirement. Three primary factors explain this focus on vintage: