The depreciation of older vintage credits is a well-recognised tendency in the voluntary carbon market. The price gap is stark: credits from 2021–2023, for example, command a premium of more than 200% compared to those from 2016–2020, with recent vintages consistently fetching the highest prices, even across project quality types.
In our conversations with buyers, a familiar concern is that older credits issued against earlier methodologies carry integrity risks. Some assume a five-year rule of thumb, where they don’t touch anything older than that. The ICVCM’s CCP labelling process, which has been excluding credits verified under these older methodologies, is only likely to compound this.
Market logic
The question now, however, is whether this depreciation effect will continue to the same degree, following the structural shifts that took place in the market around 2023. Today’s market, with its advance MRV, ratings agencies, new and updated standards, governance bodies like IC-VCM, SBTi etc, is far more robust and geared towards quality, compared with the pre-2023 market. If it is true that integrity concerns drive the vintage discount, should we expect a narrowing of that gap now that many of the integrity and governance concerns have been addressed?
Our thoughts are that the answer is probably ‘yes, but slowly.’ Buyer habits and procurement heuristics are sticky, and the vintage discount has become institutionalised in the way some exchanges structure contracts and corporates frame their offsetting claims. But the logical foundation for that discount no longer holds for projects that have undergone re-verification or whose methodologies have been updated. A project validated under Verra’s latest VM0007 revision, for instance, carries the same methodological rigour regardless of when its earliest credits were generated. The market has just not yet caught up with that reality.
Permian Global has long argued that the discount logic is scientifically unsound and commercially perverse and that instead other factors such as high independent ratings and community and biodiversity benefits should be far more important. In a paper [LINK] written by our Technical Manager, Dr. Leonardo Sáenz, we argue that this depreciation both penalises those high-quality NbS projects that carried the greatest early-mover risks and ignores the compounding climate value that older credits have already delivered.
Durable proof
There is also an interesting irony here with a parallel issue in the market, that of permanence. Questions over how NbS projects should demonstrate durability or permanence has become a live debate, especially as SBTi revises its requirements. Surely, older, well-established projects help to demonstrate greater longevity. This point is difficult to ignore. Critics of older vintage credits implicitly treat age as a proxy for risk, yet the market simultaneously demands that NbS projects demonstrate long-term permanence, a quality that can only be evidenced through sustained operation over time. A project that has protected forest continuously for fifteen years, survived political cycles, maintained community relations and passed repeated third-party audits is, by any reasonable measure, a stronger demonstration of permanence than a project that issued its first credits eighteen months ago. Penalising the former while rewarding the latter inverts the logic of permanence entirely.
On its own, a vintage says very little about a project’s quality, but mix in a high rating, evidence of robust community and biodiversity impacts and supplementary information such as clear SDG progress and buyers are able to gain a far more rounded picture of what is happening behind a credit. We have seen the market’s flight to quality intensifying, NbS offtake agreements doubling in 2024 and average prices for high-quality NbS credits exceeding $20 per tonne. As buyers grow more sophisticated about what quality actually means, the blunt instrument of vintage year should give way to more serious project-level assessment.
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