German Emissions Trading Authority

Project regions

Most voluntary carbon offsetting projects used by Germany are based in Asia. Between 2007 and 2009, 53 percent of certificates traded on the voluntary market originated from projects in Asia. The most important of the Asian host countries is China. Over the same period, 22 percent of the projects originated from Latin America. Africa had a proportion of 14 percent and Europe eight percent. Certificates originating from North America were not traded on the German market.

For North American consumers, however, projects from the USA play an important part. Some consumers prefer climate projects implemented in their home country which have some local relevance. In countries that have signed the Kyoto Protocol, there is a risk of domestic projects being doubly counted. Duplicate counting means that reductions are credited to the country as well as to the buyer of the offsetting certificate.

A possible advantage of using domestic projects for carbon offsetting may be the opportunity to promote climate protection on one's own doorstep. We already mentioned the drawback of possible duplicate counting, which could undermine climate protection efforts.

Most offsetting projects are located in developing or emerging countries because the reduction costs per tonne of CO2 are lower. In theory, the reduction costs per tonne of CO2 in Germany are significantly higher than if the same projects were carried out elsewhere. In other words, more climate protection can be bought for same amount of money if invested outside Germany. Furthermore, in contrast to most developing countries, Germany has a wide range of other climate protection instruments, such as the Renewable Energies Act (EEG) or the market incentive programme. Implementing carbon-offsetting projects abroad has another positive side effect – the technology transfer associated with the projects, which can help sustainable development in other countries.

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