The report describes a growing and mature market, even as volumes have been held back by policy uncertainty. The supply of reductions in 2009 reached an all time high of 29Mt of CO2e, reflecting a 13% increase from 2008. Of those credits, many were moving towards certification by the Climate Action Reserve, a North American offset standard and registry, which accounted for 65% of the traded value in the 2009 US offset market.

According to the report, Carbon funds and aggregators provided leadership by purchasing 39% of all credits in the primary market, followed closely by financial intermediaries and emitters, which accounted for in 30% and 25% of trades respectively.

The market is still dominated by over-the-counter transactions, which represent 63% of the market. Compliance eligibility drove the market, as buyers looking to purchase credits for use in future cap-and-trade schemes traded $48m in 2009, 65% of the total, the report says.

Justin Felt, author of the report, said: “The growth we are seeing has been driven by forward thinking investors and developers, who either hope to hedge policy risk by buying early or capitalize on a new expanding market. However, until federal cap-and-trade passes, fundamental demand from emitters will continue to be constrained. We forecast tremendous growth in 2010 if this legislation is indeed passed.”

Point Carbon said that once allowance markets such as the Regional Greenhouse Gas Initiative (RGGI) are included, the size of the US carbon market expands to $2.7bn with 841 Mt CO2e trading hands. As US Offset Markets in 2010 outlines, once a compliance scheme is in place, volumes and values will rise exponentially for carbon markets, including offsets.