The CO2 price at ForTomorrow
Last year, we had to increase our price for carbon offsets three times. Now again in 2022. Why is that good news?
When you live carbon neutral with ForTomorrow, you offset your CO2 emissions with direct climate protection in Europe. We use two measures to achieve this for you. First, we plant trees in Germany to capture carbon that has already been emitted. Second, we purchase emissions rights away from the major polluters in Europe, like coal-fired power plants, which forces them to emit less CO2.
How do we set our prices?
The price to offset one tonne of carbon dioxide with ForTomorrow is based on the two ways we offset your carbon footprint. For each tonne of carbon you offset with ForTomorrow, we plant two trees in Germany and take half of an European emission right out off the market on your behalf.
EU emissions rights are traded on various exchanges. One of the largest is the Intercontinental Currency Exchange (ICE). Below, you can see how the price for emissions rights fluctuates. Fortunately for everyone, the price increases over the long-term. We tried to keep our pricing stable by using a forecast for the average target value for EU emission rights for 2021. This was €40 per tonne for 2021, not including the VAT that also needs to be included. Fortunately for the climate this forecast was completely off. The price turned out to rise much higher just hitting an all time high of €96 per tonne.
ForTomorrow is a non-profit and we only use a maximum of 15% of our price for salaries, administrative and advertising expenses.
Compensating for a tonne of CO2 with ForTomorrow costs €72. Most of the cost for 2022 is made up of the price of buying emissions rights. I’ve worked in emissions trading before, and know how to purchase the rights as cheaply as possible as a result. Hopefully, the price will continue to rise, because that’s exactly what we’re aiming for. In 2020, I was able to buy the first quantities of rights at just under €20 per tonne. These rights have long been used to offset subscribers’ carbon emissions. The price has continued to rise since then and we have to buy at much higher prices now.
Rising CO2 prices are good news for the planet
This rise in CO2 prices is great news. It means that the EU economy will have to become more climate-friendly, and fast. For example European coal fired power plants need to buy emission rights to be allowed to emit CO2. If the price rises it becomes unprofitable for coal fired power plants to run. Take the CEO of Vattenfall’s explanation for the decision to shut down the new coal-fired power plant at Moorburg for example: “if you lose money with it you have to do something.” Now, the former coal-fired Moorburg is becoming a production facility for green hydrogen.
Rising prices alone are not enough to reach the EU’s climate targets. For there to be truly less carbon emitted in the EU, there must be fewer emissions rights available on the market. That’s why, thanks to the contribution of our subscribers, ForTomorrow purchases emissions right off the market and away from polluting industries.
In addition to reduce carbon dioxide emissions we also need to remove CO2 from the atmosphere. The concentration of CO2 in the atmosphere has peaked so much that climate change would continue, even if everyone immediately started living carbon neutral. That is why your subscription with ForTomorrow will not just buy emissions rights, but will also reforest areas in Germany in effort to reduce the levels of atmospheric CO2 to the safe level of 350 ppm in the long-term.
Rising CO2 prices are good news when it comes to creating a more climate-friendly future. If emitting carbon becomes too expensive for companies, the EU economy will be forced to transition to a more environmentally-friendly way of operating. ForTomorrow enables you to speed this process up, by purchasing more emissions rights off the market and away from polluting industries.