A 2013 report from the Stockholm Environment Institute (SEI) estimates that, based on 1 to 3 tons of CO2e per stove, the cost of emission reductions from improved cookstove projects is approximately $5 to $8 per tCO2e, including verification and monitoring costs. From an investment perspective, these projects are attractive if the carbon credits from these projects command a price of at least $10 per tCO2e or more.

The market for Certified Emission Reductions (CERs) under the Clean Development Mechanism reached these price levels between the years of 2008 – 2011, before prices collapsed to below $1 in late 2012. The chart below shows the decline. Some compliance buyers are still willing to pay a premium over the CER market price for cookstoves carbon credits since they deliver social benefits above and beyond offsetting CO2 emissions, but projects will need to make considerable effort to find these buyers.


The good news is that voluntary buyers place a high value on cookstoves carbon credits and demand for these credits is growing.

Voluntary Carbon Markets

The report, Maneuvering the Mosaic: State of the Voluntary Carbon Markets 2013, found that clean cooking projects were the market’s fourth most popular GHG mitigation activity, transacting 5.8 MtCO2e (a 80 per cent increase over 2011) valued at $65.3 mission (a 54% increase over 2011).

The majority of voluntary offset buyers obtain offsets through decentralized “over-the-counter” (“OTC”) transactions. These are bilateral contracts between buyers and sellers that define the terms of payment and offset delivery. For this reason prices can vary widely according to several factors including:

  • Standard applied: Gold standard projects mostly sell at a premium due to the widely recognized high-quality label.
  • Development/ sustainability impact: The price of a credit will be higher if the project demonstrates positive social, economic, and environmental impacts in addition to reducing GHG emissions.
  • Structure of contract: The price of credits will be higher if the project owner is willing to take up carbon-credit-delivery supply liabilities in case the project is underperforming or fails, in other words accepting payment only on the delivery of the credits.
  • Buyers’ preferences: The voluntary market is a buyer driven market that is powered by the desire of corporations to offset their GHG emissions and/or contribute to sustainable development. Hence, several buyers have their own list of pre-defined preferences or criteria against which a given project has to qualify in order to obtain high prices.
  • Project’s “Uniqueness”: Voluntary buyers are interested in the story behind the carbon credits as well as the GHG reductions and may be willing to pay more to support projects that can differentiate themselves.

In addition to being one of the fastest growing offset types in the voluntary market, cookstoves credits are selling for some of the highest prices observed in the voluntary carbon market recently.


In 2012 GS VERs from clean cooking projects sold for an average price of $11/tCO2e. The chart below shows the 2012 transactions volumes and average price in the voluntary market.


Additional information:

See Maneuvering the Mosaic: State of the Voluntary Carbon Markets 2013, a report by Forest Trends’ Ecosystem Marketplace and Bloomberg New Energy Finance, which has served as the source for some of the information presented here.