B.C. offsets and earned credits should carry different prices

B.C. operations can settle part of their OBPS obligation with two types of compliance unit, and market reporting has so far shown a single price for both.

Only one of them expires. In a market where eligible supply runs far above what the usage limit allows, that difference should carry a price.

B.C. Carbon Registry, 25 to 27 September 2026; ICAP ETS brief 2025/26 for the 2024 price; Climate Decode B.C. OBPS Market Outlook 2026.

B.C. operations can settle part of their OBPS obligation with two types of compliance unit. Earned credits are issued to regulated operations that emit below their limits. Offsets are issued to projects registered under B.C. offset protocols, currently dominated by forest conservation.

During an eligible period, each unit settles one tonne of obligation. Market reporting has so far shown a single price for both, about $65 per tonne for the 2024 period.

Earned credits do not expire. Offsets remain eligible for their vintage year and the following three compliance periods. After that, they can only be sold to the provincial government or voluntary buyers, typically for $10–12 per tonne, compared with about $65–70 inside the OBPS. The fixed expiry date creates a clear difference in value as an offset approaches the end of its compliance life.

Once an offset leaves the OBPS window, it competes as a voluntary credit, and prices there are a fraction of compliance value. The Province is the largest buyer. It retires about 0.6 Mt a year to make its own operations carbon neutral, and paid $12 per tonne for most Great Bear units in its 2023 portfolio ($9 for some). Corporate buyers pay similar prices. Improved forest management credits from North America traded at an average of about $15 per tonne in 2024, and recent market estimates put the North American average near $17.

Small retail sales fetch more, but only in small volumes. Voluntary demand for B.C. offsets is also uneven, and demand outside the OBPS is concentrated and narrow.

Non-government retirements were about 0.98 Mt in 2024 and 0.94 Mt in 2025, but in 2025 half of that came from a single buyer, Trans Mountain, retiring offsets for its pipeline construction emissions.

An offset that misses its OBPS window therefore loses about three-quarters or more of its value, and finding a buyer depends on a small, price-sensitive market.

Expiry matters because eligible supply greatly exceeds what compliance buyers can use. In 2026, about 6.6 Mt of units are available while the 30% usage limit allows the market to surrender only about 0.9 Mt. Earned credits fill most of that allowance in our outlook, leaving a large share of offsets unused.

By 2030, about 5.9 Mt of offsets are eligible, around 0.3 Mt are surrendered, and approximately 1.9 Mt reach the end of their eligibility that year. Climate Decode B.C. OBPS Market Outlook 2026, Base case.

•Offsets closest to expiry were sold first. Vintage 2021 offsets, which lost OBPS eligibility after the 2024 period, accounted for 78% of the offsets surrendered. The settlement indicates that sellers prioritised units with the least remaining compliance life.

•Earned credits were retained. Operations used or sold 64% of the earned credits issued for the period and kept 36%. With no expiry date, holders had greater flexibility to retain them for future periods.

One reported price today, three different risk profiles underneath it. We model B.C. unit supply, eligibility and prices to 2040.

An oversupplied market should support three price levels. Offsets in their final eligible period face the greatest expiry risk and should trade at the deepest discount. Offsets with more eligibility remaining have greater flexibility and should trade higher. Earned credits carry no expiry risk and retain their compliance value into a tighter future market, supporting the highest price.

The spread should be widest while supply remains well above the usage cap and narrow as Great Bear issuance declines after 2034–35.

Separate prices for offsets and earned credits have not yet been reported, so the Climate Decode outlook applies one price to both. A market split would change how value is distributed between unit holders. Cash payments by regulated operations would remain determined by the obligation, the usage limit and the compliance price.

•For buyers. A final-period offset settles the same tonne as any other eligible unit, giving buyers a basis to seek a deeper discount.

•For offset holders. Selling earlier in a vintage’s eligible life reduces the risk of reaching expiry in an oversupplied market.

•For earned-credit holders. The absence of expiry supports holding value while the market remains long and as offset supply declines after 2035.

•For price reporting. Separating earned credits from offsets, and offsets by remaining eligibility, would provide a clearer market signal.

Climate Decode · Advisory

Are you paying the same price for two different risks?

Unit supply by vintage and eligibility, surrender strategy and price scenarios across B.C. OBPS, Alberta TIER and the federal backstop.

Sources

Greenhouse Gas Emission Reporting Regulation, B.C. Reg. 249/2015, s.41.95; B.C. Carbon Registry (25–27 September 2026); ICAP ETS brief (2025/26) for the 2024 price; Climate Decode B.C. OBPS Market Outlook 2026.

This article is analytical research provided for information only and is not investment advice.