State of Carbon Credits 2025

The definitive analysis of the carbon market across quality, pricing, demand, and policy

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State of Carbon Credits 2025: A quick overview

Fundamental shifts are reshaping how carbon credits are priced, traded, and valued. Quality now commands clear premiums. Forward markets are expanding. Compliance and voluntary demand are converging. The market is transitioning from a focus on volume to a focus on integrity and long-term value.

This report delivers our most comprehensive ever data analysis across pricing, supply, demand, and policy drivers.

Whether you're a corporate buyer navigating quality versus cost tradeoffs, a project developer positioning for future demand, or an investor valuing carbon portfolios, understanding these structural shifts is essential for strategic decision-making in 2026 and beyond.

Inside this report:

How quality premiums are reshaping carbon credit economics
Where forward markets signal future pricing dynamics
Why and when compliance demand will overtake voluntary markets
What these shifts mean for your carbon strategy

What's Inside: Key Findings from 2025

Structural shifts within the market

While retirement volumes declined 4.5% to 168 million credits, market value grew 6% to $1.04 billion, demonstrating that quality and price, not volume, now drive growth.

Quality drives value: High-quality (BB+) credits grew from 44% to 50% of retirements - from 61% to 70% of total spend - as buyers paid premiums for integrity
Supply tightening accelerates: BBB+ credits experienced their third consecutive year of deficit, with declines signaling early positioning through offtakes is increasingly critical
Forward market expansion: $12.25 billion in offtake deals will deliver ~$2 billion annually from <10% of current volumes. If this pricing extends broadly, it suggests 3x market value growth potential

Prices of carbon credits

2025 marks the year where integrity ratings are most clearly embedded in pricing dynamics, reflecting years of growing buyer awareness in the impact of quality.

Quality premiums clear: High-rated ARR projects trade above $35 while lower-rated equivalents sit below $20
Cost structures matter: ARR, REDD+, and tech-based projects trade at different base prices reflecting implementation costs, but quality determines the premium within each category
Co-benefits command value: Projects delivering strong environmental and social outcomes beyond carbon secure measurable price premiums as buyers seek wider impact

Buyer trends and preferences

Overall corporate appetite for carbon credits remained robust, but the composition of buyers and their preferences shifted notably.

Energy dominates but shifts emerge: Energy and utilities account for 50% of identified retirements, transportation declined notably, professional services grew to second-largest demand source
Sectoral preferences diverge: Energy favors forestry, professional services lean toward cookstoves, and transportation concentrates on renewables, reflecting distinct strategic priorities across industries
Quality scrutiny varies widely: Consumer goods, food & agriculture, and transportation rely on lower-rated credits for 60%+ of purchases

Policy drivers shaping the future

Compliance demand is poised to reshape carbon markets fundamentally, with voluntary and regulated buyers increasingly competing for the same high-quality supply.

Convergence accelerating: Compliance programs represented 24% of 2025 retirements and Sylvera modeling projects they'll exceed voluntary demand by 2027, driven by CORSIA's Phase 1 deadline and expanding domestic systems
Article 6 gains momentum: 20 new bilateral deals signed and first major trades completed in 2025, demonstrating operationalization of international carbon credit transfers
Complexity rises with opportunity: Corresponding adjustments emerged as the critical credit differentiator, while domestic systems in China, Japan, Brazil, and Indonesia promise substantial demand
Webinar

The State of Carbon Credits: Expert Data Briefing

Get deeper insights from Sylvera's carbon market experts as they unpack the report's key findings, discuss implications for 2026 planning, and answer your questions about market trends.

February 18, 2026
4pm UK Time, 11am EST, 8am PST
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