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A quarterly roundup of market developments, integrity standards, and regulatory shifts for corporate buyers.
The voluntary carbon market is maturing fast. Nine major carbon-crediting programs, including Verra, Gold Standard, ACR, and CAR, have been assessed as CCP-eligible by the ICVCM, and over 38 specific methodologies have been approved so far, with more under review. Forward purchase agreements surged 58% last year as companies locked in future supply.
The infrastructure for a high-integrity market is largely in place, but purchasing activity hasn't caught up. Credit retirements fell 7% in 2025, even as corporate climate commitments surged 227%. Many corporate buyers haven't yet updated their mental model of what the market looks like today.
This quarterly roundup from CNaught’s experts is for sustainability professionals tracking market developments, corporate buyers evaluating their credit strategies, and anyone who needs to brief leadership on where things stand.
Several major reports dropped this quarter. The through-line: the market is prioritizing quality over volume.
Credit retirements fell 7% in 2025 to 157 million metric tonnes, far below the billion-tonne projections from earlier in the decade. Meanwhile, corporate climate commitments exploded, despite most organizations with 2030 climate targets having yet to actually engage in carbon credit procurement.
The removal credits companies will eventually need are still a small fraction of the market. CDR represents roughly 5-6% of VCM credits, and supply remains constrained. Buyers considering removal credits as part of a long-term strategy should be watching the supply picture closely, because the credits they'll eventually need may not exist if demand signals don't come soon.
Quality among the credits that are retiring is improving. BeZero Carbon's analysis found that A-to-AAA rated credits more than doubled their share of retirements, rising from 10% in 2022 to 22% in 2025. Credits rated C or D fell from 31% to 17% over the same period.
Sylvera's State of Carbon Credits 2025 reinforced that while retirement volumes declined 4.5%, market value grew 6% to $1.04 billion. High-quality credits (BB+ and above) now represent half of all retirements and 70% of total market spend. Abatable's February report added another dimension: forward agreements rose 58% to $5.8 billion in 2025. Companies are locking in future supply rather than relying on spot markets, suggesting buyers expect prices to rise.
The data paints a picture of a cautious market, but the companies that are active are getting more deliberate about how they engage.
The Morgan Stanley Institute for Sustainable Investing surveyed 225 global companies with over $1 billion in annual revenue and found that over 90% of current buyers plan to continue purchasing voluntary carbon credits, with median volumes expected to rise more than 25% by 2035. For these companies, the biggest factor shaping future purchase volumes isn't pricing or regulation. It's progress on their own decarbonization strategies, cited by 32% of current buyers as the primary driver. Credits are increasingly treated as a complement to operational reductions, not a substitute.
The picture is less clear among companies that haven't entered the market yet. More than half of future buyers reported low visibility on how many credits they'll ultimately need, and pricing remains their top concern. Among non-buyers, 39% said they expect to fully decarbonize within their own value chains without credits, though notably, only 25% of non-buyers currently have a net-zero target compared to 95% of current buyers.
Meanwhile, direct offtake agreements for carbon removal surged to over $7 billion in value through November 2025, up from $2.6 billion in 2024. Growth is concentrated in long-dated, delivery-linked contracts rather than spot market activity, suggesting buyers expect both prices and competition for high-quality supply to increase.
Some of the most visible corporate action this quarter came from a new coalition targeting superpollutants. In March, Amazon, Autodesk, Figma, Google, JPMorgan Chase, Salesforce, and Workday committed up to $100 million through the Superpollutant Action Initiative, managed by the Beyond Alliance. The initiative targets methane, soot, and refrigerants, which are collectively responsible for an estimated half of global climate warming to date and can be mitigated faster than CO2 through targeted interventions. The timing tracks with broader market shifts: superpollutant projects now make up roughly 20% of all credits issued in the VCM, according to Carbon Direct's 2026 report, up from a negligible share just a few years ago.
At least two members, Google and Workday, have already backed methane reduction projects. The initiative plans to publish an investment roadmap later this year.
For years, "How do I know if a credit is high-quality?" was a question without a good answer. That's changing.
Thanks to the Integrity Council for the Voluntary Carbon Market (ICVCM), nine carbon-crediting programs are now CCP-eligible, and over 38 specific methodologies have been approved so far, covering the vast majority of historical market volume. CCP-labeled credits are now commanding a price premium averaging around 25% compared to non-labeled credits.
In December, the ICVCM confirmed Puro.earth as CCP-eligible, the first removal-focused program to earn the designation. Puro's methodologies for biochar, carbonated materials, and geologically stored carbon can now be assessed for CCP approval. Given the market's need for high-durability removal credits, this is significant.
Verra also released Version 5 of its Verified Carbon Standard, introducing its most comprehensive social and environmental safeguards to date. New projects must apply VCS v5 starting January 1, 2027. The standard includes stronger protections for Indigenous Peoples and local communities, clearer "right to operate" definitions, new financial disclosure requirements, and shorter reassessment cycles.
In a sign of how far the market has come, the International Carbon Reduction and Offset Alliance (ICROA) announced it will wind down operations by late 2026. ICROA, a pioneer in voluntary market standards since 2008, sees newer integrity frameworks like ICVCM and the Voluntary Carbon Markets Integrity Initiative (VCMI) as well-positioned to continue the work they started.
The Science Based Targets initiative (SBTi) is also clarifying the role of carbon credits in corporate climate strategy. The Corporate Net-Zero Standard V2, expected this spring and mandatory from January 2028, introduces "ongoing emissions responsibility" as a concept (replacing the older "beyond value chain mitigation" terminology). The draft creates voluntary recognition tiers for companies that address their ongoing emissions with high-integrity credits now, before the requirements kick in. For companies wondering whether purchasing credits "counts," SBTi is providing an answer.
Q1 2026 brought regulatory developments moving in opposite directions.
In February, the California Air Resources Board (CARB) approved the final text of SB 253 and SB 261. Companies doing business in California with over $1 billion in revenue will need to report Scope 1 and 2 emissions by August 10, 2026. SB 261, which requires climate risk disclosures, remains paused pending litigation, but over 120 companies have voluntarily submitted reports already. AB 1305's carbon credit disclosure requirements remain in effect. For companies with California exposure, the compliance clock is ticking. Our AB 1305 reporting tools can help.
The aviation industry's CORSIA now has real offsetting requirements. And as of January 2026, 130 states are participating. According to the requirements, airlines must offset emissions above 85% of 2019 levels, with compliance due by January 2028.
The International Air Transport Association (IATA) estimates demand between 146 and 236 million credits for the 2024-2026 period, with compliance costs rising to approximately $1.7 billion for 2026. Phase 2, beginning in 2027, will be mandatory for most ICAO member states and is projected to require 1 to 1.5 billion credits cumulatively through 2035.
On February 12, the Trump administration repealed the EPA's 2009 endangerment finding, the legal foundation for federal greenhouse gas regulations. The move removes the legal basis for vehicle emissions standards, power plant regulations, and other federal climate rules.
Legal challenges are expected to reach the Supreme Court. The US withdrawal from the Paris Agreement took effect January 27, and the administration has announced intent to withdraw from the United Nations Framework Convention on Climate Change (UNFCCC).
The EU's Empowering Consumers Directive enters force in September 2026, banning generic "climate neutral" claims without substantiation. CCP alignment is increasingly becoming the standard for defensible corporate climate claims in European markets.
A few threads from CNaught's recent work reinforce these broader trends.
This month, we launched Carbonlog, an open-source Claude Code plugin that tracks the CO2 and energy cost of AI-assisted coding sessions in real time. The methodology is based on independent academic research, and the plugin is designed to be turnkey: install it in 30 seconds and see your emissions as you work.
As AI tool adoption scales across engineering teams, inference emissions are becoming a category sustainability professionals will need to account for.
Earlier this year, we surveyed ~20 sustainability professionals across industries including finance, retail, healthcare, tech, and higher education. A recurring theme: while most organizations have set climate commitments, many lack clear roadmaps for achieving them. Direct emissions reductions should come first, with credits serving as a practical tool for addressing Scope 3 as net-zero deadlines approach.
Our analysis of tech sector adoption found that 62% of companies in the NASDAQ-100 Tech Sector Index are purchasing or have purchased carbon credits. Companies using credits as part of their climate plans are nearly twice as likely to be decarbonizing year-over-year — suggesting that credit procurement and emissions reductions aren't substitutes, but complements.
In February, our partner Mast Reforestation delivered its first carbon removal credits from the MT1 Wood Preserve project in Montana. This is the largest issuance to date under Puro.earth's Terrestrial Storage of Biomass methodology, with proceeds funding post-wildfire reforestation.
CNaught purchased MT1 credits to include in portfolios for customers including HMC Architects, Rocky Talkie, and Workato. It's the kind of high-durability, verifiable removal the market data says we need more of.
This is the first digest in a quarterly series. The market is moving fast, and the gap between those paying attention and those who aren't is widening. If you want to discuss what these developments mean for your organization, reach out.
