Carbon Market Issuances Climb in Q2 as Policies and Cookstoves Lead the Way

The Voluntary Carbon Market (VCM) saw a notable boost in activity during the second quarter of 2025, according to a new report by SCB Group. Issuances climbed by 28% from the previous quarter, reaching 68 million credits—a sign of renewed market momentum powered by both policy action and shifting buyer preferences.

A close-up of energy-efficient cookstoves. Hongera Energy Efficient Cookstoves Project, DGB.

Several major policy developments are helping shape this uptick. The European Union’s new 2040 green plan will allow member states to meet up to 3% of their target using international carbon credits—provided they meet strict quality and transparency rules. In parallel, the UK has proposed reforms to standardise corporate green transition plans and ESG disclosures, while Chile is tightening its national environmental targets and expanding offset use via its Huella Chile registry. On the global front, airports operating at the highest environmental accreditation levels are now required to use only high-integrity credits for emissions that cannot be reduced directly.

Technology trends also played a key role in the issuance surge. Cookstove projects led all categories, making up 29% of new credits issued. These were nearly evenly split between Verra and Gold Standard. Wind projects followed at 20% (mainly Gold Standard), with REDD+ close behind at 13% (entirely under Verra). The American Carbon Registry (ACR) made headlines with a 465% increase in issuances compared to Q1, helping to bring total supply back in line with early 2024 levels.

Supply by Registry.

The United States was the top issuing country in Q2, accounting for 34% of credits, followed by Mexico and India. However, while supply rose, the overall market surplus also expanded slightly to 675 million credits—though REDD+ credits remained an exception, with their surplus shrinking for the eighth consecutive quarter. Project freezes in Brazil were a contributing factor.

On the demand side, credit retirements rose 26% year-on-year, reaching 42 million, but dipped 13% from the previous quarter. Nearly 70% of retired credits came from vintages issued in 2020 or later. Cookstoves again dominated, with 7.5 million credits retired. India led in retirements at 16%, ahead of the US and Brazil. Verra remained the most-used registry but saw a 33% decline in retirements from Q1, while Gold Standard volumes held steadier—especially in safe water projects.