The voluntary carbon market (VCM) is entering a new chapter—one defined not by volume, but by value. According to Forest Trends’ latest State of the Voluntary Carbon Market 2025 report, the total volume of carbon credits traded fell by 25% in 2024, marking the lowest level since 2018. But despite the slowdown in transactions, the number of credits being retired has remained consistent, indicating that demand for offsets hasn’t disappeared—it’s simply evolving.
More than ever, buyers are seeking credits with proven climate benefits. From corporate sustainability teams to environmentally conscious investors, the focus is shifting toward projects that offer transparency, durability, and measurable impact. The result: a leaner, more discerning market.
As Ricardo Bayon, Partner and Co-founder of Encourage Capital, explains: ‘The underlying fundamental indicator of demand, the retirements, continue to grow and they have been growing on a pretty constant trend since the market was created... Those companies and individuals who are buying carbon and retiring them are still doing so undeterred; chastened but not deterred.’
Carbon pricing reflected this dynamic in 2024, dipping only slightly, down 5.5% to just over $6 per tonne of CO₂ equivalent. Importantly, prices remain more than twice as high as they were five years ago, underscoring robust interest in premium-quality credits.
Removal credits—those that actively extract carbon from the atmosphere through technologies like direct air capture or nature-based approaches like reforestation—have taken centre stage. In fact, they commanded prices over 380% higher than standard reduction credits, showing a strong market shift toward long-term carbon storage.
New quality benchmarks, such as the Core Carbon Principles (CCPs) from the Integrity Council for the Voluntary Carbon Market, are beginning to influence buying decisions. Credits from CCP-approved projects are seeing higher prices and more activity, suggesting that credibility is becoming a key market driver.
Recent vintages are also in demand: carbon credits issued in the last five years sold for more than double the price of older ones, showing a clear appetite for up-to-date climate action.
While some categories like renewable energy and REDD+ are seeing a decline in interest, credits from improved forest management, landfill gas, and blue carbon initiatives are gaining momentum.
Together, these changes point to a market that’s maturing—less about quantity, more about trust, traceability, and long-term impact.