Q1 2026 carbon market data: quality premium widens as compliance supply takes hold

Carbon credit retirements slipped in the first quarter of 2026, but the numbers tell a more nuanced story than a simple volume decline. According to new data from Sylvera, 51 million credits were retired in Q1 2026, down 8% from 55.3 million in the same period of 2025. Total retirement value fell from $309 million to $290 million. The average price per credit, however, rose from $5.60 to $5.69, a small but telling shift in a market where quality is increasingly doing the heavy lifting.

A bird is taking flight over wetlands with mangroves, tropical forest, wind turbines, and a distant airplane, reflecting the rise of high-quality carbon credits and the shift toward a low-carbon world. AI generated picture.

For the first time, credits eligible under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), the compliance mechanism governing the aviation sector, made up nearly half of all new issuances. The Core Carbon Principles (CCP) standard is also gaining ground rapidly: CCP-accredited credits reached 18% of supply in Q1 2026, up from under 3% in 2023, with the associated price premium more than doubling to $3.83 per credit.

The spread between investment-grade and lower-rated credits is becoming one of the defining features of the current market. BBB+-rated credits now account for 30% of new rated issuances and 62% of total rated market value, up from 13% and 31%, respectively in 2023. Average prices for BBB+ credits reached $20.10 in Q1 2026, compared with $18.10 a year earlier. B-rated credits averaged $7.80, down from $8.50 over the same period. In the REDD+ (Reducing Emissions from Deforestation and forest Degradation) segment specifically, higher-rated credits have posted price gains for three consecutive quarters, with lower-rated equivalents showing no movement.

Beyond the ratings picture, the composition of supply is shifting. Clean water projects reached 8.2 million credits annually by end of 2025, 38 times their 2021 output, making them the largest subcategory among a cluster of fast-growing project types. Marine and mangrove projects reached 5.3 million credits, and nitrous oxide abatement at nitric acid plants grew 17 times since 2021 to 6.7 million credits. Regenerative agriculture is the standout: from near-zero through 2024, it is now annualising at more than 5 million credits in Q1 2026, the fastest rate of change of any category tracked in the dataset.

'The first three months of the year have seen a fall in volume, but values are holding firm,' said Allister Furey, chief executive of Sylvera. He added that supply constraints could intensify, as high-quality credits become scarcer and regulatory bottlenecks limit the availability of fully compliant credits, setting the stage for tighter markets in the months ahead.

The CORSIA supply picture illustrates the scale of the challenge. Fully authorised emissions units now total 32.68 million, more than double the 15.84 million on record in Q1 2025, yet projected Phase 1 demand stands at 181 million credits before the compliance deadline of January 2028. Host country authorisation under Article 6 of the Paris Agreement remains the central constraint, and with that bottleneck unresolved, the gap between eligible-on-paper and compliant-in-practice supply is unlikely to close quickly.