Record Capital Flows Into Carbon Credits as Buyers Act Early

Early-stage capital activity in the global carbon-credit market set a new record in 2025, reaching $22 billion, more than five times 2021 levels and a 72% increase on 2024, according to MSCI Carbon Markets.

Aerial view of restored nature alongside a modern city, reflecting corporate efforts toward climate responsibility. AI generated picture.

The headline figure reflects forward-looking commitments rather than immediate purchases. Corporates, banks, and project developers are increasingly securing supply years in advance, signalling a fundamental shift in how the market operates.

Offtake agreements, where companies contract to receive future credits, reached $12.3 billion in 2025, nearly tripling year on year. For the first time, offtake value exceeded direct project investment, which stood at $9.7 billion. Pre-purchase and forward agreements now represent roughly two-thirds of offtake activity, up from less than a quarter in 2022.

Supply quality is the primary driver. Under MSCI Carbon Project Ratings, only around one-third of available credits achieve a BBB rating or above. Projects in carbon engineering and nature restoration, which together accounted for 93% of 2025 capital activity, show a markedly stronger quality profile. More than 95% of carbon-engineering projects and half of nature-restoration projects meet the BBB threshold, compared with a global average of roughly one quarter.

Corporate capital reached $14.2 billion in 2025, more than tripling year on year, with over 100 corporates contributing. The total number of deals fell from 555 in 2024 to 467 in 2025, even as total value rose, reflecting a market increasingly defined by fewer, larger transactions.

Financing structures are also maturing. Loan financing accounted for 10% of investment value in 2025, establishing itself as a recurring feature alongside direct equity. A $210 million non-recourse project-finance facility arranged by JPMorgan Chase for Chestnut Carbon, funding a 25-year forestry credit agreement with Microsoft, demonstrated how traditional project-finance techniques are being applied to the carbon-credit market.

Future demand continues to build. More than 12,000 companies now hold near-term science-based targets, collectively covering approximately 27 gigatonnes of emissions. For many sectors, meeting those targets by 2030 to 2035 will require access to high-quality credits alongside internal emissions reduction efforts.

Supply constraints, not demand, are the defining risk. The companies acting now are doing so to secure access to a pool of high-integrity credits that may prove insufficient when broader demand arrives.