Voluntary Carbon Market 2025: maturity, resilience, and the new private sector leadership

Raphael Der Agopian
Jul 2
6 min read

The voluntary carbon market (VCM) in 2025 is at a turning point, evolving from a supplementary climate tool to a central pillar of the global net-zero transition. This evolution is unfolding amid significant political and regulatory upheaval: the renewed U.S. withdrawal from the Paris Agreement, delays to key EU sustainability directives, and ongoing debates about market integrity. Yet, despite these headwinds, the VCM is not just surviving, it is transforming, with growing sophistication, surging demand, and decisive private sector leadership.

This article explores the VCM’s current state, recent global policy shifts, the rise of offtake agreements, and the reasons behind the private sector’s emergence as the new driver of climate ambition.

I. Global political context: setbacks and shifting leadership

US withdrawal from the Paris Agreement: a shock with paradoxical effects

In early 2025, the Trump administration’s decision to once again withdraw the United States from the Paris Agreement sent shockwaves through the climate community. This move reduced federal engagement, created regulatory uncertainty, and threatened U.S. participation in CORSIA (the global aviation offset mechanism) raising concerns over the eligibility of U.S.-generated credits.

Yet paradoxically, corporate America has responded with unprecedented ambition. Leading companies are advancing their climate commitments:

Microsoft signed a 25-year agreement to purchase 7 million tonnes of CO₂ removals from U.S. reforestation projects.
Salesforce accelerated deployment of AI-powered tools for corporate sustainability strategies.
Meta and Google advanced net-zero timelines and ramped up credit purchases.

European Union: when ambition meets reality

The EU has long been a global leader in climate regulation. However, 2025 has seen a significant slowdown and postponement of key directives:

CSRD (Corporate Sustainability Reporting Directive): Originally set for broad application in 2025–2026, the CSRD has been postponed for many companies, with reporting deadlines for smaller firms now pushed to 2028–2029. There is also discussion of exempting firms with fewer than 1,000 employees in the future.
CS3D (Corporate Sustainability Due Diligence Directive): The first group of companies (over 5,000 employees and €1.5 billion turnover) will now be subject to the directive from July 2028, a year later than planned. The phased rollout for other company categories remains uncertain.

These delays reflect growing political concerns about competitiveness and regulatory burden. France, in particular, has advocated for simplification and delay, with President Macron explicitly calling for these topics to be set aside in negotiations. The “Stop-the-clock” directive, adopted in April 2025, formalized these delays and is widely seen as a step back in EU sustainability ambition, even if the directives themselves have not been cancelled.

Global policy forums and regional markets

While the U.S. and EU grapple with internal politics, other regions are advancing:

China is expanding its carbon market with rising prices and new sectors, despite policy overlap challenges.
Regional U.S. markets like California, Washington, and RGGI are assuming greater importance as federal policy recedes.
COP29 and Article 6 negotiations continue to progress slowly, with growing hopes of integrating voluntary and compliance markets to incentivize integrity and transparency.

II. Market trend: resilience, quality and growth

From crisis to quality

The VCM faced a credibility crisis in 2023–2024, when analyses revealed that 50–90% of projects failed to deliver real emission reductions. This led to a 61% contraction in market size as confidence plummeted.

Yet this reckoning triggered a decisive pivot: buyers now prioritize high-integrity credits that meet stringent standards such as the ICVCM’s Core Carbon Principles. Due diligence, additionality, permanence, and robust verification have become essential. Analysts like MSCI highlight that project quality has markedly improved, with a clear market preference for credits delivering tangible environmental benefits.

Record demand and rising prices

Despite recent turbulence, the VCM is rebounding strongly:

Corporate carbon credit purchases surged 150% in Q2 2025 compared to Q2 2024 (AlliedOffsets).
Average credit prices have climbed 40% year-over-year, driven by scarcity of high-quality credits.
Retirements reached a record 15.2 million tonnes CO₂e in H1 2025, positioning the market to exceed 2023 and 2024 totals.
The VCM’s total value is projected to grow from $1.55 billion in 2024 to $1.89 billion in 2025, with forecasts of $4.13 billion by 2029.

Premiums for quality and removals

Removal credits (e.g., including reforestation and direct air capture) are on average 381% more expensive than reduction credits, up from 245% in 2023.
Credits from recent vintages (issued within the last five years) command a 217% premium, up from 53% in 2023, reflecting buyer preference for newer projects or vintages aligned with recent methodologies.
Nature-based solutions, especially ARR (Afforestation, Reforestation, Revegetation) and Blue Carbon , are in particularly high demand, fueled by corporate net-zero pledges.

III. The strategic rise of offtake agreements

Offtake agreements are long-term contracts in which buyers commit to purchasing set volumes of credits over several years. In 2025, these agreements have become the backbone of the VCM, especially as quality improves and prices rise.

Why are they essential now?

High-integrity credits are in short supply; offtakes ensure future access.
With prices up 40% YoY, offtakes help buyers manage price risk.
Early movers are securing up to 30% discounts compared to spot market purchases.
Developers gain revenue certainty to launch capital-intensive projects.
Buyers increasingly seek deals with reputable developers to guarantee real, verifiable climate benefits.

Recent examples

Microsoft’s 25-year, 7 MtCO₂e reforestation offtake is the largest ever signed by a tech firm, signaling long-term commitment despite policy uncertainty.
The Symbiosis coalition (Microsoft, Meta, Google, Salesforce) aims to secure 20 million tonnes of nature-based CDR credits by 2030.
Over 60% of high-quality biochar capacity for 2025 is already locked in via offtakes, with 28% tied up through 2026.

IV. Clean energy incentives and tech solutions: a mixed picture

While the Trump administration seeks to dismantle the Inflation Reduction Act (IRA), key incentives persist:

45Q tax credits for carbon capture (DAC, CCS, CCUS) remain in place until 2032, ensuring viability for many projects.
Other credits, such as 45V for hydrogen and 45Y/48E for clean electricity, are being phased out, potentially slowing progress in those sectors.

This fragmented landscape favors carbon removal projects supported by 45Q, while clean hydrogen and renewable energy projects face greater uncertainty.

V. The role of standards and market integrity

New standards and guidance

The VCM's credibility depends on robust standards and clear guidance. Recent developments include:

ICVCM Core Carbon Principles: these principles set a global benchmark for high-integrity carbon credits, ensuring that only projects with real, additional and verifiable climate benefits are recognized.
VCMI Guidance: the VCM Integrity Initiative provides frameworks for companies to use carbon credits responsibly, aligning with Paris Agreement goals and avoiding greenwashing.
Science Based Target Initiative (SBTi): the SBTi is considering interim carbon removal targets, which could stimulate earlier investment in carbon removal projects and help address future supply constraints.

Market maturity and transparency

More due diligence, transparency and third-party verification are now expected by buyers and investors.

Premiums for high-integrity credits are rising, and buyers are increasingly willing to pay for trusted verification and recent vintages.

Conclusion

Despite political setbacks and regulatory delays, the voluntary carbon market in 2025 is demonstrating remarkable resilience, innovation, and growth. The rise of offtake agreements, record retirements, and a decisive shift toward high-integrity credits are transforming the VCM into a more credible and mature instrument for climate action.

"Despite uncertainties in climate policy and shifting political sentiment, companies are demonstrating resilience in their carbon strategies with demand for carbon credits holding up. This underscores the crucial role carbon markets play in enabling businesses to meet their net-zero commitments, even against the backdrop of a polarising macro environment"

Allister Furey, CEO at Sylvera

ABOUT APOLOWNIA

Apolownia is a mission-driven company committed to making a significant impact in the climate sector.  

We support businesses and funds willing to engage in long-term and impactful decarbonization strategies - within and beyond their own value chain - by designing, implementing and monitoring science-based carbon reduction projects that restore natural ecosystems.

Through technology and innovative solutions, we aim at shaping a resilient and environmentally friendly world, by encouraging the decarbonization of the economy and supporting social and environmental initiatives.

You can drive positive change for the climate, biodiversity and local communities.

Sources: