Carbon Markets 2025: Review and Outlook

Supply pulled back, demand proved resilient, and the gap between high- and low-quality credits widened as buyers increasingly used quality labels, ratings, and vintages to guide sourcing decisions. At the same time, clearer policy signals –  from domestic carbon pricing to CORSIA and Article 6 – began to translate into real demand, further contributing to price differentiation.

Our latest Carbon Market Review and Outlook explores these trends and unpacks what these shifts mean for market confidence, pricing dynamics, and the path ahead as we move toward 2026.

Leading headlines include:

Supply contracts while demand remains resilient

• Carbon credit issuances fell 9% from 2024 to 2025, and were increasingly skewed toward newer vintages (four years or less), reflecting buyers’ use of vintage as a proxy for credit quality.
• But retirements held firm at 174 million tonnes, underscoring resilient underlying demand and slowing the accumulation of surplus supply.

Quality and ratings drive price differentiation

• Prices for higher-quality credits increased in selected segments, highlighting the growing role of carbon credit ratings and the Core Carbon Principles label in driving market differentiation.

Policy signals impact demand

• The expansion of domestic carbon pricing schemes, alongside demand emerging under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), drove an increase in regulated buying.
• At the same time, uncertainty around the medium-term demand outlook, the pace of host-country authorisations, and geopolitical alignment – including the role of the United States – underscored persistent macro-level risks.

The Article 6 project pipeline grows

• 24 new bilateral agreements were signed, and 20 projects successfully transitioned to the Paris Agreement Crediting Mechanism. The first Article 6.4 methodology was approved, marking an important operational milestone.
• Forward purchases of Internationally Transferred Mitigation Outcomes gathered pace, with the first deliveries of African credits realised through the KliK Foundation’s sourcing.
• Discussion around the potential use of Article 6 credits progressed in the context of carbon border adjustment mechanisms (CBAM) and long-term national climate targets, including the European Union’s 2040 climate strategy.

Read the full report. The data presented in this report is powered by the Climate Focus Carbon Markets Dashboard. If you would like to receive monthly updates on the Carbon Market Dashboard, please email us at dashboard@climatefocus.com.