By Lars Kroijer and Anton Root, Co-Founders of AlliedOffsets
2025 has been an encouraging year for the voluntary carbon market, with several key trends giving reason for optimism about the market’s growth and maturity.
One of the most notable shifts has been the growing awareness of greenwashing and reputational risks. Media scrutiny is increasingly influencing the design and launch of new projects, with developers more mindful that their work will be examined by external stakeholders. This heightened awareness is encouraging higher standards and more rigorous approaches across the market, something that was far less evident just a few years ago.
At the same time, compliance frameworks continue to expand globally, with many already accepting, or expected to accept, voluntary credits. While the future of mechanisms such as Article 6 remains uncertain, developments at this level are already filtering down to project-level practices, influencing how projects are structured and financed. Although some approvals may appear inconsistent and carry reputational risks, the influx of capital into the space remains a positive signal, supporting new projects and overall market growth.
Investor and developer appetite has also remained strong. There is clear interest in setting up and funding new projects, often through innovative fund structures. This continued inflow of capital and energy into the market is another encouraging sign for long-term development.
These structural trends helped support a return to growth in 2025, though the market remains on shaky footing as it heads into the new year. Retired credits exceeded 2024 levels, record offtakes pushed market value above $10B for the first time since AlliedOffsets began tracking the VCM in 2020, and prices saw an uptick after a two-year slump. Given the pessimistic mood at the start of the year, these signals of recovery will be welcome.
Several specific areas stood out. Superpollutant projects had a strong year, with increased awareness, pricing, and demand, partly driven by CCP labelling. CDR also saw more credits purchased than ever before via offtakes. With Article 6 moving closer to implementation, VCM projects are closer than ever to unlocking large volumes of demand from countries and compliance mechanisms, even if eligible supply has emerged more slowly than some expected.
That said, the picture is not all rosy. CDR investment slowed in 2025 and continues to be supported by a single major buyer. Growth in SBTi commitments slowed, the number of buyers remained flat, and despite some recovery, credit prices remain too low.
Still, 2025 marked a year of resilience for the voluntary carbon market. After restructuring, retooling, and learning from past mistakes, the market enters the new year with something that has been largely absent in recent times: cautious optimism that the worst may finally be behind us.
For those interested in the data behind these reflections, it can be found here