Sale Insights: How the risk profile of the voluntary carbon market is changing

By Eduardo, Business Development Representative

Risk has always been part of the voluntary carbon market (VCM), but what’s changing is how that risk is being understood and managed. In conversations with buyers, investors, and project developers, I’m hearing less focus on single risk factors and more discussion around structure, transparency, and comparability.

Rather than risk disappearing, the market is developing clearer ways to assess it.

One of the biggest shifts is the increasing use of tools and structures that are already common in other commodity markets. Ratings agencies, offtake agreements, credit financing, and green bond structures are all playing a bigger role in the VCM.

These don’t remove risk entirely, but they do help reduce uncertainty for both investors and corporate buyers. Risk is becoming something that can be assessed, benchmarked, and priced, rather than something that’s difficult to define.

At the same time, the market is becoming more price-efficient. We’re seeing clearer price differentiation based on credit quality and integrity, with premiums emerging for credits such as CORSIA Phase 1 eligible credits, CCP-approved credits, and compliance-eligible credits. This pricing clarity provides more accurate signals around quality and risk.

Stronger projects, clearer standards, and growing country engagement

Another change I’m seeing is the increased sophistication of project developers. More projects are being run like established businesses, with teams that have a strong grasp of finance, risk, and return profiles. This makes it easier for buyers and investors to make informed decisions when comparing projects.

Newer methodologies are also contributing to this shift. More rigorous standards and monitoring, reporting, and verification (MRV) requirements are increasing confidence that projects will deliver the credits they state they will. While scrutiny remains high, stronger methodologies help reduce uncertainty around delivery.

At the country level, engagement with Article 6 is accelerating. Governments are gaining a better understanding of their nationally determined contributions (NDCs), Article 6 opportunities, and the implications for participation in the VCM.

There are still gaps, and challenges remain. Recent developments in Kenya, for example, highlight how evolving regulatory frameworks can introduce risk when expectations are not fully aligned. That said, the overall pace of engagement and learning at the country level has increased noticeably over the past 12 months.

From my perspective, the risk profile of the VCM is changing through greater structure, clearer pricing signals, more sophisticated project development, stronger methodologies, and increased country-level engagement.

Risk hasn’t gone away, but it is becoming easier to understand and manage. For many market participants, that shift is an important step in the continued maturation of the voluntary carbon market.

If you’d like to discuss how these shifts in the market might affect your organization, feel free to get in touch here