Key Takeaways
- 1Voluntary carbon market expanded 22% YoY to $2.8B
- 2Premium credits trade at $25-45/tCO2e vs $3-8 for legacy
- 3India's CCTS generated 12M credits in its first year
- 4Market projected to reach $5.2B by 2028
Market Size & Growth Trajectory
The voluntary carbon market expanded 22% year-over-year to $2.8 billion in total transaction value during 2025. This growth was driven by a combination of corporate net-zero commitments reaching their first interim milestones, increased institutional participation through carbon credit ETFs and structured products, and the operationalisation of Article 6.4 of the Paris Agreement which established a credible international framework for cross-border credit transfers.
Quality Premium Emerges
A significant pricing bifurcation has emerged between high-integrity credits (verified under Verra VCS, Gold Standard, or Article 6.4 mechanisms) and legacy credits with questionable additionality. Premium credits from nature-based removal projects now trade at $25-45/tCO2e, while older avoidance credits have declined to $3-8/tCO2e.
The Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles have become the de facto quality benchmark, with 78% of institutional buyers requiring CCP compliance.
“78% of institutional buyers now require ICVCM Core Carbon Principles compliance.”
Regional Hotspots
Sub-Saharan Africa and Southeast Asia have emerged as the fastest-growing credit origination regions, driven by large-scale reforestation, mangrove restoration, and clean cooking projects.
India's domestic carbon market, launched in 2025 under the Carbon Credit Trading Scheme (CCTS), has generated 12 million credits in its first year, primarily from renewable energy and energy efficiency projects. China's national ETS expanded to cover the cement and aluminium sectors, adding 800 million tonnes of annual covered emissions.
Outlook for 2026-2028
MindEarth projects the voluntary carbon market will reach $5.2 billion by 2028, driven by tightening corporate climate commitments, regulatory integration of voluntary credits into compliance frameworks, and the scaling of engineered carbon removal technologies including direct air capture (DAC) and enhanced rock weathering.
Key risks include regulatory fragmentation, greenwashing litigation, and supply constraints for high-integrity removal credits.
