Voluntary Carbon Markets Necessary for Climate Mitigation: 2024 Market Analysis Shows

The 2025 State of the Voluntary Carbon Market (VCM) report, published by Ecosystem Marketplace, reveals a market undergoing profound transformation. While overall transaction volumes declined by 25% and the average credit price fell by 5.5% in 2024, these figures mask an underlying stabilization and a shift toward higher-quality, integrity-focused carbon credits. The report captures the early effects of the Integrity Council for the Voluntary Carbon Market (ICVCM)'s Core Carbon Principles CCPs), changing buyer preferences, and the evolving role of removals in the carbon market.

Why This Matters

• VCM Are A Must Have, Not a Nice to Have: For companies, governments, and investors trying to hit serious climate goals, the VCM isn’t just a “nice to have”—it’s a vital tool.

• VCM Key to Net-Zero Commitments: In 2024, while fewer credits were bought and sold (84 million MtCO₂e vs. 112 million in 2023), the amount of credits actually retired—i.e., used to offset emissions—held steady at 182 million MtCO₂e. That means end-users are still committed.

• Shift to Quality: The shift away from quantity toward quality marks a healthy progression. Markets mature when people stop chasing the cheapest options and start demanding results. That’s what we’re seeing here. If the VCM is going to support long-term climate action, this is the path it needs to take.

Details

In 2024, the voluntary carbon market began to show signs of a deeper structural shift—one marked not just by numbers, but by values. While overall transaction volumes fell to 84 million metric tons of CO₂ equivalent (MtCO₂e), and average prices declined modestly, this apparent slowdown masked a more encouraging development: the market is maturing. Buyers are no longer just purchasing credits for volume. Instead, they are gravitating toward projects that offer long-term environmental and social integrity. This is most evident in the rising demand for carbon removal credits, which traded at prices more than three times higher than traditional reduction credits. Projects like afforestation, mangrove restoration, and engineered solutions such as biochar are leading this transition, reflecting growing awareness that offsetting alone isn't enough—we also need to actively remove carbon from the atmosphere.

Another key theme throughout the year was the clear divide emerging between legacy credits and the next generation of climate solutions. Older renewable energy and forestry projects, particularly those that have been criticized for lack of additionality or poor monitoring, saw declines in both demand and value. Meanwhile, improved forest management (IFM) projects gained traction, offering a more nuanced and measurable approach to preserving carbon stocks. This shift in attention underscores a market increasingly defined by discernment and impact, rather than by tradition or price alone.

The Integrity Council for the Voluntary Carbon Market (ICVCM) played a pivotal role in this evolution. Its Core Carbon Principles (CCPs), introduced to establish higher standards for credit quality, started to influence buyer behavior in a noticeable way.

Credits approved under CCP-compliant methodologies—such as those issued by the American Carbon Registry (ACR) or the Climate Action Reserve (CAR)—began to fetch price premiums and gain share in sectors like waste and forestry. This was particularly evident in the waste disposal category, where landfill gas projects saw a 226% spike in volume, driven by new confidence in CCP-aligned crediting frameworks.

Interestingly, the agriculture sector presented a more complex picture. While transaction volume dropped significantly—down by 87%—the average price of agricultural credits actually increased by 18%. This suggests that although the market is cautious about credits in this space, it also sees strong future value in high-integrity, innovation-driven approaches, especially those that offer both climate and livelihood benefits.

The market’s gradual restructuring was also mirrored in the conversations at the 2025 VCM webinar by Ecosystem Marketplace. Panelists consistently returned to one central message: that the future of the VCM will hinge on trust, integrity, and impact.

There is a growing demand not just for carbon offsets, but for climate solutions that also serve communities, preserve ecosystems, and strengthen biodiversity. Project developers, marketplaces, and investors alike are starting to move toward this integrated approach. Panelists highlighted the growing recognition of community-based and nature-positive credits, with project developers and marketplaces aiming to link finance with high-integrity offsets.

Action Items

To navigate the evolving VCM, stakeholders should consider the following recommendations:

• Prioritize CCP Approved Projects: Prioritize purchase of CCP-approved or removal-based credits to meet future-proofed climate goals.

• Invest in MRV: Invest in MRV (Monitoring, Reporting, Verification) technologies to support transparency and integrity.

• Align Projects with Community and Environmental Benefits: Developers should align project design with community benefits and environmental safeguards.