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“…Human subtlety… will never devise an invention more beautiful, more simple or more direct than does nature, because in her inventions nothing is lacking, and nothing is superfluous…”

Leonardo da Vinci

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The voluntary carbon market (VCM) has passed its inflection point. The volatility that characterized 2023 and 2024 has settled into a stark, data-driven reality: the market has bifurcated. As we look toward 2026, corporate leaders face two distinct markets. One is a liquid, low-price market of legacy credits facing increasing obsolescence. The other is a constrained, high-value market of high-quality assets. Specifically within Nature-Based Solutions (NBS), where demand is beginning to structurally outstrip supply.

For the capital-intensive, risk-averse organization, the strategy for 2026 cannot rely on the spot market procurement tactics of the past decade. The data from 2025 indicates that securing access to high-quality NBS is no longer just a corporate social responsibility objective; it is a balance sheet imperative driven by regulatory convergence and the tangible risk of stranded assets.

 

The End of Uniformity: The Quality Premium Widens

The most critical signal for your 2026 strategy is the decoupling of credit prices based on integrity.

In 2025, while total credit retirements marginally declined by 4.5% to 168 million tonnes, the primary market value actually grew by over 6% to $1.04 billion. This counter-intuitive dynamic—lower volume, higher value—proves that buyers are actively discarding low-quality inventory in favor of fewer, higher-quality assets.

This “flight to quality” has created a substantial price premium. In previous years, the spread between high and low-rated credits was negligible. By mid-2025, MSCI reported that credits rated ‘BBB’ and above were trading at a premium of approximately 360% over lower-rated credits. Specifically within NBS, Afforestation, Reforestation, and Revegetation (ARR) projects rated ‘BBB+’ averaged $26.10 per tonne, while their lower-rated counterparts (‘BB-‘ and below) languished at $14.50.

For the CFO, this presents a clear heuristic: the “cheap” option carries a hidden cost. Low-quality credits now face a high probability of becoming stranded assets. Credits that are technically issued but unusable for credible net-zero claims or compliance obligations due to reputational toxicity or regulatory exclusion.

 

The Supply Crunch in High-Quality NBS

As your organization forecasts its procurement needs for 2026, you must account for a deepening supply deficit in the specific assets you likely desire. While the overall market holds a surplus of legacy credits, the inventory of high-quality credits is shrinking.

For the third consecutive year, highly-rated credits (BBB+) experienced a market deficit in 2025, meaning retirements (consumption) exceeded new issuances. This scarcity is acute in Nature-Based Solutions. While forestry and land use, accounting for 68 million tonnes in 2024, remain the most frequently retired project category, the composition of that supply is changing.

Buyers are aggressively shifting away from legacy REDD+ (avoided deforestation) projects toward removal-based NBS, such as ARR and Improved Forest Management (IFM). In 2025, transaction volumes for IFM projects grew over 300%, while legacy REDD+ volumes fell by 52%.

The implication for your 2026 planning is scarcity. The lead time for new high-quality NBS projects to come online is significant. Consequently, we are witnessing a surge in early-stage offtake agreements. In 2025, the value of announced offtake deals totaled $12.25 billion… a massive leap from $3.95 billion in 2024. Sophisticated buyers, including major energy and technology firms, are locking in future supply at weighted average prices of $160 per credit for durable removals, effectively bypassing the spot market entirely.

 

Regulatory Convergence: The Compliance Floor

The distinction between “voluntary” and “compliance” markets is eroding, and this convergence will be a primary price driver in 2026. Regulatory bodies are increasingly creating a floor for credit quality that impacts voluntary buyers.

Two mechanisms are driving this shift:

1. CORSIA Phase 1

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) has entered its first mandatory compliance phase (2024–2026). The International Civil Aviation Organization (ICAO) has tightened eligibility, creating a “compliance-grade” stamp of approval. Sylvera modeling suggests that compliance demand could exceed voluntary demand as early as 2027, largely driven by the approaching CORSIA Phase 1 deadline. This will create direct competition for high-integrity credits between voluntary corporate buyers and regulated aviation entities, inevitably driving up price floors for eligible NBS credits.

2. Article 6 and Corresponding Adjustments

The operationalization of Article 6 of the Paris Agreement is accelerating. As of late 2025, 176 bilateral agreements were in place under Article 6.2. This mechanism allows countries to transfer carbon credits (Internationally Transferred Mitigation Outcomes, or ITMOs) to one another.

For corporate buyers, the critical development for 2026 is the “Corresponding Adjustment” (CA). A CA ensures that when a credit is sold abroad, the host country deducts it from its own national inventory, preventing double-counting. We project that credits with a CA will command a distinct premium and may become a requirement for companies making specific claims under the Paris Agreement framework. With countries like Singapore and Japan already executing trades, the infrastructure for this high-compliance market is solidifying.

3. The Role of Independent Assurance

In an environment of rising prices and regulatory complexity, “trust” is a risk management tool. Reliance on project developer marketing materials is insufficient for audit committees and risk officers.

The rise of independent rating agencies such as MSCI, Sylvera, Calyx Global, and BeZero, has fundamentally altered the due diligence landscape. These agencies now cover the majority of the market; Calyx Global’s ratings alone cover 70% of all retirements from 2021 to 2024.

Data indicates that utilizing these ratings is becoming a prerequisite for transaction security. Buyers are increasingly writing clauses into offtake agreements that allow them to exit the contract if a project’s third-party rating drops below a certain threshold (e.g., ‘BBB’). For 2026, we advise integrating independent ratings data directly into your procurement workflows to mitigate delivery and reputational risk.

 

Strategic Outlook for 2026

Based on the current trajectory, the role of Nature-Based Solutions in 2026 will be defined by three core realities:

  1. NBS as a Removal Mechanism: The market will continue to prize “removals” (sequestering carbon) over “avoidance” (preventing emissions). In 2024, removal credits commanded a 381% price premium over reduction credits, up from 245% the previous year. Corporations with net-zero targets must prioritize ARR and IFM projects to align with the Science Based Targets initiative (SBTi) guidance on residual emissions.
  2. Co-Benefits as Value Drivers: Buyers are no longer paying solely for the carbon molecule. They are paying for the verified impact on biodiversity and local communities. Projects with quantifiable co-benefits are achieving measurable price uplifts. In 2026, expect biodiversity monitoring to become a standard component of high-quality NBS due diligence.
  3. The Necessity of Long-Term Positions: The spot market for high-integrity NBS is thinning. If your organization waits to purchase 2026 vintage credits in 2026, you will likely face a restricted supply of “leftover” inventory at inflated prices. The $12 billion surge in offtakes signals that your peers are moving upstream to finance project development directly.
 

Recommendations for the C-Suite

To navigate the 2026 carbon market landscape effectively, we recommend the following actions:

  • Audit Your Inventory: Assess your current holdings against independent ratings. Identify assets at risk of becoming “stranded” due to low integrity scores or lack of alignment with Core Carbon Principles (CCPs).
  • Pivot to Offtakes: Move from spot purchasing to multi-year offtake agreements for high-quality ARR and IFM projects. This hedges against future price spikes and secures supply.
  • Integrate Compliance Standards: Even if your purchasing is voluntary, align your quality thresholds with CORSIA Phase 1 or Article 6 requirements to future-proof your investments against regulatory creep.
  • Demand Data: Require independent ratings and granular monitoring data (MRV) for all prospective NBS investments. Do not rely on issuer claims alone.

The era of cheap, opaque carbon credits is effectively over. The market of 2026 offers clarity and impact, but only for those willing to invest in integrity.

 

About Carbon Credit Capital

For over 20 years, Carbon Credit Capital has guided global organizations through the complexities of sustainability strategy and carbon finance. To discuss how these 2026 forecasts impact your specific net-zero roadmap, or to analyze the integrity of your current portfolio, connect with our sustainability experts.

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Carbon Footprint

MRV and Additionality: The Two Questions Your Auditor Will Ask First

Published

2 days ago

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September 16, 2026

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What auditors actually test, where projects actually fail, and the contract clauses that protect you before signature.

The meeting happens about fourteen months after the contract was signed. Your assurance provider has reached the nature-based investment line in your Scope 3 file, and the partner across the table has exactly two questions. How do you know the reductions happened? And how do you know they would not have happened anyway?

The first question is MRV: measurement, reporting, and verification. The second is additionality. Between them, they decide whether your nature-based investment counts, in your inventory, in your disclosure, and in front of your board. Everything else in the project documentation is supporting material for these two answers.

This article walks through what each question actually tests, where projects most commonly fail, what digital MRV has changed (and what it has not), and the contract clauses that protect you. The goal is to give you the diligence framework before you sign, because after the credit issues is the wrong time to discover the answers were weak.

What MRV actually verifies

MRV is the machinery that turns a field intervention into a defensible number. Measurement covers the data: biomass surveys, soil sampling, remote sensing, activity records from participating farms. Reporting covers the translation of that data into claimed reductions under a recognised methodology. Verification covers the independent check: an accredited third party tests the reporting against the methodology and the evidence.

The methodologies live in registries. Verra’s Verified Carbon Standard and the Gold Standard are the two largest for nature-based projects, and each publishes the methodology documents, monitoring requirements, and verification protocols that a project must follow. The ICVCM Assessment Framework now sits above the registries, assessing whole methodologies against the Core Carbon Principles and granting the CCP label to those that pass.

For a buyer, the practical questions are concrete. What is the monitoring frequency, and is it specified in the project design document or left vague? Who is the verifier, how were they selected, and how often do they rotate? What raw data do you, the buyer, get access to, and in what format? A project that answers these in writing is a different procurement than one that answers them in a sales call.

What additionality actually proves

Additionality asks whether the intervention caused the reduction, or whether the reduction would have happened anyway. The test is a counterfactual: what would this landscape, this farm, this forest have done without the project’s money?

Three forms matter in practice. Financial additionality asks whether the project needed the carbon revenue to proceed. Regulatory additionality asks whether the activity was already required by law. Common-practice additionality asks whether the activity is already standard in the region, in which case paying for it buys you nothing the world was not getting for free.

The reason additionality dominates audit conversations is recent history. Research published in 2023, including the Science paper examined at length in our piece on conventional offsets and boardroom credibility, found that a large share of REDD+ credits failed the counterfactual test because baselines were inflated. The market response was a wave of methodology revisions at Verra and the arrival of independent ratings agencies whose entire business is re-testing additionality claims. The Carbon Credit Quality Initiative publishes transparent scoring of methodologies on exactly this dimension, and it is free to consult before you sign anything.

Where projects most commonly fail the test

Five failure modes account for most of the wreckage.

  • Inflated baselines. The counterfactual assumes more deforestation, more degradation, or lower yields than the evidence supports. The claimed reduction is the gap between reality and the baseline, so an inflated baseline manufactures reductions from nothing.
  • Unaccounted leakage. The project protects one forest and the logging moves to the next valley. The methodology is supposed to net this out; weak projects estimate it optimistically.
  • Thin permanence protection. Nature-based carbon can reverse: fire, pest, drought, or a change of landowner. Buffer pools and insurance mechanisms exist for this, but their adequacy varies enormously between projects.
  • Attribution and double counting. In supply chain settings, the same reduction can be claimed by the supplier, the buyer, and a credit purchaser unless contracts prevent it. Our Insetting vs Offsetting piece covers the inventory rules; the point here is that the auditor will ask who else is counting this tonne.
  • Stale monitoring. Data collected at validation and never refreshed. The IPCC AR6 Working Group III land-sector chapter documents how quickly carbon stocks respond to disturbance; a three-year-old measurement is a historical artifact, not a current claim.

What digital MRV changes, and what it does not

Digital MRV is the genuine improvement in the field. Satellite remote sensing, including the free archives at NASA Earthdata, allows biomass and land-cover change to be monitored continuously rather than at multi-year verification intervals. Soil carbon models calibrated with physical sampling reduce the cost of agricultural measurement. The practical effect is more frequent data at lower cost, which compresses the window in which a problem can hide.

What digital MRV does not change is judgment. Baselines are still human decisions about counterfactuals. Additionality is still an argument, not a measurement. Research groups such as the Oxford Smith School have been clear on this point: better sensors improve the M in MRV, but the integrity questions live in the assumptions, and assumptions need governance, not gadgets.

For a buyer, the test is simple. Ask the provider what is measured by instrument, what is estimated by model, and what is assumed by methodology. A provider who can answer that question crisply understands their own evidence chain. A provider who cannot is selling you their confidence rather than their data.

What to require in your contract

The diligence above converts into five contract clauses.

  • Monitoring cadence and buyer data access, specified by dataset and frequency.
  • Verifier independence, named accreditation, and rotation terms.
  • Baseline revision triggers, so the counterfactual updates when the methodology or the evidence changes.
  • Reversal liability and buffer adequacy, with the mechanism named and sized.
  • Documentation handover in audit-ready form, so the evidence file your assurance provider needs already exists.

None of these clauses is exotic. All of them are absent from weak contracts, and their absence is the most reliable early signal that the MRV and additionality answers will be weak too.

If you are evaluating a nature-based investment and want the MRV and additionality stress-tested before signature rather than after, the carbon and sustainability experts at Carbon Credit Capital can run that review against any project on your shortlist, and design nature-based supply chain investments where the evidence chain is built audit-first. Schedule a consultation.

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Carbon Footprint

The EU’s New Green Claims Rules and Carbon Credits

Published

2 days ago

on

September 15, 2026

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EU Directive: Empowering Consumers for the Green Transition (ECGT)

The EU Directive, Empowering Consumers for the Green Transition (ECGT), takes effect on September 27, 2026.(1) The goal of ECGT is to protect consumers by ensuring that environmental claims are fair, understandable, and reliable. This regulation does create a new compliance requirement for businesses, but it also provides sustainability and marketing teams with important guidance that helps create consistency in sustainability communications.

Key takeaways

  • ECGT takes effect September 27, 2026, and prohibits claims that a product or service has a neutral, reduced, or positive environmental impact based on offsetting alone.
  • Named example phrases the regulation prohibits include climate neutral, CO2 neutral certified, carbon positive, climate net zero, climate compensated, reduced climate impact, and limited CO2 footprint.
  • ECGT does not want to deter investment in carbon credits. It wants companies to communicate the real benefits of the projects they support instead.
  • SBTi’s guidance recommends framing carbon credits as taking responsibility for ongoing emissions, not as making a product or company neutral.
  • Voluntary carbon projects deliver real climate progress: reducing super-pollutants, protecting and restoring ecosystems, and supporting communities.

Regarding carbon credits specifically, voluntary carbon projects deliver important climate progress and environmental benefits that provide many talking points for companies. They reduce climate super-pollutants by removing industrial emissions like methane, N2O, HFCs and others. They protect and restore valuable ecosystems and carbon sinks like forests, mangroves and grasslands. They help communities by reducing local pollution, creating employment opportunities, improving access to healthcare, and more.

The Science Based Targets Initiative (SBTi), a global leader in business climate action, concludes that alongside aggressive decarbonization, we should also use high quality carbon credits to take responsibility for our ongoing emissions. SBTi recognizes that carbon credits are important “to help limit temperature overshoot, mitigate transition risks, and support climate solutions.”(2)

ECGT language on carbon offsetting says that they do not want to deter investment in carbon credits. They just want companies to focus on communicating the benefits of the projects they support and avoid claims beyond the scope of carbon credits, which is good for everyone, companies and consumers alike.

The regulation reinforces that carbon credits do not change the sustainability of your products, so carbon credit buyers should not suggest that their products are more sustainable because of carbon credits. Instead, companies need to promote their climate contributions as a way to compensate or take responsibility for their carbon emissions by supporting projects that do great things like reducing global carbon emissions, reducing pollution, preventing deforestation, restoring forests, and more.

ECGT language related to carbon offsetting

The regulation is particularly focused on prohibiting claims, based on offsetting greenhouse gas emissions, that a product or service has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions. These claims are prohibited in all circumstances because they mislead consumers into believing the claim relates to the product itself, or to how it was made and supplied, or into thinking that using the product carries no environmental impact at all.

Named examples of prohibited claims include:

  • climate neutral
  • CO2 neutral certified
  • carbon positive
  • climate net zero
  • climate compensated
  • reduced climate impact
  • limited CO2 footprint

These claims are only allowed when they rest on a product’s actual lifecycle impact, not on offsetting emissions outside that product’s value chain, since the two are not equivalent. This prohibition does not stop companies from advertising their investments in environmental initiatives, including carbon credit projects, as long as they present that information in a way that is not misleading and that meets the other requirements of Union law.(1)

SBTi also provides guidance on climate contribution language in its Corporate Net Zero Standard Version 2.0 Draft for Second Public Consultation, November 2025. While the SBTi language is fairly technical, it has a good framework for crafting a climate contribution message.

SBTi Language for Carbon Credits(3)

  • Take responsibility for ongoing emissions by delivering mitigation impact contributions
  • Carbon credits certify the mitigation outcomes of projects that reduce, avoid, or remove carbon emissions
  • Activities that reduce emissions from emission sources not located within the company’s value chain
  • Activities that conserve, protect, and enhance natural carbon sinks
  • Activities that capture and store carbon in storage pools

SBTi’s draft standard also walks through sample claim language for this kind of contribution. In general, the samples move from a simple percentage statement, to naming a specific verified tonnage tied to that percentage, to a fuller statement that breaks the tonnage into reductions versus removals. Across all three, the framing stays consistent: a company took responsibility for a defined share of its ongoing emissions over a set period, by funding a specific, verified amount of mitigation, achieved through emission reductions or removals.(3)

FAQ: ECGT and Carbon Credit Claims

When does the ECGT directive take effect?

The rules apply across the EU from September 27, 2026, after member states transposed the directive into national law by March 27, 2026.

Does ECGT ban carbon offsetting?

No. It bans specific marketing claims that a product or service is environmentally neutral, reduced impact, or positive based on offsetting. Advertising investment in carbon credit projects themselves is still allowed if it is not misleading.

What phrases does ECGT specifically prohibit?

Named examples include climate neutral, CO2 neutral certified, carbon positive, climate net zero, climate compensated, reduced climate impact, and limited CO2 footprint, when those claims are based on offsetting rather than a product’s actual lifecycle impact.

How should a company describe its carbon credit purchases instead?

SBTi’s guidance recommends stating the specific verified tonnage of emissions reductions or removals funded and describing that as taking responsibility for a defined share of ongoing emissions, rather than claiming the company or product is neutral.

Does this rule apply to company level sustainability claims too?

ECGT is focused on claims about specific products and services in consumer marketing. Broader company level sustainability communication is a separate matter still governed by other existing rules.

While ECGT does add a new compliance burden for businesses, it helps create consistency in sustainability messaging that is important to building confidence in voluntary carbon projects and scaling the industry to help us achieve progress on global carbon emissions.

Disclaimer: Terrapass does not provide legal or regulatory advice. Any interpretation of regulation must be approved by your legal representative.

References:
(1) https://eur-lex.europa.eu/eli/dir/2024/825/oj
(2) https://files.sciencebasedtargets.org/production/files/Corporate-Net-Zero-Standard-version-2.pdf
(3) https://files.sciencebasedtargets.org/production/files/CNZS-V2-Second-Consultation-Draft.pdf

The post The EU’s New Green Claims Rules and Carbon Credits appeared first on Terrapass.

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Carbon Footprint

Want a simpler way to buy carbon credits? Discover our carbon marketplace

Published

2 weeks ago

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September 2, 2026

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Want a simpler way to buy carbon credits? Discover our carbon marketplace

Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.

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