Connect with us

Published

2 years ago

on

New Rules: How to Implement and Communicate Climate Strategy for Companies

2023 was a big year for climate action.  We saw major announcements of new global governance and regulations across the world:    

At Terrapass, we’re excited by these developments.  The world recognizes the need to significantly scale all climate solutions including voluntary carbon markets.  For this we must have globally aligned standards. This came together on multiple fronts in 2023. 

So, what does this mean for sustainability professionals and everyday consumers? 

For everyday consumers this is great news.  These regulations ensure that any climate accomplishments promoted by a business will be supported with details that clearly show how those claims were achieved. The rules also ensure that companies are actively working to reduce their own carbon emissions in addition to offsetting their remaining emissions.  Please visit Terrapass for more information about your personal or small business carbon footprint.  

For sustainability professionals the list of new rules and regulations might seem daunting, but it is also good news.  This is a sign of a maturing industry.  Policy and consumer experts are contributing their expertise to help make climate action impactful and understandable to both sustainability professionals and everyday customers. 

Historically, professional sustainability terms like carbon neutral and net-zero often made their way into marketing and product messaging.  Consumer advocates rightly recognized that everyday customers can’t evaluate these phrases on their own.  Additionally, vague phrases like green, eco, and sustainable are often used to promote sustainability without any supporting information.  Consumer advocates also recognized that customers must be able to see why a product is green.  These new regulations in California and Europe ensure that climate communications are always factual and transparent.  They ensure that companies can promote their sustainability accomplishments with confidence and that customers have information to evaluate those accomplishments. 

New global governance, VCMI in particular, ensures that companies apply sustainability solutions in the most effective way.  Terrapass has long promoted the principle of 1. Calculate, 2. Conserve, and 3. Offset in our sustainability guidance to customers.  This approach prioritizes: 

  • First, understand where carbon emissions are in your business,  
  • Second, disclose your plan to reduce the carbon emissions of your business and regularly report progress, and  
  • Third, balance your remaining emissions with carbon credits that fund global emission reduction projects.

When companies describe their climate strategy, they sometimes combine these different elements into one term like “carbon neutral.”  Phrases like this do reflect an important environmental achievement.  However, they hide the distinction between your company’s emission reductions vs. global emission reductions funded through carbon credits.  Emission reduction and offsetting must be separate elements of your sustainability strategy and they should also be separate elements of your climate communications.  Key elements for your climate communications include: 

Steps and priorities: 

  1. Measure your carbon emissions, reduce emissions on a science-based trajectory, and disclose your progress publicly. 
  2. Address your remaining emissions by funding high-quality carbon credits that help reduce greenhouse gases globally.  

Tell two different stories in your climate communications: 

  1. Business Emission Reduction:  Our carbon footprint was 5,000 mT in 2023, a reduction of 500 mT vs. 2021 and 5% ahead of plan. 
  2. Global Climate Contribution:  We purchased 5,000 mT of carbon credits in 2023 to fund global carbon reductions equal to our remaining emissions.  

Other considerations:  

  • Climate communications should be factual, specific and detailed; provide evidence of all environmental claims made. 
  • Talk about carbon credits as a way to balance your remaining emissions by funding global carbon reduction. 
  • Talk about carbon credits as a way to support other global sustainability goals (UN SDGs) when applicable. 
  • Avoid using vague, generic terms like green, eco, climate friendly, sustainable, etc. that are not substantiated. 
  • Avoid terms that combine your company’s emission reduction and carbon offsetting into one phrase like carbon neutral, climate neutral, etc. 

Highlights from each of the new rules and regulations are provided below.  Please contact a Terrapass sustainability advisor to help your company navigate its specific needs. 

California SB-253 Climate Corporate Data Accountability Act 

  • For entities with total annual revenues in excess of $1,000,000,000 that do business in California: 
    • Starting in 2026:  Report Scope 1 and Scope 2 greenhouse gas emissions 
    • Starting in 2027:  Report Scope 3 greenhouse gas emissions 
    • Other requirements: 
      • For the reporting entity’s prior fiscal year 
      • Reporting is due annually on a date to be determined by the state board. 
      • Reporting follows the Greenhouse Gas Protocol 
      • Reporting entity must obtain an assurance engagement, performed by an independent third-party assurance provider, of the entity’s public disclosure as provided. 

California AB-1305 Voluntary Carbon Market Disclosures 

  • Entities operating in California and making climate-related claims:
    • Must publicly disclose information documenting how the claim was determined to be accurate or accomplished, and the measurement of interim progress.
    • Applies to claims of net-zero emissions, carbon neutrality or similar, as well as claims of significant reductions in greenhouse gas (“GHG”) emissions,
  • Entities operating in California and using voluntary carbon credits to support a climate-related claim.
    • Must publicly disclose detailed information related to the credits purchased, the underlying offset projects and any independent verification of the climate-related claims made. 

EU Green Claims Directive 

  • Applies to EU companies and non-EU companies making environmental claims aimed at EU consumers.   
  • Aims to eliminate greenwashing across EU markets by setting out detailed rules for how companies should market their environmental impacts and performance.  It targets “vague, misleading or unfounded information on products’ environmental characteristics. “ 
  • The current list of commercial practices that are banned in the EU is updated to include generic environmental claims – such as ‘environmentally friendly’, ‘natural’, ‘biodegradable’, ‘climate neutral’ or ‘eco’ – unless they can be properly evidenced. 
  • On the use of carbon credits specifically, the Green Claims Directive allows companies to make “carbon neutral” claims supported by carbon credits, but only if the carbon credits are disclosed correctly:  
    • Clearly state that carbon credits are being used to offset emissions. 
    • Disclose sources of emissions and amounts addressed with carbon credits. 
    • Identify carbon offset project types and distinguish between Reduction and removal offsets (requested, not required) 

ICVCM (The Integrity Council for the Voluntary Carbon Market) 

  • New global quality standards for voluntary carbon credit projects; “regulatory-like” 
  • Program will be fully implemented over the course of 2023-2024. 
    • Rules for each carbon credit Category (Methodology/Project Type) were released in June 2023 
    • CCP-Eligible Programs (Registries) and CCP-Approved Categories (Project Types) will be announced in 2024. 
  • Not a one-time rule, standards will continuously evolve. 
    • First revision process for the CCPs in 2025, aimed at implementation starting in 2026. 
  • ICVCM points to VCMI for guidance on how businesses should use carbon credits. 

VCMI (The Voluntary Carbon Markets Integrity Initiative) 

  • VCMI was established in 2021 to help ensure that voluntary carbon markets make a significant, measurable, and positive contribution to achieving the Paris Agreement goals. 
  • The VCMI Claims Code addresses market integrity on the demand side by guiding companies on:  
    • How they can credibly make voluntary use of carbon credits as part of their climate commitments, and  
    • The associated claims they can make regarding the use of those credits. 
  • The VCMI program should be followed together with ICVCM rules for high-integrity carbon credits. 

Note: The above article provides introductory information only. Every organization must independently evaluate these rules and regulations, and determine specific actions needed for its own compliance. 

Brought to you by terrapass.com
Written by Sam Tellen
Images per Copyright free

The post New Rules Tell Companies How to Implement and Communicate Climate Strategy  appeared first on Terrapass.

Related Topics:
Continue Reading

Carbon Footprint

Indigo Carbon Surpasses 2 Million Soil Carbon Credits in Landmark 1.1 Million Issuance

Published

8 hours ago

on

February 26, 2026

By

Indigo Carbon Surpasses 2 Million Soil Carbon Credits in Landmark 1.1 Million Issuance

Indigo Carbon announced it has now passed 2 million metric tons of verified climate impact from U.S. croplands. The company reached the milestone after issuing its fifth U.S. “carbon crop.” The new issuance includes 1.1 million independently verified carbon credits issued through the Climate Action Reserve (CAR).

Indigo describes the milestone in its announcement as a sign that soil-based carbon programs can scale. It also points to rising corporate demand for credits that meet stricter quality rules.

Indigo’s latest issuance is important because it is linked to a major registry method that now carries an additional integrity label. Max DuBuisson, Head of Impact & Integrity, Indigo, remarked:

“Indigo continues to set the standard for high-integrity soil carbon removals that corporate buyers can trust. Soil carbon is uniquely positioned to scale as a climate solution because it captures and stores carbon while also improving water conservation and crop resilience. By combining world-class science and technology with farmer-driven practice change, we’re proving that agricultural soil carbon is an immediate, durable, high-integrity solution capable of helping global companies meet their climate commitments.”

Inside the 1.1M Credit Issuance and CCP Label

Indigo says its fifth issuance includes 1.1 million carbon credits verified and issued through CAR. These credits come from Indigo’s U.S. soil carbon project, listed on the Climate Action Reserve under the Soil Enrichment Protocol (SEP) Version 1.1.

CAR’s SEP is designed to quantify and verify farm practices that increase soil carbon and reduce net emissions. It covers changes in soil carbon storage and also includes reductions in certain greenhouse gases tied to farm management.

CAR’s SEP Version 1.1 has the ICVCM Core Carbon Principles (CCP) label. This means the method meets the standards set by the CCP framework.

ICVCM core carbon principles
Source: ICVCM

Indigo’s disclosures also describe long-term monitoring rules. The company reports that its U.S. project includes 100 years of project-level monitoring after credit issuance, in line with CAR requirements. This mix of independent verification, registry issuance, and long monitoring periods is central to the case Indigo makes for credit quality.

Breaking Down the 2 Million Ton Milestone

Indigo says its total verified impact now exceeds 2 million metric tons of carbon removals and reductions across U.S. croplands.

In carbon markets, one credit equals one metric ton of CO₂ equivalent. Indigo’s latest issuance is very large by soil carbon standards. It also builds on earlier “carbon crop” issuances.

Indigo’s project disclosures include a quantified impact figure for its U.S. project. The company reports 927,367 tCO₂e reduced or removed through Dec. 31, 2023, for the project listed as CAR1459.

Indigo Carbon impact by the numbers
Source: Indigo

Indigo announced it has saved 118 billion gallons of water. It has also paid farmers $40 million through its programs so far. These points matter because many buyers now look beyond carbon totals. They also want evidence of farmer payments, monitoring rules, and co-benefits like water conservation.

Corporate Demand Shifts Toward Verified Removals

One reason soil carbon is getting more attention is the growing demand from buyers for removals. Many companies now focus more on carbon removal credits, not only avoidance credits.

Indigo’s largest recent buyer example is Microsoft. In January 2026, the carbon ag company announced a 12-year agreement under which Microsoft will purchase 2.85 million soil carbon removal credits from them.

  • The soil carbon producer said this is Microsoft’s third transaction with the company, following purchases of 40,000 tonnes in 2024 and 60,000 tonnes in 2025.

The tech giant’s purchases show how corporate buyers may use long-term offtake deals to secure future supply of credits. This matters for soil carbon programs because credits are typically generated over multiple years. And they also depend on practice changes and verification cycles.

Indigo also says its program works across eight million acres, which signals how it is trying to scale participation across U.S. farms.

Soil Carbon Credits: Market Trends and Forecast

Soil carbon credits are gaining attention as buyers shift toward higher-quality credits and clearer verification rules. Ecosystem Marketplace reports that the voluntary carbon market is entering a new phase. This phase emphasizes integrity, even though trading activity has slowed down.

In its 2025 market update, Ecosystem Marketplace noted a 25% drop in transaction volumes. This decline shows lower liquidity as buyers are becoming more selective.

Voluntary carbon credit market; price, volume, value 2022-2024

At the same time, demand for higher-quality credits is rising. Sylvera’s State of Carbon Credits 2025 reported that retirements dropped to 168 million credits in 2025, a 4.5% decrease.

Still, the market value climbed to US$1.04 billion due to rising prices. It also found that higher-rated credits (BBB+) made up 31% of retirements, and traded at higher average prices than lower-rated supply.

For soil carbon, buyers are also watching methodology quality. The ICVCM has approved two sustainable agriculture methods as CCP-approved. These are the Climate Action Reserve’s Soil Enrichment Protocol v1.1 and Verra’s VM0042. This can support stronger buyer confidence and may increase demand for soil credits that meet CCP rules.

Looking ahead, Sylvera projects compliance-linked demand will keep growing and could exceed voluntary demand by 2027. That trend may favor credits with stronger verification and compliance alignment, including higher-integrity soil carbon credits. However, integrity issues still occur, and this is where Indigo comes in.

Tackling Permanence and MRV Head-On

Soil carbon credits face a key challenge: carbon stored in soil can be reversed. A drought, land use change, or a shift in farm practices can reduce stored carbon.

This is why monitoring and reversal rules matter. CAR’s protocol is built to quantify, monitor, report, and verify practices that increase soil carbon storage.

Indigo’s project disclosure notes that projects are monitored for 100 years after they are issued. This shows the durability rules tied to their method and registry approach.

The company also positions its program as “outcome-based,” meaning it pays for verified carbon outcomes rather than paying only for adopting a practice. This messaging is designed to reassure buyers that credits are not only modeled. It stresses verification and the registry process.

A Scale Test for High-Integrity Soil Carbon

Indigo’s fifth issuance lands at a time when voluntary carbon markets are placing more weight on integrity labels and independent verification.

Two parts stand out:

  • First, volume. An issuance of 1.1 million credits through a registry is large for an agricultural soil carbon program.
  • Second, method approval. CAR’s SEP Version 1.1 carries the ICVCM CCP label, which is meant to signal alignment with a global integrity benchmark.

That combination may make it easier for corporate buyers to justify purchases internally. Many companies now face stronger scrutiny from auditors, regulators, investors, and civil society groups.

At the same time, more supply does not automatically mean market confidence rises. Buyers still assess risks such as permanence, additionality, and measurement uncertainty.

Even so, the milestone shows how fast some parts of the removals market are trying to scale. Large buyers are also helping drive this shift through multi-year offtake deals, like the Microsoft agreement for 2.85 million credits.

For Indigo, the new issuance supports its claim that soil carbon is moving from small pilot volumes toward larger, repeatable issuances. For the market, it adds another real-world data point: a major soil carbon program has now completed five issuance cycles and passed 2 million metric tons of verified climate impact.

The post Indigo Carbon Surpasses 2 Million Soil Carbon Credits in Landmark 1.1 Million Issuance appeared first on Carbon Credits.

Continue Reading

Carbon Footprint

Meta, Amazon, Google, and Microsoft Dominate Clean Energy Deals as Global Buying Slips in 2025

Published

9 hours ago

on

February 26, 2026

By

For nearly a decade, global companies have been racing to buy clean energy from wind farms, solar parks, and other green power projects. But 2025 marked the first decline in this trend in almost ten years — a surprising shift that signals a changing landscape for corporate sustainability.

The latest report from BloombergNEF (BNEF) shows that corporate clean energy purchasing dropped about 10% in 2025, falling from roughly 62.2 gigawatts (GW) in 2024 to 55.9 GW last year.

Let’s break down why this happened, what it means, and how the market could evolve in the coming years.

Clean Energy Buying: The Big Picture

Corporate clean energy buying usually happens through power purchase agreements (PPAs). They are long-term contracts where companies agree to buy electricity directly from renewable energy projects, often wind or solar farms.

For years, this was one of the fastest-growing parts of the clean energy market. Companies like Google, Amazon, Meta, and Microsoft drove most of the demand, helping build huge amounts of renewable capacity. But 2025 interrupted that streak.

Even though 55.9 GW is still one of the largest annual totals ever, the fact that it is lower than the year before shows a real shift in how companies approach renewable energy deals.

Why Corporate Clean Energy Buying Fell

There are several reasons why corporate clean energy buying slowed in 2025:

Corporate buyers are sensitive to electricity market rules and government policies. In many regions, uncertain policy environments made it harder to finalize long-term clean energy contracts. In the United States, for example, uncertainty about future clean energy incentives and carbon accounting standards caused many smaller corporations to hold off on signing new deals.

In some power markets, especially in parts of Europe, there were long hours of negative electricity prices. This happens when supply exceeds demand and power becomes so cheap that producers pay buyers to take it.

These price swings make standalone solar and wind contracts less attractive, especially for companies that want predictable, long-term value from their clean energy purchases.

corporate clean energy

Dominance of Big Tech

Another key point in the BloombergNEF findings is that the market is becoming more concentrated. As said before, four major tech firms, like Meta, Amazon, Google, and Microsoft, signed nearly half of all clean energy deals in 2025.

Meta and Amazon alone contracted over 20 GW of clean power last year, including deals that cover not just solar or wind, but also nuclear power — something unusual in past corporate PPA markets.

While this heavy concentration helps maintain volume, it also means that smaller companies are scaling back, which lowers the total number of buyers and contributes to the overall slowdown.

meta amazon google microsoft

Regional Differences: Where Things Slowed and Where They Didn’t

Corporate clean energy markets didn’t all move in the same direction last year. Bloomberg’s data shows clear regional patterns:

United States

The U.S. remained the largest single market for corporate clean energy deals, signing a record 29.5 GW of commitments. Much of this came from major technology companies looking to match their growing electricity needs with zero-carbon power sources.

Yet despite these high numbers, the number of unique corporate buyers in the U.S. dropped by about 51%, as many smaller firms pulled back from signing new PPAs.

Europe, Middle East & Africa (EMEA)

In the EMEA region, corporate PPAs fell around 13% in 2025, slipping back to levels closer to 2023. In Europe, in particular, rising negative prices and unstable policy conditions discouraged many new deals.

Asia Pacific

Asia had a mixed story. Some markets like Japan and Malaysia continued to attract corporate clean energy buyers, thanks to mature PPA markets and supportive regulations. But slower activity in countries like India and South Korea contributed to a drop in total volumes in the region.

clean energy

The Rise of Hybrid and Firm Power Deals

One interesting trend that emerged in 2025 is that companies are looking beyond just wind and solar. Because of the limitations with standalone renewable deals, many buyers are now exploring hybrid power contracts that mix renewables with storage, or even nuclear and geothermal sources.

Hybrid deals like solar paired with battery storage give companies more reliable power and help manage price and supply risks. BloombergNEF tracked nearly 6 GW of these hybrid agreements in 2025, and expects this share to grow.

  • According to a report by SEIA and Benchmark Mineral Intelligence, the United States added a record 28 gigawatts (GW) / 57 gigawatt-hours (GWh) of battery energy storage systems (BESS) in 2025. It reflected a 29% year-over-year increase.

Cheaper battery costs are part of this trend. Recent data shows that the cost of four-hour battery storage projects fell about 27% in 2025, reaching record lows. This makes storage-based renewable contracts more financially compelling.

bess US

Big Companies Still Push the Market

Even with the overall slowdown, corporate clean energy buying remains strong, especially among large technology firms.

In fact, while smaller companies took a step back, the major tech buyers helped keep total volumes near all-time highs. In other words, the market didn’t crash; it just shifted shape.

This becomes even clearer when we look at individual company progress. Microsoft reported recently that it now matches 100% of its global electricity use with renewable energy, an achievement that required decades of energy contracts and partnerships.

The Clean Energy Market Is Resetting, Not Retreating

The IEA projects that renewables will provide 36% of global electricity in 2026. This shows that the energy transition is moving forward, even if corporate clean energy purchases dipped in 2025. The slowdown does not signal failure. Instead, it reflects a market that is adapting as companies, technologies, policies, and economics evolve together.

renewables

Growth in corporate renewable deals is not always steady. A single year of lower volumes does not erase the gains of the past decade. Instead, it highlights the natural adjustments markets go through as strategies shift and conditions change.

In this transitioning phase, policy and regulation remain critical. Clear rules, incentives, and supportive frameworks encourage smaller companies to participate. Additionally, regions that provide stability, such as parts of the Asia Pacific, are seeing continued growth in corporate clean energy demand.

In conclusion, even with the dip in 2025, corporate renewable energy purchasing is far larger than it was ten years ago. The market is shifting rather than shrinking, and companies continue to find ways to power growth with clean energy. This slowdown may serve as a wake-up call, encouraging smarter, more flexible strategies that can sustain the energy transition for years to come.

The post Meta, Amazon, Google, and Microsoft Dominate Clean Energy Deals as Global Buying Slips in 2025 appeared first on Carbon Credits.

Continue Reading

Carbon Footprint

Navigating Nature Based Solutions – The 2026 Forecast

Published

1 day ago

on

February 25, 2026

By

“…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

Tweet

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.

Continue Reading

Trending

Copyright © 2022 BreakingClimateChange.com