Globally, we're seeing new regulations, shifting buyer expectations, and stronger calls for integrity in climate action.
In this blog, we'll summarise the key insights and learnings shared at our 'Carbon Market Trends and Insights for Buyers' webinars in early September and explore four key trends shaping the carbon market today.Together, they highlight a sector in transition: moving away from volume-driven activity towards a future built on quality, credibility, and accountability.
One of the clearest signals from the market right now is the growing demand for quality over quantity.
In recent years, the voluntary carbon market has been under scrutiny, the quality of certain projects being called into question. This has eroded trust among buyers and the general public. Fast forward to today, and integrity has become the watchword. Companies are no longer just asking for carbon credits. Instead, the question has become, "Is this a high-integrity credit that truly delivers impact?"
Frameworks such as the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Paris Agreement Crediting Mechanism (PACM) are setting new benchmarks for credibility. Buyers are also demanding projects that do more than reduce emissions - they want co-benefits like biodiversity, local job creation, or community empowerment.
The shift isn't without challenges. Stricter methodologies for baselines, additionality, and monitoring mean projects issue fewer credits and face higher costs. Yet this rigour is raising the value of those credits, with prices for high-integrity units climbing steadily.
The expansion of regulated carbon markets is another defining global trend. Governments are steadily extending carbon pricing mechanisms to cover more sectors, whilst at the same time voluntary and compliance markets are converging.
In Europe, the EU Emissions Trading System (EU ETS) has grown beyond power and heavy industry to include maritime shipping, with a new ETS2 in the works for buildings and road transport. In Asia, China's ETS is broadening to cover cement, steel, and aluminium, whilst Japan is making its GX League mandatory and Vietnam is rolling out its own market-based system. This sends a clear message: carbon pricing is no longer niche; it is becoming a mainstream policy tool across the globe.
Convergence of markets is accelerating too. In countries like Switzerland and Sweden, voluntary standards are already being recognised for compliance purposes. Meanwhile, leading voluntary standard bodies such as Gold Standard are aligning with PACM, which is tightening its rules on baselines, additionality, leakage and more. The result is an increasingly integrated ecosystem where the voluntary and compliance spheres no longer operate in isolation.
"By 2035, compliance-driven markets could make up about half of global demand for carbon credits." - Guy Turner, Head of Carbon Markets, MSCI
"We're seeing a growing convergence between voluntary and compliance markets, with so-called voluntary standards now used for compliance in places like Switzerland, Sweden, and Singapore. At the same time, corporations are considering future credits from PACM for voluntary use — and governments are expected to adopt PACM for compliance as well." - Karolien Casaer-Diez, Global Senior Director, Compliance Markets, South Pole
"We realise that a whole range of carbon pricing instruments are emerging in the Asia Pacific region especially in Southeast Asia or ASEAN countries like Vietnam, Indonesia and Malaysia. We also see that compliance markets like the Australian safeguard mechanism, the South Korean ETS and Chinese ETS continue to mature and expand their scope." - Mei Zi Tan, Manager, International Research and Projects, Carbon Market Institute
For companies, this creates both risks and opportunities. On one hand, regulation adds complexity; on the other, convergence could make credits more fungible and valuable. The winners will be those who anticipate these shifts and have a comprehensive carbon credits purchasing strategy early.
While carbon pricing dominates globally, Europe is leading the charge on another front: regulating how companies communicate their climate efforts.
The EU Empowering Consumers for the Green Transition Directive sets out strict guidance on how voluntary carbon credits can be used in corporate claims. Its purpose? To shield consumers from misleading "greenwashing". Although the Green Claims Directive has been delayed, the direction of travel is clear: the EU wants honesty, clarity, and evidence in environmental marketing.
Across the Channel, the UK's Competition and Markets Authority (CMA) has gained new enforcement powers under the Digital Markets, Competition and Consumers Act. Misleading environmental claims could now result in fines of up to 10% of global turnover — a powerful incentive for businesses to get their messaging right.
"It's not enough to buy quality credits — companies must frame claims transparently to avoid misleading consumers. That’s why we developed a Green Claims Playbook to guide our teams and avoid misleading customers" - Jacqueline Hadasch, Manager Climate & Sustainability, E.ON Strategy, Sustainability & Innovation
The net effect is that European companies must do more than simply buy credits. They need to demonstrate a credible decarbonisation strategy, clearly explain how offsets fit within it, and be transparent in their reporting. Anything less risks reputational damage and regulatory action.
One of the biggest innovations happening in carbon pricing policy today is the EU’s Carbon Border Adjustment Mechanism (CBAM). CBAM is designed to level the playing field by ensuring imported goods carry the same carbon price as those made within the EU. For exporters towards the EU CBAM isn’t just a climate policy — lowering carbon footprint is a matter of trade competitiveness.
Flexibilities such as exemptions for small importers and simplified reporting are helping to ease the transition, but the message is firm: EU buyers will demand verified emissions data. Companies that cannot provide it risk losing competitiveness in European markets.
"The EU's CBAM has definitely accelerated momentum in Asia-Pacific. Countries like China and Vietnam are developing ETSs not only to meet climate goals but also to keep some of the carbon pricing revenue within their own jurisdictions." - Mei Zi Tan, Manager, International Research and Projects, Carbon Market Institute
In short, CBAM makes carbon management a core part of doing business for any exporters to EU. Combined with expanding domestic carbon pricing schemes, it signals a new era where carbon intensity is as much a commercial metric as it is an environmental one.
Webinar: Carbon Market Trends and Insights for Buyers (APAC Session).
Webinar: Carbon Market Trends and Insights for Buyers (EU Session).
Taken together, these trends highlight a clear trajectory: the carbon market is maturing. It is no longer supplementary, but a central pillar of climate strategy, international trade, and corporate reputation.
The flight to quality ensures credits are more credible. The global expansion of regulated markets — and convergence with voluntary standards — adds breadth and rigour. For businesses, this evolution means it's time to get serious. The winners will be those who act early: investing early in high-integrity projects, diversifying portfolios, and being transparent about how credits fit into their broader decarbonisation plans. Our top tips for buyers in this market are to build a diversified portfolio that mitigates risk across different project types, standards, and geographies.
We also recommend you lock-in future supply through long-term partnerships with reputable project developers. This helps scale the availability of the high-integrity credits your company will require in the future as prices are expected to rise, particularly CORSIA-eligible units. Finally, enhance your transparency and reporting. Being clear in your annual reports about the role of carbon credits in your overall decarbonization strategy, how you select projects helps you get ahead of regulation and minimizes greenwashing risk. This evolution will only strengthen the market as a powerful tool for driving meaningful climate action.
Whilst complex, the evolution of carbon markets is highly promising. When implemented effectively, they can serve as powerful instruments for delivering genuine climate action.
Discover how you can invest in high-integrity projects that cut emissions and strengthen your climate strategy in a fast-evolving market.
