Investing in Climate Credits for Carbon Removal in 2025: Which Credits Are Most Profitable for Mitigating Climate Change?
In the dynamic world of climate action, the voluntary carbon market (VCM) is undergoing a significant transformation in 2025. The focus is shifting from the quantity of carbon credits to their quality and integrity, as buyers prioritise credits that deliver real climate impact.
One of the key trends driving this change is the surge in carbon credit retirements. In the first half of 2025, retirements reached a record high of 95 million, a 9% increase over H1 2024, and the total retirement value jumped by 32%. This indicates a growing willingness among buyers to invest in high-quality carbon credits that meet stringent climate integrity standards.
Regulatory and standard-setting developments are also playing a crucial role in this shift. The adoption of the Core Carbon Principles (CCP) and the entry of Article 6 mechanisms are shaping the supply of carbon credits, enabling new routes to market, and reinforcing the integrity of credits. The upcoming implementation phases of programs like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) further push demand for compliance-grade, premium-quality credits.
The maturity of the market is another factor contributing to this shift. The growing alignment of voluntary and compliance markets, combined with the increasing participation of institutional investors, is driving the market towards scalability and transparency. Innovations such as blockchain carbon registries for enhanced transparency and improved price discovery are becoming more common, as seen in companies like Base Carbon.
Buyers are showing a strong preference for new vintages using ICVCM-approved methodologies, indicating a market that values contemporary, verified project standards to ensure higher integrity and climate impact. Supply-demand dynamics are also favouring premium, verified credits, as the supply of carbon credits increases, but demand is growing even faster, particularly for high-quality credits.
In Q2 2025, more than 37% of credits issued could be eligible under Phase 1 of CORSIA, the global offsetting scheme for international aviation. Furthermore, in H1 2025, 57% of Sylvera-rated credits retired had BB ratings or higher. The tech and IT sector has seen a 61% jump in retirement value for carbon removals in 2025, and nature-based projects like ARR (Afforestation, Reforestation, and Revegetation) are attracting premium prices, with an average price of $24 per ton in the primary market.
The demand for high-quality carbon credits is at an all-time high in 2025, with the average spend per ton across all credit types more than doubling, rising 2.2 times year-on-year. The Greenhushing Index, which tracks anonymous carbon credit retirements, fell to 23% in Q2 2025, indicating a growing transparency in the market.
Allister Furey, CEO at Sylvera, stated that meeting higher climate integrity standards and eligibility criteria for schemes like CORSIA is essential for new projects in development. The introduction of PACM credits, with high-integrity standards, is expected later in 2025. The American Carbon Registry (ACR) holds a 33% share of all registries in Q2 2025, reflecting its commitment to quality and integrity.
In conclusion, the shift towards quality and integrity in the VCM in 2025 is driven by a combination of buyer preferences for real climate impact, increased retirements at higher prices, regulatory standardization and compliance requirements, institutional market maturity, innovative transparency tools, and a market supply-demand imbalance favouring premium, verified credits. This shift is not just a trend, but a necessary step towards effective global climate action.
- The surge in carbon credit retirements, reaching a record high of 95 million in H1 2025, is indicative of a growing willingness among buyers to invest in high-quality carbon credits.
- Regulatory and standard-setting developments, such as the adoption of the Core Carbon Principles (CCP) and the entrance of Article 6 mechanisms, are shaping the supply of carbon credits and reinforcing their integrity.
- Buyers are showing a strong preference for new vintages using ICVCM-approved methodologies, indicating a market that values contemporary, verified project standards to ensure higher integrity and climate impact.
- Allister Furey, CEO at Sylvera, emphasized that meeting higher climate integrity standards and eligibility criteria for schemes like CORSIA is essential for new projects in development.
- The demand for high-quality carbon credits is at an all-time high, with the average spend per ton across all credit types more than doubling, indicating the necessity for effective global climate action.