AlliedOffsets has released a 2025 review of the voluntary carbon market (VCM), pointing to notable expansion that appears to have happened in a concentrated manner.
The firm reviewed information from its database that tracks more than 36,000 projects from over 35+ registries, 28,000+ corporates, and billions of tons of issuances and retirements, highlighting the key VCM developments that happened in 2025.
According to the report, after two years of contraction, the VCM went back to growing in 2025, with carbon retirements surpassing 2024 levels, offtakes growing to a record high, and the total market value exceeding $10 billion for the first time since AlliedOffsets started tracking the VCM back in 2020.
Along with these upward trends, the year brought a structural shift in favor of carbon removals, yet demand remained concentrated among a group of buyers, countries, and project types, even as policy support and standards improved.
In 2025, retirements and offsets grew by approximately 100 million tons when compared to 2024, but the number of unique buyers resembled those of previous years, signaling a trend of increasing volumes by a limited group of buyers.
In terms of new buyers, throughout the year, the VCM saw an increasing emergence of first-time purchasers from Asia and parts of Europe, indicating a potential trend of geographic diversification of demand during 2026.
Issuance volumes reached an all-time high, mostly from deals with biochar, utilization, bio-other, and BECCS, highlighting a continued dominance of biomass-based removals.
Carbon removal offtake deals increased by 305% between 2024 and 2025, when the market was dominated by Microsoft, and despite higher transaction volumes, overall CDR investment slowed in 2025.
Relevant: Massive Investments Needed To Scale Carbon Removal: AlliedOffsets Report
The US continued leading in CDR purchasing and project supply, followed by other mature markets such as the UK, the Netherlands, and Canada.
2025 brought strengthened policy and integrity support for the sector, with 50% of implemented and emerging compliance and regulatory schemes either already accepting offsets (36%) or considering their inclusion. Still, limitations remain, like the CORSIA Phase 1 supply being constrained due to limited availability of correspondingly adjusted credits.
In a retrospective comment, Anton Root, Head of Research at AlliedOffsets, stated, “2025 marked a year of resilience for the VCM. After restructuring, retooling, and learning from past mistakes, companies are heading into the new year with a feeling largely absent in recent times, cautious optimism that the worst may finally be behind them.”
Read more: Carbon Credit Retirements Peak As Market Prioritizes Quality, Sylvera Report Finds
