The global carbon credit market is increasingly defined by quality rather than volume, according to the State of Carbon Credits 2025 report published by carbon data specialist Sylvera on January 15, as higher prices more than offset a decline in total retirements.
Carbon credit retirements fell 4.5% last year to 168 million credits, yet total end-user spending rose 6% to $1.04 billion. The increase was driven by buyers paying higher prices for credits perceived to have stronger environmental integrity. The weighted average price climbed to $6.10 a tonne in 2025, up from $5.75 the previous year.
The report highlights the rapid expansion of the forward offtake market as a signal of how carbon pricing may evolve.
Offtake agreements announced in 2025 totaled $12.3 billion, up sharply from $3.95 billion in 2024. These contracts, which extend through 2035, deliver roughly 12 million credits annually at an average price of $180 per tonne.
Despite representing less than 10% of current retirement volumes, the deals imply more than $2 billion in annual market value, underscoring the growing premium placed on future high-quality supply.
Relevant: Buyers Shift To Higher-Quality Carbon Credits As Market Matures
“Spot market volumes only tell part of the story,” said Allister Furey, Sylvera’s chief executive. “Forward markets show buyers are already pricing future supply very differently — paying around US$180 per credit for quality removals versus a US$6 spot average.”
Demand is increasingly concentrated in higher-rated credits. Credits rated BBB or above accounted for 31% of retirements in 2025, up from 25% a year earlier. For the first time, half of all retired credits carried ratings of BB or higher, reflecting heightened buyer scrutiny.
At the same time, supply constraints persist at the top end of the market, leaving highly-rated credits in deficit for a third consecutive year, while lower-quality and unrated credits remain oversupplied.
Price disparities widened notably within project categories. Afforestation, reforestation and revegetation (ARR) credits traded across a broad range, from $2 to more than $50 per tonne. By late 2025, highly-rated projects in this category averaged more than $26 per tonne, compared with about $14 for lower-rated equivalents.
Compliance demand is also reshaping market dynamics. Nearly a quarter of credits retired in 2025 were linked to compliance programs, including CORSIA and CCP-labeled credits.
Sylvera projects compliance demand could surpass voluntary purchases by 2027, intensifying competition for scarce, compliance-ready supply and placing further upward pressure on prices.
Read more: Carbon Credit Retirements Peak As Market Prioritizes Quality, Sylvera Report Finds
