The market for project-based carbon credits is facing a regulatory reset as governments move toward more formal oversight of a system that has struggled with questions around credibility, transparency and enforcement.
A white paper from Columbia University’s Center on Global Energy Policy examines how the G20 countries, excluding the U.S., plus Singapore are building regulatory frameworks for carbon credits. The study finds that governments are increasingly moving beyond voluntary standards and establishing rules covering how credits are issued, tracked, traded and used.
Carbon Credit Markets Face Tighter Regulation Worldwide
The shift comes as activity in project-based carbon markets has weakened. Columbia’s analysis shows that annual credit issuance has fallen from its recent peak, even as cumulative issuance has continued to grow.
The paper’s companion chart shows annual issuance across independent, international and governmental sources from 2018 through 2025, with 2025 representing partial-year data. Both graphics are based on World Bank data.
The market’s challenges extend beyond volumes. Buyers and regulators have raised concerns involving additionality, measurement, permanence, transparency and double counting. Columbia argues that voluntary standards have improved market practices but do not carry the same legal force as government regulation.
The authors write that voluntary initiatives “cannot provide enforceable safeguards, consistent oversight, or dependable recourse for market participants.”
Regulation is consequently expanding across three areas: the supply of credits, their use by buyers and the infrastructure through which they are traded. National registries are also taking on a larger role in issuance, ownership records, transfers and retirements, signaling we might be entering a more state-anchored era.
How New Carbon Market Rules Could Reshape Credit Trading
Price differences add another layer to the market’s fragmentation. Columbia’s third figure tracks carbon-credit prices by project type, showing how removal and reduction credits have traded at different levels over time. The chart uses data from Ecosystem Marketplace.
The regulatory landscape remains uneven across jurisdictions. Some governments have developed detailed frameworks, while others continue to rely more heavily on voluntary systems or bilateral arrangements. That divergence can complicate the movement and comparison of credits across markets.
Columbia’s authors caution that regulation by itself will not guarantee a robust market. “Oversight is an enabling condition rather than a guarantee” of a scalable, high-integrity carbon-credit market, they write.
For companies and investors, the evolution of these rules could determine which credits can be issued, traded and ultimately used for climate-related claims as carbon markets become more closely integrated with national climate and financial-market frameworks.
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