Compliance-linked supply is gaining momentum as carbon markets showed a continued shift toward higher-quality credits in the first quarter of 2026, even as overall volumes declined, according to new data from Sylvera.
Carbon credit retirements totaled 51 million in the quarter, down 8% from 55.29 million a year earlier. The total value of retirements also slipped to $290 million from $309.47 million.
Despite the drop, the average price per credit rose to $5.69, compared with $5.60 in the same period last year, underscoring a growing preference for higher-value credits.
Compliance-linked supply is also accelerating, with credits eligible under the aviation sector’s CORSIA framework accounting for nearly half of all new issuances for the first time.
At the same time, Core Carbon Principles-accredited credits have expanded to 18% of supply, up from less than 3% in 2023, with their price premium more than doubling.
Investment-grade credits rated BBB+ are commanding significant premiums. These credits now account for 62% of total rated market value, with average prices reaching $20.10, compared with $7.80 for lower-rated B credits.
Prices for higher-rated REDD+ credits have climbed for three consecutive quarters, while lower-rated counterparts remain flat.
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Emerging project categories are reshaping supply. Clean water initiatives have grown sharply to 8.2 million credits annually, while marine and mangrove projects reached 5.3 million credits. Nitrous oxide abatement and regenerative agriculture projects are also expanding rapidly.
“The first three months of the year have seen a fall in volume, but values are holding firm,” said Allister Furey, chief executive of Sylvera.
He added that supply constraints could intensify, as high-quality credits become scarcer and regulatory bottlenecks limit the availability of fully compliant credits, setting the stage for tighter markets in the months ahead.
Read more: Carbon Credit Market Tilts Toward Quality As Prices Rise Despite Lower Volumes, Sylvera Says
