Valuing the Priceless: Voluntary Carbon Market Updates May 2025
- Wildlife Works
- 3 hours ago
- 3 min read
As the Voluntary Carbon Market (VCM) continues to mature, there has been a recent wave of policy updates, investment milestones, and signals of increased global coordination. Here are the key developments shaping the landscape:
🔄 Indonesia Embraces Global Standards
After previously pushing for a national-only standard, Indonesia is now moving to allow leading crediting programs like Verra and Gold Standard to operate within its borders. This policy shift suggests a more pragmatic approach and opens the door to greater interoperability between national and international markets, potentially unlocking new supply pipelines.
🏛️ Policy Signals from the UK and France
Both the UK and France are doubling down on high-integrity carbon credit use:
These actions send a clear message: alignment across standards is coalescing, and integrity criteria are now central to regulatory and corporate strategies.
🌍 Kenya Increases Climate Ambition
Kenya’s updated Nationally Determined Contribution (NDC) boosts its emissions reduction goal from 32% to 35% by 2035. Importantly, 80% of the NDC is contingent on international support, including through carbon markets—underscoring the VCM’s vital role in financing mitigation in the Global South.
🧭 VCMI Clarifies Corporate Credit Use
The Voluntary Carbon Markets Integrity Initiative (VCMI) released long-awaited guidance on how companies can use carbon credits to meet Scope 3 emissions targets. Key takeaway: Credits are encouraged to be used in addition to direct decarbonization. This framing will reinvigorate demand toward high-quality, high-impact credits that support global climate finance in the near term—especially for hard-to-abate emissions.
💸 Capital Continues to Flow into VCM
Despite headwinds, investment momentum remains strong. According to an analysis by QCI, billions of dollars continue to flow into the voluntary carbon market. Two key details:
$460M+ raised by project developers—led by a $250M infusion into Imperative Global by US-based Artemeter and $160M secured by Chestnut Carbon for ARR projects.
$131M in carbon dioxide removals, with DAC startup Capture6 raising $27.5M.
Everland & BNP Paribas also recently announced a $50M capital markets initiative to support the first 20 Indigenous and traditional community-led forest projects under the new Equitable Earth Standard. These developments reflect growing interest in diversified project types across the voluntary carbon market.
A new report from Patch, a carbon credit purchasing platform, further shows that more companies retired carbon credits in the five months since the U.S. presidential election than during the same period a year ago, demonstrating that climate action persists despite the current administration. However, according to Patch, 44% of buyers want a removals only portfolio.
Investment in carbon removals—both technological and nature-based—is currently outpacing investment in emissions reductions. However, according to the Intergovernmental Panel on Climate Change (IPCC), emissions reductions are critical to meeting global climate targets. Additionally, ecosystems such as forests, wetlands, and peatlands are nearing ecological tipping points and require urgent preservation and restoration. Balancing investment between removals and reductions is necessary to achieve climate stability and biodiversity goals.
🧩 Corporate Climate Commitments Face Growing Pains
An op-ed published in Trellis dives into how major companies are navigating the reality that they may not be able to reach their ambitious climate action goals. In the face of this reality:
Microsoft adjusted and reaffirmed its targets.
HSBC delayed its goals due to uncertainty.
Both cases highlight the tension between ambition and reality, but also point to a maturing understanding of climate accountability: transparency and incremental progress may soon be valued over perfection.
Meanwhile, the Science Based Targets initiative (SBTi) is currently taking input on its corporate net-zero standard. It will be telling to see how responsive the organization is to feedback from companies struggling to meet their science-based targets. The outcome could shape how net-zero pathways are framed in policy and practice going forward, especially for Scope 3-heavy sectors.
🔮 Looking Ahead: Resilience Over Retreat
In a timely piece, the Harvard Business Review argues that recent corporate backpedaling is likely a pause, not a pivot. Market fundamentals like climate risk, clean energy economics, and evolving business models will inevitably pull companies back toward sustainability. Those that stay the course now will be positioned to lead the next wave.
Bottom Line:
From evolving government policy to maturing corporate behavior and sustained investor confidence, the VCM is becoming more integrated, more accountable, and more aligned with global climate architecture. The question is no longer what integrity looks like, but how fast we can scale it.
