The voluntary carbon market (VCM) saw significant developments in 2024, with advancements in credit integrity, corporate guidance, and the operationalization of Article 6 under the Paris Agreement. Climate tech company Abatable has identified 11 key takeaways shaping the VCM as we enter 2025.
1. Renewable energy is the most retired carbon credit project type. Renewable energy credits accounted for 31% of 2024 retirements, with 51.1 million credits retired. This represents an 11% decline from 2023. Notably, retirements from cookstove-originated credits crew by 67%, while soil carbon credits surged 285%, signaling evolving buyer preferences.
2. Energy sector dominates carbon credit retirements. Energy companies retired credits corresponding to 29.3 million tons in 2024, with 62% addressing Scope 3 emissions and 38% supporting greener electricity tariffs. The aviation sector followed, retiring 8.5 million tons for airline climate goals and passenger offsets.
3. U.S. airlines drive CORSIA demand. With Phase 1 of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) beginning in 2024, U.S. airlines are expected to require up to 40 million credits by 2026. The U.K. and Germany are projected to follow with demands of 12-17 million and 11-14 million credits, respectively.
4-6. The U.S. leads in issuances, active projects, and developers. The U.S. issued 59.3 million credits in 2024 and hosted 310 active projects, along with 114 project developers—more than any other country.
7. Carbon capture sees growth. Issuances from carbon capture and storage (CCS) projects increased nearly sixfold, reaching 212,101 units in 2024, reflecting growing interest in this technology.
8. REDD+ prices remain stable. Conservation, restoration and REDD+ project credits showed the most stable pricing, averaging $3.70 in 2024.
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9. Industrial efficiency tops CCP-friendly issuances. These projects issued 19.9 million Core Carbon Principles-friendly credits in 2024, leading the VCM.
10. Rwanda excels in Article 6 readiness. With a robust regulatory framework and multiple agreements, Rwanda positioned itself as a leader in Article 6 readiness.
11. Shell is the largest credit retiree. Shell retired 12.6 million credits in 2024, maintaining its leadership from 2023.
These developments underscore the evolving dynamics of the VCM and its role in global climate action.
