Despite mounting political volatility and climate policy setbacks—such as the U.S. pulling out of the Paris Agreement once again—corporate engagement in the voluntary carbon market (VCM) is holding steady.
A new report from climate solutions provider Patch shows that the number of companies retiring carbon credits rose by 6%, even as the total volume of credits retired declined by 17% year-over-year. This reflects a fundamental shift: companies are favoring high-quality, lower-volume credits over bulk purchases of cheaper, lower-impact options.
This shift marks a structural evolution from traditional “neutralization” strategies toward contribution-focused models, where the emphasis lies in funding meaningful climate projects rather than simply offsetting emissions.
The Rise of Carbon Market Bifurcation
Patch’s analysis reveals that the VCM is splitting into two distinct quality tiers. Demand is consolidating around engineered and hybrid removal projects like biochar, direct air capture, and microbial mineralization. Nature-based projects—especially afforestation and reforestation—remain popular but increasingly supply-constrained.
With 79% of buyers demanding BeZero-rated BBB or higher credits, and 83% seeking Tier 2+ Sylvera ratings, integrity and transparency are defining today’s market dynamics. These preferences, along with rising scrutiny under EU’s Green Claims Directive, are pushing corporates to think beyond mere price-per-tonne.
Greenhushing: Doing More, Saying Less
Another subtle but critical trend discussed in the report is “greenhushing”—where firms continue climate action quietly to avoid political or public backlash. According to Patch, 25% of companies now minimize external ESG communications, even as they continue investing in sustainability.
The drivers? Fear of accusations of greenwashing, unclear Scope 3 emissions guidance from SBTi, and a politically polarized climate narrative.
Navigating a Constrained Future
As demand outpaces supply—especially for removal-heavy portfolios—companies are adopting multi-year offtake agreements to secure long-term access to premium projects. Notably, Microsoft and Meta have locked in over 12 million credits through advance purchases in ARR and IFM projects.
With 50% of buyers now expressing interest in offtake deals, this strategy could be the blueprint for navigating price inflation and scarcity in carbon markets.
You can download the free 40-page report here.
