A new report from carbon removal developer Arbonics reveals a looming supply gap in Europe’s voluntary carbon market (VCM), as demand for high-integrity forest carbon removal credits continues to grow while project investment lags behind.
The European Forest Carbon Credits 2025 report, announced last week, offers the first detailed overview of Europe’s nature-based carbon credit landscape.
It finds that just 0.5% of all nature-based carbon credits issued by Verra in 2024 came from European projects—despite increasing buyer interest and regulatory pressure.
Only 65,000 credits originated from European agriculture, forestry and other land use (AFOLU) projects, and fewer than 1,000 from afforestation efforts.
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As companies shift from offsetting to removals to meet Corporate Sustainability Reporting Directive (CSRD) and Carbon Removals and Carbon Farming Regulation (CRCF) requirements, European forest credits are becoming more attractive.
Yet the report warns that without early investment, supply will fall far short of demand, especially given that afforestation projects take 3–5 years before issuing credits.
“If buyers don’t start thinking like long-term investors, they’ll miss out on credible carbon removals in Europe entirely,” said Lisett Luik, co-founder of Arbonics.
Currently, most nature-based credits come from outside Europe: 61.5% from South America, 28.6% from East Asia, and 5.2% from Sub-Saharan Africa.
Despite this, a survey by Arbonics found that 80% of European landowners are open to afforestation—pointing to a significant untapped opportunity.
To help buyers evaluate quality, the report outlines four key integrity principles: additionality, permanence, leakage prevention, and social impact.
These criteria are critical for aligning with both corporate climate goals and emerging EU standards.
