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Major Market Infrastructure Developments

Xpansiv-Korea Exchange Partnership Launches

Xpansiv and Korea Exchange (KRX) officially signed a strategic agreement on September 16, 2025, to launch South Korea's new voluntary carbon market. The partnership integrates KRX's platform with Xpansiv's Carbon Business Line (CBL), providing Korean users immediate access to global liquidity and connecting international participants to Korean projects. This marks a significant expansion of Asia's role in carbon finance, with KRX aiming to establish Asia's leading carbon market.

Spain's First Regional VCM Takes Shape

Galicia approved a decree on September 16, 2025, to establish Spain's first regional voluntary carbon market, targeting an early 2026 launch. This groundbreaking development represents the first subnational VCM initiative in Spain, positioning Galicia as a pioneer in regional carbon market development.

Regulatory and Policy Shifts

CFTC Withdraws Biden-Era Carbon Credit Guidance

On September 10, 2025, the Commodities Futures Trading Commission withdrew voluntary carbon credit guidance implemented by the Biden Administration in September 2024. The CFTC stated the guidance "provides limited value" and placed "disproportionate focus" on carbon credit derivatives, opting instead for a "uniform regulatory framework" without sector-specific guidance. This move aligns with the Trump Administration's broader deregulatory agenda.

New York Climate Week Highlights Market Momentum

The Integrity Council for the Voluntary Carbon Market (ICVCM) emphasized at New York Climate Week 2025 that high-integrity carbon markets are now "a powerful tool in the climate action toolkit". CCP-labelled credits continue commanding price premiums up to 25%, with nearly 40% of buyers actively seeking CCP-labelled credits, driving quality differentiation in the market.

ICVCM Methodology Approvals Drive Quality Standards

Biochar Methodologies Gain CCP Status

In August 2025, ICVCM approved three biochar methodologies for CCP eligibility, with the first CCP-labelled biochar credits issued by Isometric on September 9, 2025. The approved methodologies include Verra's VM0044, CAR's U.S. and Canada Biochar, and Isometric's Biochar Production and Storage. Twenty-five projects are registered under Isometric's methodology, with 500,000 credits expected in 2026.

Improved Forest Management Expansion

ICVCM also approved two Improved Forest Management methodologies, with one additional methodology receiving conditional approval pending leakage accounting improvements. These approvals are expected to increase annual CCP-labelled issuances by over 1 million credits by 2026.

Corporate Deal Flow and Market Activity

Microsoft's Continued CDR Leadership

Microsoft maintained its position as the dominant carbon removal buyer, with Q2 2025 seeing the company contract 14.6 million tonnes across 10 deals with 8 suppliers. This represented 94% of publicly announced Q2 purchase volume, bringing Microsoft's cumulative contracted total to nearly 25 million tonnes since December 2020.

Gevo's Major Carbon Credit Agreement

On September 17, 2025, Gevo's subsidiary signed a 5-year carbon removal agreement with Biorecro, generating $26 million in revenue. The facility is certified to store 165,000 tonnes of CO2 annually, with capacity for up to 1 million tonnes, providing CORCs (Carbon Removal Credits) with over 1,000-year permanence standards.

Market Performance and Trends

Supply Growth and Geographic Shifts

Carbon credit issuances reached 77 million credits in Q2 2025, up 39% from Q1 and 14% higher than Q2 2024. North America more than doubled its share of issuances from 21% in Q1 to 43% in Q2, with the American Carbon Registry becoming the top registry for the first time at 33% of new credits.

Price Dynamics and Quality Premium

CORSIA carbon futures surged to a record high of $21 this week, reflecting growing anticipation ahead of UN aviation meetings. The market continues showing a "splitting into high and low quality" segments, with CCP-labelled credits commanding significant premiums as buyers prioritize integrity over volume.

Compliance Market Strength

U.S. regional carbon markets showed robust performance, with RGGI auction prices rising 13.3% and California extending its cap-and-trade program through 2045. Washington's cap-and-invest program saw prices rise for the fourth consecutive time, underscoring market stability despite federal policy headwinds.Ready to stay ahead of the carbon market?

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