The voluntary carbon market (VCM) is back on the rise, but is the growth as inclusive as it seems? AlliedOffsets' 2025 review paints a picture of a VCM experiencing a resurgence, yet with some intriguing caveats. Let's dive in!
AlliedOffsets, a firm that tracks over 36,000 projects across 35+ registries, with data from 28,000+ corporates, and billions of tons of issuances and retirements, released its 2025 VCM overview.
After a couple of years of contraction, the VCM saw a return to growth in 2025. Carbon retirements exceeded 2024 levels, offtakes hit record highs, and the total market value surpassed $10 billion for the first time since AlliedOffsets started tracking the VCM in 2020. This is definitely something to celebrate!
But here's where it gets controversial... Despite these positive trends, the report highlights a concentration of demand. While the market is growing, it's largely driven by a limited group of buyers, countries, and specific project types, even with improved policy support and standards.
In 2025, retirements and offsets grew by approximately 100 million tons compared to 2024. However, the number of unique buyers remained similar to previous years. This suggests that a smaller group of buyers are purchasing larger volumes of carbon credits.
On a positive note, the VCM saw an increasing emergence of first-time purchasers from Asia and parts of Europe, suggesting a potential geographic diversification of demand in 2026. This could signal a more inclusive market in the future.
Issuance volumes reached an all-time high, primarily driven by deals involving biochar, utilization, bio-other, and BECCS, indicating a continued dominance of biomass-based removals. Carbon removal offtake deals increased by 305% between 2024 and 2025, with Microsoft being a major player. However, overall CDR investment slowed in 2025, even with higher transaction volumes.
The United States continued to lead in CDR purchasing and project supply, followed by other mature markets such as the UK, the Netherlands, and Canada.
2025 also saw strengthened policy and integrity support for the sector, with 50% of implemented and emerging compliance and regulatory schemes either already accepting offsets (36%) or considering their inclusion. However, limitations remain, such as the constrained supply of CORSIA Phase 1 credits due to limited availability.
Anton Root, Head of Research at AlliedOffsets, noted, "2025 marked a year of resilience for the VCM. After restructuring, retooling, and learning from past mistakes, companies are heading into the new year with a feeling largely absent in recent times, cautious optimism that the worst may finally be behind them."
What do you think? Is the concentrated nature of the VCM a cause for concern, or is it a natural phase of market development? Do you see the increasing involvement of new buyers as a sign of a more inclusive future? Share your thoughts in the comments below!
