April 2025 VCM Updates: Section A

This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.

This is Sustainacraft Inc.'s newsletter. This article is Section A (Market Trends) of VCM Updates (Voluntary Carbon Market Updates).

«VCM Updates Structure»

A. Voluntary Carbon Credit Market Trends ← Subject of this article

1. Carbon Credit Issuance, Retirement, and Investment Trend Analysis
2. Project Pipeline Analysis
3. Detailed Explanation Section

B. Trends in Major International Regulations

Introduction

On Carbon Credit Issuance, Retirement, Investment Trends, and Project Pipeline Trends

Regarding Carbon Credit Issuance, the total issuance in March was 14.86 million units, and nature-based issuance was 2.54 million units, with both decreasing year-on-year. Among these, a notable feature in March was the increase in issuance by the CAR registry.

Regarding Retirement, the total Carbon Credit Retirement volume in March was 5.97 million units, which also decreased from the previous year. The primary registry for this Retirement was GS, not VCS.

Previously, while Carbon Credit Issuance showed diversification among registries, Retirement largely consisted of VCS due to its numerous existing projects, a trend that had continued. However, this month alone, the proportion of VCS in Carbon Credit Retirement decreased, suggesting a diversification here as well. We will continue to monitor future Retirement trends closely.

Regarding investment trends, this month we introduce five notable investments in nature-based and Carbon Dioxide Removal (CDR) projects. Three of these relate to investments by companies such as Microsoft and Mitsui O.S.K. Lines, as well as Frontier, an AMC (Advanced Market Commitment). The remaining two involve fund establishment initiatives by SLM Partners and Oji Holdings.

For new project Pipelines, three nature-based projects were submitted in March. This includes a project in Vietnam utilizing Verra's new rice paddy Methane Methodology (VM0051), which was introduced in last month's newsletter.

A. Voluntary Carbon Credit Market Trends (Verra)

A-1: Carbon Credit Issuance, Retirement, and Investment Trend Analysis

- Registries analyzed: VCS (Verra), GS (Gold Standard), CAR (Climate Action Reserve), ACR (American Carbon Registry), Puro (Puro.earth), Isometric
- Period: March 2025
- Note: Please be aware that companies that Retired Carbon Credits are not obligated to register with registries under their real names, so accuracy cannot be guaranteed. Also, there may be delays in reflection on registries, so please note that the number of projects or status changes for this period may still fluctuate.

Issuance and Retirement results for the target period are as follows (figures in parentheses indicate year-on-year change):

• Issuance: 14.86 million (-40%), of which nature-based 2.54 million (-70%)
• Retirement: 5.97 million (-54%), of which nature-based 1.4 million (-67%)

Below are the top 10 projects for which Carbon Credits were Issued during the target period.

The Carbon Credit labels displayed above (CCP, CORSIA, Article 6, Removals) are all based on information provided by each certification body (registry). Therefore, please note the following:

• Even if a Methodology itself is CCP approved or CORSIA eligible, it will not be counted as a labeled Credit in the table above unless the label information is included in the registry's data. In this instance, for example, the GS TPDDTEC Methodology (Cookstoves) is CCP approved and CORSIA eligible (conditional), but the data from the registry did not include label information.
• Only the VCS and GS registries provide Article 6 label information.

The list of the top 10 nature-based projects with the highest Retirement volume during the target period is as follows:

The top 10 companies that Retired Carbon Credits from nature-based projects during the target period are as follows:

- Period: March 2025
- Note: This section covers investments in natural regeneration, REDD+, and nature-based CDR projects. "Credit volume" and "Investment amount" may represent future projected values.

In March, there were three significant investments in nature-based and CDR projects.

A-2: Project Pipeline Analysis

Registries analyzed: VCS (Verra), GS (Gold Standard)
Period: March 2025
Note: There may be a slight time lag for reflection on registries, so please note that the number of projects or status changes for this period may still fluctuate.
Terminology: Annual ER refers to the annual Emission Reduction / Sequestration volume (tCO₂e).

This section will first introduce new Pipeline projects and then review significant changes in last month's Pipeline that were not reflected in the previous newsletter.

The Pipeline for nature-based projects includes the following three projects:

The ALM project in Vietnam (VCS-5469) utilizes Verra's new rice paddy Methane Methodology (VM0051), which was introduced in last month's newsletter.

In last month's newsletter, the February Pipeline included a total of 33 projects. However, it has since been updated and now includes a total of 36 projects.

A-3: Detailed Explanation Section

This section provides a more detailed explanation of the investment cases introduced earlier.

This section introduces content related to investments in CDR and nature-based projects announced last month.