May 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 a newsletter from Sustainacraft Inc. This article is Section A (Market Trends) of VCM Updates (Voluntary Carbon Market Updates).

«VCM Updates Structure»

A. Voluntary Carbon Credit Market Trends ← This article's focus

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

B. Trends in Major International Regulations

Introduction

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

Regarding Credit Issuance, total Issuance in April was 22.01 million units, with Nature-based Issuance reaching 8.06 million units. While the overall volume saw a slight decrease year-on-year, the Issuance of Nature-based Credits doubled. For Retirement, Credit Retirement in April totaled 12.32 million units, with Nature-based Retirement at 2.02 million units, both showing a year-on-year decrease.

Regarding investment trends, this month we introduce 10 notable investments in Nature-based and Carbon Dioxide Removal (CDR) projects. Four of these are by Microsoft, comprising 3 CDR projects and 1 Nature-based project, with Offtake Agreements for a total of over 10 million CDR Credits. As for investments by Japanese companies, we present Sojitz's formation of a forest fund in the US, and Mitsui O.S.K. Lines' (MOL) movement on an Offtake Agreement for CDR Credits related to Enhanced Rock Weathering (ERW).

The CDR industry has attracted significant attention and experienced rapid growth in recent years, but currently, most investments in CDR are from a limited number of US companies, such as Microsoft. While broader participation is needed for market expansion and growth, heightened political, geopolitical, and economic instability may be fostering a more cautious approach. Nevertheless, with investment examples like Mitsui O.S.K. Lines (MOL) emerging, we will continue to monitor how various players move forward.

For new project Pipelines, starting from this issue, we will also cover CDR in addition to Nature-based projects as project types, and Puro.earth and Isometric as registries. In April, there were 20 Nature-based projects and 2 CDR projects Registered.

A. Voluntary Carbon Credit Market Trends

A-1: Analysis of Credit Issuance, Retirement, and Investment Trends

- Target Registries: Verra (VCS), Gold Standard (GS), Climate Action Reserve (CAR), American Carbon Registry (ACR), ART-TREES, Puro.earth, Isometric
- Target Period: April 2025
- Note: Companies that Retire Credits are not obligated to register their actual names with the registries, so accuracy cannot be guaranteed. Please also note that there may be delays in reflection on the registries, and thus, changes in the number of projects or status changes for this target period may occur in the future.

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

• Issuance: 22.01 million (-14%), of which Nature-based was 8.06 million (+101%)
• Retirement: 12.32 million (-14%), of which Nature-based was 2.02 million (-28%)

<List of Issued Projects>

The following are the top 10 projects for which Credits were Issued during the target period.

Please note that the Credit labels (CORSIA, CCP, Article 6, Removals) shown above are all based on information provided by each certifying body (registry). Therefore, please keep the following in mind:

• Even if a Methodology itself is CORSIA eligible or CCP approved, it will not be counted as a labeled Credit in the table above unless the registry data includes the label information.
• Only the Verra (VCS) and Gold Standard (GS) registries provide information for Article 6 labels.

<List of Retired Projects>

The following is a list of the top 10 Nature-based projects with the highest Retirement volume during the target period.

<List of Retiring Companies>

The top 10 companies that Retired Credits from Nature-based projects during the target period are as follows. The company that Retired the most Carbon Credits was Netflix, with approximately 450,000 tons.

<Investment Trends in Nature-based and CDR Projects>

- Target Projects: Investments in Nature-based and CDR are covered.
- Target Period: April 2025
- Note: For "Credits" and "Group investment," only publicly announced figures are recorded, so there may be blank fields. In this table, "Beneficiary" refers to the investing company or the Credit buyer, while "Investment into" indicates whether the investment target is a project or a fund.

In April, there were 10 significant investments in Nature-based and CDR projects.

In the following A-3: Detailed Explanation Section, we will provide an overview of each of these investments.

A-2: Project Pipeline Analysis

- Target Registries: Verra (VCS), Gold Standard (GS), Climate Action Reserve (CAR), American Carbon Registry (ACR), ART-TREES, Puro.earth, Isometric
- Target Projects: Nature-based and CDR Pipelines
- Target Period: April 2025
- Note: There may be a slight time lag in reflection on the registries, so please note that changes in the number of projects or status changes for this target period may occur in the future.
- Terminology: Annual ER refers to the annual Emission Reduction / Sequestration volume (tCO₂e).

In this section, after introducing new Pipeline projects, we will review changes in last month's Pipeline that were not reflected in the previous newsletter.

Starting from this month's newsletter, we will cover seven registries, including Puro.earth and Isometric, as target registries, and Nature-based and CDR projects as target projects. Please note that the application date (Listing Date) in this database is either directly obtained from the registries or estimated. Therefore, the comprehensiveness and accuracy of the data are not guaranteed.

<April 2025 Pipeline>

The Nature-based project Pipeline includes 20 projects, and the CDR project Pipeline includes 2 projects.

<Significant Changes to March 2025 Pipeline>

The March Pipeline, introduced in last month's newsletter, has since been updated, and as of now, the Nature-based project Pipeline includes 23 projects, and the CDR project Pipeline includes 3 projects.

A-3: Detailed Explanation Section

This section provides a more detailed explanation of the investment projects introduced above.

<Investment Trends in Nature-based Projects>

This section introduces details regarding investments in CDR and Nature-based projects announced last month.