August 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 the newsletter of 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 ← Subject of this Article
- Credit Issuance, Retirement, and Investment Trend Analysis
- Project Pipeline Analysis
- Detailed Explanation Section
B. Trends in Major International Regulations
Introduction
On Credit Issuance, Retirement, Investment Trends, and Project Pipeline Trends
This month's newsletter covers Carbon Credit Issuance and Retirement data for July 2025.
Total Issuance in July 2025 was 13.34 million units. This represents a decrease compared to the previous year, making it the lowest volume in the past four years. Looking at the data by Registry, the proportion of Issuances from Verra / VCS has been decreasing since 2022. By type, while Nature Restoration and Energy have decreased, REDD+ has increased.
Total Retirement in July 2025 increased from the previous year, reaching 11.64 million units. Looking at the proportions by Registry and project type, there was no significant change in the structure, with Verra / VCS and Gold Standard accounting for the majority, and Energy and REDD+ together making up more than half.
Regarding investment trends, this month we introduce 12 significant investments.
This section introduces investments in Nature-based and Carbon Dioxide Removal (CDR) projects announced last month. For Nature-based investments, we cover topics such as JP Morgan Chase's provision of a non-recourse loan for a US Afforestation project with an Offtake Agreement from Microsoft. For CDR investments, notable highlights include investments from a corporate coalition like Frontier and a large Offtake Agreement by Microsoft targeting BECCS and underground storage of organic waste.
As for the Project Pipeline, July includes 17 projects, and the June Pipeline was updated after last month's newsletter, now containing 35 projects.
A. Voluntary Carbon Credit Market Trends
A-1: Carbon Credit Issuance, Retirement, and Investment Trend Analysis
- Target Registries: Verra / VCS, Gold Standard (GS), Climate Action Reserve (CAR), American Carbon Registry (ACR), ART (ART-TREES), Puro.earth, Isometric
- Target Period: July 2025
- Note: Companies that retire credits are not obligated to register with their real names with the Registry, so please understand that accuracy cannot be guaranteed. Also, there may be delays in reflection on the Registry; therefore, please note that the number of projects or their status may change for the current period.Issuance and Retirement results for July 2025 are as follows:
Issuance Results: 13.34 million (37.66% decrease year-on-year)
Issuance volume for the period decreased compared to the previous year, becoming the lowest volume in the past four years.
Looking at data by Registry, the proportion of Issuances from Verra / VCS has been decreasing since 2022. By type, Nature Restoration (mainly Improved Forest Management (IFM) from ACR and CAR) and Energy (GS and Verra / VCS) have decreased, while REDD+ (all Verra / VCS) has increased.
Retirement Results: 11.64 million (34.72% increase year-on-year)
Retirement in July exceeded 10 million units, marking the largest Retirement volume for this period since 2022.
Looking at the proportions by Registry and project type, there was no significant change in the structure, with Verra / VCS and Gold Standard accounting for the majority, and Energy and REDD+ together making up more than half.
<Issued Project List>
The labels for credits shown below are all based on information provided by each certification body (Registry). Therefore, please note the following:
・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 label information is included in the Registry's data.
・Only the Verra / VCS and Gold Standard (GS) Registries provide information on Paris Agreement Article 6 labels.
Below is a list of the top 10 projects for which credits were Issued in July 2025, and projects for which labels (Paris Agreement Article 6, Core Carbon Principles (CCP), Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), Removal) were Issued.
Top Issued Projects List
Label Issuance Performance (Paris Agreement Article 6)
In July, Paris Agreement Article 6 labels were Issued for an energy efficiency project in Laos. Historically, Issuances of Paris Agreement Article 6 labels for a Cookstoves project in Rwanda (VCS-4150) have accounted for approximately 70% of the total. Similarly for CORSIA labels, which will be discussed later, a characteristic is that a small number of projects account for a large proportion of the Issuance volume.
Label Issuance Performance (Core Carbon Principles (CCP))
Regarding CCP labels, Issuances in July were primarily for Fugitive Emissions projects in Uzbekistan. Historically, CCP labels have been predominantly Issued for non-Carbon Dioxide projects, focusing on Fugitive Emissions.
Label Issuance Performance (Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA))
Regarding CORSIA labels, Issuances in July were for an Improved Forest Management (IFM) project in Mexico and an energy efficiency project in Brazil (both Pilot Phase, Vintage 2020). Currently Issued CORSIA labels include those for the Pilot Phase and Phase 1. For the Pilot Phase (2021-2023), Vintages from 2016-2020 do not require a Letter of Approval (LoA) from the host country government, while Vintages from 2021-2023 do require an LoA. For Phase 1 (2024-2026), all Vintages (2021-2026) will require an LoA. Please note that the Issuances confirmed this time are both Pilot Phase and Vintage 2020, which do not require an LoA, so an LoA has not been issued for these Mexican and Brazilian projects.
Label Issuance Performance (Removal)
Finally, regarding Removal labels, there were Issuances for five US Improved Forest Management (IFM) projects (all ACR) in July. Historically, Removal labels have also been primarily Issued for ACR's US-based IFM and Afforestation, Reforestation and Revegetation (ARR) projects.
<Retired Project List>
The list of the top 10 Nature-based projects with the most Retirement in July 2025 is as follows:
The largest Retirement was for the Brazilian REDD+ project (VCS-2551), which also had the highest Issuance volume as mentioned above, with over 600,000 units retired.
<Retiring Companies List>
The top 10 companies that retired Nature-based project credits in July 2025 are as follows:
The company that retired the most was Natura & Co from Brazil, with approximately 200,000 units. To date, the company has cumulatively retired 1.28 million units, primarily from REDD+ and Nature Restoration projects. This includes the Brazilian Verra / VCS-2551 (REDD+) project, which was mentioned in the previous section as having the largest Issuance and Retirement.
<Investment Trends in Nature-based and CDR Projects>
- Target Projects: Covers investments in Nature-based and Carbon Dioxide Removal (CDR) projects.
- Target Period: July 2025
Note: For "Credits" and "Group investment," only announced figures are recorded, so there may be blank fields. Also, in this table, "Beneficiary" refers to the investing company or the company purchasing the credits, and "Investment into" indicates whether the investment target is a project or a fund.
In July, there were 12 significant investments in Nature-based and Carbon Dioxide Removal (CDR) projects. For details on these, please refer to Section A-3: Detailed Explanation.
A-2: Project Pipeline Analysis
- Target Registries: Verra / VCS, Gold Standard (GS), Climate Action Reserve (CAR), American Carbon Registry (ACR), ART (ART-TREES), Puro.earth, Isometric
Target Projects: Pipeline related to Nature-based and Carbon Dioxide Removal (CDR)
Target Period: June-July 2025
Note: There may be a slight time lag in reflecting data on the Registry; therefore, please note that the number of projects or their status may change for the current period.
Terminology: Annual ER refers to the annual Emission Reduction / Sequestration volume (tCO₂e).This section covers new Pipeline projects for Nature-based and Carbon Dioxide Removal (CDR) from last month, as well as updates to the Pipeline from the month before last, which were introduced in the previous newsletter.
Please note that the Listing Date in this database is either directly obtained from the Registry or estimated. Therefore, the completeness and accuracy of the data cannot be guaranteed.
The July 2025 Pipeline includes 17 projects, and the June Pipeline was updated after last month's newsletter, now containing 35 projects.
<Nature-based Project Pipeline>