19th week 2025, Carbon Credit Markets news: REDD+, baseline, CORSIA, Legal Nature, High British VCM Prices, Catastrophe Bonds, incredible events, new book, BRICS, UNFCCC, IETA and Argentina.
- Art Dam
- 50 minutes ago
- 5 min read
Monday, 12 May 2025.
Global carbon markets continue transform, with strict new rules for REDD+🌳 and a credibility-boosting baseline. BloombergNEF analyzes the future of aviation carbon credits✈️, while UNIDROIT publishes another report on the legal nature ⚖️ of verified credits. In the United Kingdom🇬🇧, carbon credit prices continue to rise, reflecting an increasingly consolidated voluntary market. In the climate finance sector, Catastrophe Bonds🌪️ are gaining attention for their financial risks and opportunities in the face of environmental disasters. In addition to great events💡, such as the launch of the book 📖🇧🇷“Como entender o mercado de carbono: guia prático”, debates on interoperability in the BRICS carbon markets 🌏 and the first UNFCCC Article 6.4 Global DNA Forum, as well as an online webinar by IETA and ICROA and the Argentina Carbon Forum🇦🇷.
CARBON CREDITS and CLIMATE FINANCE
Stricter Rules on REDD+ and Baseline for Carbon Credits.
On May 16, the UN released new rules to ensure the credibility of carbon credits in the Paris Agreement Crediting Mechanism (PACM), establishing stricter standards to measure real emissions reductions and avoid unexpected increases.
Among the main advances, it clarifies the criteria for accounting for REDD+ activities at the project level, which must be included in the host country's national REDD+ strategy to be qualified, ensuring alignment with national climate efforts and reinforcing the credibility of emissions reductions.
The “baseline” criterion for estimating emissions that would have occurred without a project within the mechanism was also better specified, with the inclusion of a requirement for an initial adjustment for reductions—for example, setting historical or current baselines at a level 10% below business-as-usual emissions—plus a minimum 1% downward adjustment over time in all baseline approaches.
Consultations on the distribution of benefits from projects were also mentioned.
With the PACM enabling countries and other actors to work together to reduce greenhouse gas emissions by generating high-integrity carbon credits, these changes strengthen the governance of the carbon market.
BloombergNEF Analyzes the Future of Aviation Carbon Credits.
A recent article, “Aviation Credits Market Outlook: CORSIA Gets its Wings,” discusses the impact of the international aviation carbon offset scheme, known as CORSIA. It highlights how this UN-led mechanism seeks to legitimize the carbon credit market, especially at a time of growing demand for decarbonization in the aviation sector.
The article mentions that carbon credit prices could reach $97 per tonne of CO₂ equivalent by 2027, a significant increase from the current average price.
The article mentions that the aviation carbon credit market is expected to grow by 5% per year until 2035, driven by the need for decarbonization and the high costs of sustainable fuels. In the short term, prices could remain at $12.4 per tonne, but with expansion to 135 markets, including Russia, China and India, they could reach $96.5 per tonne.
Furthermore, it explores the challenges of the program, such as the movement of large markets:
- the exit of the US could reduce global demand by 14%
- the entry of the EU could raise prices to US$ 477 per ton in 2027
In other words, there is uncertainty regarding the future of the sector, but it is full of opportunities for investors who are aware of regulatory changes.
Minutes of another meeting of the Working Group on the Legal Nature of Verified Carbon Credits published.
These minutes document the fifth session of the UNIDROIT Working Group on the Legal Nature of Verified Carbon Credits, held from 2 to 4 April 2025 in Rome.
The report addresses topics such as interoperability and tokenization in the carbon credit market, as well as a review of legal principles related to the transfer, acquisition and execution of these assets.
Among the highlights were issues of data harmonization, transparency and the need for a common legal framework to facilitate the trading of carbon credits across different platforms. Principles on cancellation, revocation and retirement of credits were also discussed, as well as aspects related to secured transactions and insolvency.
UK Carbon Credit Price Growth and Its Impact on the Voluntary Market.
The article published on May 15 analyzes the evolution of carbon credit prices in the UK voluntary market, highlighting transaction data between 2020 and 2024. Woodland Carbon Code (WCC) credits saw a significant increase, rising from £11.02 per tonne in 2020 to £26.85 in 2024. Peatland Code (PC) credits saw more moderate growth, with prices ranging from £23.95 in 2022 to £25.04 in 2024.
The study, conducted by Ecosystem Marketplace in partnership with Scottish Forestry and IUCN, seeks to increase transparency in the carbon market by analyzing transaction data and average prices. In 2024, 277,815 tonnes of WCC credits and 187,291 tonnes of PC credits were reported, reflecting the growth of the sector and the growing interest of investors.
The research reinforces the importance of carbon credits for forest and peatland restoration, in addition to highlighting challenges such as price volatility and the need for greater participation of companies and governments to strengthen the market.
Catastrophe Bonds, About the Market that Profit - or Lose - from Climate Disasters.
When an insurance company issues a cat bond, investors buy shares and receive periodic interest, as long as no disaster occurs. If an event reaches a certain level of losses, the funds raised are used to cover the damages, and investors may lose part or all of the capital invested.
With the increase in the frequency of natural disasters due to climate change, cat bonds have become an essential instrument to ensure the stability of the insurance sector and encourage risk mitigation strategies.
Some time ago, Warren Buffet himself commented on the subject, as can be seen here on YouTube, video or short. He even talks a lot about “super cat bonds”, designed to protect insurers and reinsurers against financial losses in even rarer and more devastating events.
If you are interested, also see this Franklin Templeton article from September 2024, explaining the growth of the cat bond market and its role in investment diversification.
It is also worth mentioning the document from SUSEP - Superintendence of Private Insurance of Brazil “Lacuna de Proteção para Catástrofes Naturais: Estudo de caso sobre os eventos no Rio Grande do Sul durante o outono de 2024”.
EVENTS and OPPORTUNITIES
📍🇧🇷 Book launch “Como entender o mercado de carbono: guia prático”. May 21st at the ECCON Model Office in São Paulo, Brazil. Registration is closed but here is the book.
🖥️🇧🇷 “BRICS Interoperability of Carbon Markets”, May 20th and 21st, 2025. Virtual meeting. Agenda here.
📍🇵🇦 The First ever UNFCCC “Article 6.4 Global DNA Forum”. The DNAs - Designated National Authorities - are key players in the implementation of the Paris Agreement Crediting Mechanism. The hybrid event will be held on May 20 and 22 in Panama City. Here is the agenda.
🌍 🖥️ “Carbon Markets: Building Trust, Unlocking Capital – Best Practices for a Global Carbon Credit Market” Online webinar by IETA and ICROA. June 3, 2025. Register here.
📍🇦🇷 “Argentina Carbon Forum” July 28th and 29th, 2025, Córdoba City, Argentina. More details here.
🏆 If you have an interesting story about carbon credits in your country, our audience already reaches over 100 nations! Send your message directly through our LinkedIn page .
Sign up at www.carboncreditmarkets.com to receive insights, news and media updates and visit our new portal, Busca Global.
