34th Week Carbon Credit Markets 2025. China expands cap-and-trade; Paraguay and Verra partners; FASB defines voluntary credits as expense; India and Japan sign agreement; US$1.3 trillion for climate
- Art Dam
- 21 minutes ago
- 8 min read
Monday, 01 September 2025.
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Highlights from the 34th Carbon Credit Markets 2025 week.
- Carbon Credits. 🇨🇳China expanding its cap-and-trade system by 2030 to all industrial sectors; 🇵🇾Paraguay partners with Verra; Article 6 and must-see content after IETA's Latin America Climate Summit 2025; methodologies for biochar and forest management approved by ICVCM.
- Other Highlights. In the 🇺🇸United States, FASB takes a position on environmental credits: voluntary credits as expenses; and the US$1.3 trillion annually until 2035 from Net-Zero Alliance investors.
- Opportunities. Webinar on India's 🇮🇳 groundbreaking agreement for international credits (ITMOs) in the Japanese market🇯🇵 GX ETS; follow Climate Week in Addis Ababa; and VCMI's new strategic guide on the integrity of carbon markets.
- Events. Many events, see below.
CARBON CREDITS
🇨🇳 China publishes new guidelines to strengthen its national carbon market.
On August 25, the Chinese government published a new strategic guide to strengthen its carbon market, with ambitious goals: by 2027, all industrial sectors will be covered, and by 2030, a full cap-and-trade system will be implemented. The plan includes improvements in emissions measurement, reporting, and verification, as well as mechanisms to ensure environmental integrity and avoid double counting. The document also reinforces the role of the carbon market as a central tool for achieving the goal of climate neutrality by 2060, aligning the national system with international best practices and promoting greater transparency and credibility. This initiative positions China as a key player in the global carbon pricing architecture. Read more.
🇵🇾 Paraguay Accelerates Carbon Market Growth with Verra's Support
Verra has signed a Memorandum of Understanding with Paraguay's Ministry of Environment and Sustainable Development (MADES) to strengthen capacity building and knowledge sharing on carbon markets. The partnership aims to prepare local projects for certification under the Verified Carbon Standard (VCS) program, facilitate their entry into international markets, and support the country in meeting its climate goals under the Paris Agreement. Activities include courses, workshops, and seminars on agricultural management, forest conservation, and Article 6 mechanisms, expanding access to climate finance and promoting sustainable development. Press release in English and Español.
🌎 Carbon Markets and Article 6 in Latin America: New Reports, Highlights from the IETA Climate Summit.
During the Latin America Climate Summit 2025, held by IETA in São Paulo, two strategic reports on carbon markets in Brazil and Latin America were released. The documents highlight the region's growing role in carbon pricing, with 16 operational instruments and US$1.5 billion in investments by 2023.
The event brought together experts who discussed regulatory challenges, opportunities for integration between voluntary and regulated markets, and Brazil's potential as a global leader in climate solutions. Panels covered topics ranging from legal governance to carbon accounting, highlighting the role of local communities and the urgency of integrity standards. Read our full coverage here.
Regarding the status of Article 6 in the region, as presented at the IETA Climate Summit by Martin Rabbia (Article 6 and Carbon Pricing Expert at the UNFCCC Regional Collaboration Centre for the Caribbean) — who had already highlighted the incipience of the topic and the regional potential for blue carbon — see the table below for the data shared.
Regarding the involvement of Latin American and Caribbean countries specifically regarding Article 6.2, only Guyana and Suriname have submitted initial reports and addressed unilateral authorizations.
Regarding Article 6.4, the current status is as follows.
Finally, here's the status of CDM projects' migration to the new Article 6.4 mechanism so they can continue generating valid carbon credits. The deadline is December 31, 2025.
In other words,
🇧🇷 Brazil has the highest number of pending projects (95), with none approved.
🇨🇴 Colombia, 🇵🇪 Peru, and 🇦🇷 Argentina also have significant pending projects.
🇨🇱 Chile is the only country with a significant number of approved projects (32), in addition to some pending projects.
Besides these countries, the Dominican Republic, Costa Rica, Ecuador, El Salvador, and Honduras also have a few CDM projects.
🌱ICVCM Approves New Methodologies for Biochar and Forest Management Projects
The Integrity Council for the Voluntary Carbon Market has approved three biochar and two Improved Forest Management (IFM) methodologies for the CCP high-integrity seal, reinforcing the credibility of these emerging climate solutions. Biochar, produced by biomass pyrolysis, acts as a long-lasting carbon sink and has seen demand double in the last two years. IFM projects target forestry practices that increase carbon capture and reduce emissions, such as extended crop rotations and land conservation. An additional methodology for Mexico was conditionally approved, requiring technical adjustments before CCP credits can be released.
Regarding biochar, also known as the ancestral Terra Preta of the Amazon Indians—used for over 4,000 years—it can indeed inspire modern carbon sequestration solutions and integrate global climate policies. Verra itself recently strengthened its biochar methodology, and large groups and startups have been focusing on the solution for some time.
OTHER HIGHLIGHTS
🇺🇸 FASB makes important decisions on environmental credits. Voluntary credits are recorded as expenses.
The FASB (Financial Accounting Standards Board) is the body that sets United States accounting standards, known as US GAAP, widely used by American companies and their subsidiaries. Although the FASB has global influence on the financial reporting of multinationals, most countries adopt the IFRS standards, issued by the IASB. Both bodies have collaborated to align their standards, but significant differences remain between the two accounting systems.
In any case, it is important to note that on August 13, 2025, the FASB decided the following on Environmental Credits and Environmental Credit Obligations (Topic 818):
Definition and scope: Environmental credits are intangible assets used to prevent or offset emissions, and should be accounted for under the new Topic 818 — not as derivatives or government subsidies.
Asset recognition: Credits are recognized as assets when it is probable that they will be used to meet regulatory obligations or sold. Voluntary credits are recorded as expenses.
Initial and subsequent measurement:
Credits generated internally or received through concession are measured at transaction cost.
Credits used for compliance are not remeasured; others must be tested for impairment.
Subsequent measurement at fair value is permitted for certain credits not linked to compliance.
Environmental Obligations (ECOs):
Should be recognized as liabilities when regulatory events require compensation.
The financed portion is measured at the cost of available credits; the unfunded portion is measured at the fair value of the required credits.
Presentation and Disclosure:
Assets and liabilities must be presented separately in the balance sheet.
Detailed qualitative and quantitative disclosure requirements have been defined, including measurement methods, intended use, and significant estimates.
Transition and Effective Date:
Retrospective application with adjustments to initial equity.
Effective Date: after December 15, 2027, for public companies; after December 15, 2028, for other entities. Early adoption is permitted.
Other topics: A new project on digital assets, including cryptocurrencies and cryptoasset lending, has been added to the research agenda.
If you want to read more about it, click here.
🌱 US$1.3 trillion for the climate: investors accelerate the net-zero transition
On July 29, 2025, UNEP FI published the article "How the NZAOA is supporting the unlocking of $1.3 trillion in climate finance," highlighting how the Net-Zero Asset Owner Alliance (NZAOA)—which brings together 86 institutional investors with US$9.2 trillion in assets—is supporting the mobilization of US$1.3 trillion annually in climate finance by 2035. The initiative is part of the "Baku to Belem" roadmap and focuses on six strategic fronts, such as catalytic capital, standardization of financial vehicles, scaling of bankable projects, and regulatory review, aiming to unlock private capital to accelerate the global transition towards net-zero emissions. Read more here.
OPPORTUNITIES
India 🇮🇳 and Japan 🇯🇵 signed their first international agreement under Article 6 of the Paris Agreement. The partnership, via the Joint Crediting Mechanism (JCM), will allow GHG emission reduction projects to be carried out in India, generating internationally recognized credits (ITMOs). These credits can be used in the Japanese carbon market GX ETS, helping Japan meet its climate goals. The agreement, which you can download below, marks a new phase of cooperation between the two countries and paves the way for companies, governments, and investors who want to make the climate transition really happen.
Want to learn more? 📅 Join the IETA webinar on September 12th, featuring representatives from the governments of India and Japan, as well as private sector leaders. This is a unique opportunity to understand the details of the agreement, discover business opportunities, and connect with those who are making it happen.
🇺🇳 Stepping stone for the Africa Climate Summit and COP30. From September 1 to 6, 2025, Climate Week in Addis Ababa 🇪🇹 will bring together negotiators with implementation leaders in governments and the real economy, as well as strategic financiers—such as development banks, businesses, civil society, and indigenous peoples. To read more, click here. And to watch live, here's the link.
🌍 VCMI launches the Carbon Markets Access Toolkit. This guide helps developing countries access carbon markets with integrity, aligning climate finance with national targets and the Sustainable Development Goals.
EVENTS
🇪🇹📍September 8th to 10th, Africa Climate Summit (ACS2). Addis Ababa, Ethiopia. Discussion of various topics also in preparation for COP30. Click here to learn more.
🇲🇽📍September 10 and 11, Mexico Carbon Forum 2025, at the Expo Tampico Convention Center in Tamaulipas. Details of the fifth edition of the event are available here.
🖥️📍September 17, Countdown to CBAM 2026: How Businesses and Industries Are Getting Ready. OPIS experts detail the effects of CBAM on carbon trading and pricing, with guidance for maintaining competitiveness under the new rules.
🏴📍September 17, Ethical Finance Global 2025: Retreat, Recalibrate, or Revitalise? In Edinburgh, Scotland.
🇺🇸📍September 22, 2025 Forbes Sustainability Leaders Summit. Online or in-person in New York. More information here.
🇺🇸📍September 21-28, Climate Week NYC 2025. Learn more here on the official website.
🇧🇷📍September 26. Visit to Aquapolo Ambiental, one of the largest water reuse projects in South America. Organized by IBGC - Brazilian Institute of Corporate Governance. Details 👉here.
🇧🇪📍September 29–October 3, European Hydrogen Week #EUH2Week2025. In Brussels, Belgium. Click here for the program and here to register.
🇧🇷📍October 7th and 8th, SAE Brazil 2025 Congress. In São Paulo.
🇧🇷🌳 October 14-16, Carbon Market: The Benefits for the Forestry Sector - 5th Symposium on Forest Sciences of Espírito Santo, Brazil. By the Federal University of Espírito Santo. Registration here.
🇸🇬📍October 16-17, Singapore Carbon Market & Investor Forum. By the Carbon Market Institute.
🇿🇦📍October 21-23, Carbon Markets Africa Summit (CMAS). Johannesburg, South Africa.
🇬🇧🖥️📍October 30, IFRS Sustainability Symposium ‘Pathways to adoption’. Online or in person at Convene Sancroft, St. Paul’s, London.
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