Carbon credit prices climb as buyers shift from volume to quality, Sylvera finds

Why it matters: The voluntary carbon market is splitting into two tiers. Lower-cost credits, dominated by renewable energy projects that face additionality concerns, still provide bulk volume. Higher-rated credits across forestry and agriculture categories are absorbing a disproportionate share of corporate spending. For project developers and host countries, this reconfiguration determines which projects attract capital and which face declining demand, regardless of headline retirement figures.

Who gains and who loses in a quality-driven market

The data draws a clear line between winners and losers. Developers of afforestation, reforestation, and revegetation (ARR) projects rated BBB+ earned $23.47 per tonne in Q3, nearly double the $12.80 paid for credits rated BB or below. Improved forest management showed the same pattern: $21.07 versus $12.79. Projects that can demonstrate strong additionality and monitoring are capturing a growing premium, while those that cannot are being priced closer to commodity levels.

On the corporate side, some buyers are scaling up. Yamato Transport and Corpay each retired about 2 million credits in Q3. Eni remained the largest year-to-date retiree with nearly 9 million credits through September. But Shell’s retreat is notable: roughly 496,000 credits retired through three quarters of 2026, compared with about 7 million over the same period in 2025. That divergence among major buyers signals that the market’s growth depends increasingly on which companies stay committed, and at what quality threshold.

Agriculture emerges as a diversification play

Agriculture’s share of retirements jumped from 2.55% to 7.82% in Q3, with volume more than doubling. Energy and utility companies drove part of that shift: agriculture represented 28% of their Q3 retirement mix, up from 6.8% a year earlier. The category offers corporate buyers a way to diversify beyond forestry and renewables while potentially accessing credits with measurable co-benefits in food systems and soil carbon.

This diversification matters because the renewable energy category, still 41% of Q3 retirements, is under structural pressure. Sylvera does not rate renewable projects above C due to additionality concerns, and renewables accounted for 76% of B/C/D-rated retirement volume. Full-year renewable retirements peaked at 99.7 million in 2022 and fell to 49.3 million in 2025. The category provides volume but drags down the market’s overall quality profile.

What remains unresolved

Several questions do not yet have clear answers. The ICVCM’s Core Carbon Principles (CCP) label is gaining traction as a market filter (CEEZER found a 48% price premium for CCP-labeled issuances, up from about 5% a year earlier), but coverage is still incomplete. Not all project types have been assessed, and the interaction between CCP labeling and registry-level ratings like Sylvera’s remains undefined. Until a single, broadly accepted quality benchmark exists, buyers face overlapping signals from multiple rating systems.

There is also the question of whether higher prices per credit can sustain market growth in dollar terms if retirement volumes continue to decline or stagnate. Year-to-date retirement value reached $798 million, 14% above the $697.3 million recorded through Q3 2025. But that growth depends on the willingness of a relatively small group of large corporate buyers to keep paying quality premiums. If companies like Shell continue to withdraw, the market will need new large-scale participants to fill the gap.

via CarbonCredits.com