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Voluntary carbon markets

Voluntary carbon action

Unlike compliance markets, where emissions must be covered by regulated carbon allowances, the voluntary carbon market (VCM) is a collection of decentralised markets where organisations voluntarily buy carbon credits in order to demonstrate that they are taking action to manage their carbon footprint.

Credits are created by a wide variety of projects, using different methodologies and with different aims. Each carbon credit represents one metric tonne of carbon dioxide or an equivalent greenhouse gas that has not been emitted into the atmosphere, or has been permanently captured and stored. They are commonly referred to as ‘avoidance’ or ‘removal’ credits.

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New opportunities in voluntary carbon markets

Voluntary carbon markets have a turbulent history, but recent initiatives to improve the quality of carbon credits are driving renewed confidence in the sector. Redshaw Advisors has identified several key trends that are expected to shape the VCM in the near-term. Expand each section to find out more.

Demand remains consistent

While trade volumes are down from their 2021 peak, the price of voluntary carbon credits has been steadily rising, and relatively consistent levels of retirements suggest that non-speculative demand remains steady.

Carbon credits are increasingly expected to be included in a variety of compliance schemes

In its 2026 EU ETS review, the European Commission proposed to integrate EU-CRCF credits (a voluntary certification framework for permanent carbon removals, carbon farming and carbon storage in products) within the system, as well as potentially expanding the role that credits issued under Article 6 of the 2015 Paris Agreement could play. Meanwhile, the second phase of CORSIA, a scheme to tackle international aviation emissions, is expected to support the introduction of more high-quality credits and the SBTi's Corporate Net-Zero Standard Version 2.0 is likely to soften its position on the use of credits to meet net zero targets. This compliance-led demand will build on current demand from voluntary carbon action.

Transparency and integrity will take centre stage

The Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCP) certification scheme is building trust in voluntary carbon markets and sets a global benchmark for high-integrity carbon credits. There is also increasing use of ratings agencies to assess the quality of carbon credit-issuing projects.

Trends in credit demand are changing

The demand mix between reduction, removal and avoidance is changing. Credits with multiple dimensions are becoming more valuable and buyer preferences for more recent vintages is on the rise.

Increased market sophistication is reflected in the rise of credit insurance

With specialist insurance providers now offering project insurance to cover future invalidation risk (particularly around nature-based projects), the VCM is seeing new and sophisticated financial risk management instruments enter the space for the first time. This further increases buyer confidence and underpins demand.

How Redshaw Advisors can help

Whether you buy and sell credits on the secondary market, invest in projects directly, are a project developer, or negotiate direct offtake agreements from project developers, Redshaw Advisors can help you to make confident carbon decisions.

Credit suppliers and project developers

Redshaw Advisors helps credit suppliers and project developers structure their route to market. Whether you’re at the start of your go-to-market journey or already negotiating directly with corporate off-takers, Redshaw Advisors can help you identify the route forward.

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Credit buyers

Redshaw Advisors acts as a trusted advisor to credit buyers. We can align you with projects that reflect your values and objectives while helping you to navigate the question of integrity and quality. We work with you to minimise any financial and reputational risk and provide transparency when negotiating direct relationships with key projects.

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Credit portfolio managers

While demand for newer credits and accreditations is rising, Redshaw Advisors can help portfolio managers of existing carbon credits find suitable buyers when rebalancing their portfolio.

About Redshaw Advisors

We’ve been active in voluntary markets for two decades. We have long-standing relationships with trusted partners and a track-record in market participation.

Our advice to clients is truly independent as we’re not project developers nor do we invest directly into projects.

Through our co-ownership of Carbon Forward (the world’s largest carbon markets conference) our clients benefit from our position at the centre of the global carbon conversation. Our approach builds on current market best practice.

With deep experience in compliance markets, including the EU and UK ETS, we are well placed to help clients navigate the growing role of voluntary credits within these frameworks.

Award winning commitment to client value

Our approach is grounded in expert market intelligence and advanced risk analytics and modelling, with a clear focus on delivering client value.

These awards reflect the strength of our expertise, the quality of our execution, and the confidence we enable in every carbon decision that our clients make.