Carbon markets forecast to transform in 2025.

Climate Insider recently reached out to three Canadian experts, including Invert CEO, Andre Fernandez, to discuss trends and predictions for carbon markets in 2025. Alongside Andre, Charlie Renzoni, Vice President of Carbon Markets, Deep Sky and Timothy Bushman, Director of Policy and Research, Carbon Removal Canada shared their thoughts on how they see carbon markets evolving over the next 12 months and the role of integrity, policy, and technology in driving the transformation.

Covering the topics of market trends & growth, regulatory & policy shifts, voluntary vs. compliance markets, technology & innovation, and global participation & equity, the respondents highlighted several emerging and established trends.

• While VCM growth remains slow, there is a growing focus on integrity over volume,? translating to a more sophisticated, formalized and stable market.?
• The operationalization of Article 6 and the expansion of compliance markets will shift the supply and demand paradigm leading to higher carbon credit prices.
• The boundaries between voluntary and compliance markets will continue to blur as unified standards and enhanced scrutiny push the market towards compliance-ready credits.
• Technologies, like AI, will continue to drive greater transparency and trust into carbon markets, while technologies, like blockchain, remain unproven as adoption has been slow and limited.?

At Invert, we strongly believe the world is at an inflection point with 2024 kicking off a momentum for global carbon markets and climate commitments that no change in government or policy can slow.

Invert Insights.

As we move into 2025, we anticipate continued growth of carbon markets, rising carbon prices, and increasing scrutiny on credit quality. However, challenges remain in scaling supply and ensuring market integrity. Here are our three predictions for the year ahead:

??There will be a significant upward trend in carbon pricing.

• Compliance markets will likely see higher carbon prices, driven by tightening cap-and-trade systems and carbon tax adjustments (e.g., Canada’s rising federal carbon price).

??There will be notable expansion and integration across carbon markets.?

• More jurisdictions will implement compliance carbon markets, potentially increasing demand for jurisdictionally aligned voluntary credits.
• Corporate buyers will shift toward long-term offtake agreements for high-quality credits.
• Blending of voluntary and compliance mechanisms could create new opportunities but also regulatory uncertainty.

??Challenges will persist around integrity, supply, and policy uncertainty.

• Stronger MRV & regulatory oversight (ICVCM, SBTi, CORSIA) will drive a flight to quality, challenging some existing crediting methodologies.
• Supply constraints may emerge for high-quality removal credits, leading to longer development timelines and price volatility.
• Policy shifts and geopolitical uncertainty (e.g., U.S. election outcomes, EU CBAM expansion) could impact both voluntary and compliance market stability.

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