If I was writing this piece midway through 2025, I would have observed that the mood in the carbon market felt low.
Trump’s withdrawal from the Paris agreement – again – prompted uncertainty around federal support for carbon markets. Six months later, Edie reported on the huge ‘supply crunch’ impacting the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the aviation sector’s carbon offsetting scheme. Mechanisms like CORSIA are both fundamental to sector-specific emissions reductions, and often indicative of the broader market landscape.
Then the narrative, and market, shifted.
Jim Giles of Trellis wrote last month that the carbon market seems to be “emerging from its years-long slump” as buyer confidence appears, at last, to be returning to the market. During COP30 in Belém, market participants announced 1.1 billion worth of investments between November 3-21, a 42% increase on the previous COP held in Baku, Azerbaijan. According to Scheider Electric, two-thirds of sustainability professionals trust recognised VCM standards.
“Markets aren’t waiting for perfect political consensus to move forward” – Sylvera
So what does this mean for 2026? Here are our three predictions.
- Market maturation
Recent controversies forced the market to mature.
We are shifting toward more capital-intensive projects. Even nascent fields like marine CDR (mCDR) are starting to require serious infrastructure.
Market infrastructure is professionalising. The ICVCM has cemented itself as the integrity benchmark, recently granting Puro.earth full approval. Meanwhile, the SBTi is tightening its own guidance around carbon markets; its updated Corporate Net-Zero Standard just finished consultation and will be published in 2026.
What to expect in 2026: Expect this trajectory to continue – maturity equals trust. Part of the roadmap for this will include new financial instruments coming into the market to make project more bakeable and bring more liquidity into the market. Insurance and carbon pricing mechanisms will play a key role in this next year.
- Consolidation will accelerate, buyers will benefit
The decision at COP30 to finally shutter the Clean Development Mechanism (CDM) was a clear sign of where the market is heading. The CDM is the Kyoto Protocol’s crediting system – which has issued nearly 2.5 billion credits since 2001. It will cease operations by the end of 2026.
The rationale for its closure is straightforward: stop maintaining parallel systems that diffuse market focus. The Paris Agreement Crediting Mechanism (PACM) is the clear focus for the market because it addresses some of the structural flaws of the Kyoto-era CDM and is better designed for today’s net-zero economy.
What to expect in 2026: More consolidation around fewer, higher-integrity mechanisms. In December, ICROA announced it will be winding down, consolidating around bodies like the ICVCM and CORSIA instead. For corporate buyers and project developers, this represents a welcome narrowing of options. Equally, for communications, this is also a good thing. It means simpler messaging around a few frameworks.
- Government coalitions will start delivering, not just convening
Two significant government-led coalitions emerged in 2025.
The Coalition to Grow Carbon Markets, co-chaired by Kenya, Singapore and the UK issued shared principles at COP30, aimed at boosting businesses confidence in credit procurement. The Open Coalition on Compliance Carbon Markets, launched by Brazil at COP30, attracted 18 countries as members, including China, the EU, the UK, Canada, Germany and Singapore. The ambition is to establish common account standards and generate liquidity across compliance markets.
What to expect in 2026: Watch for national-level adoption of shared principles, bilateral Article 6 agreements moving form announcements to credit flows, and early signs of interoperability between previously siloed trading systems.
For Communications
Clearer frameworks mean clearer communications.
When the Coalition to Grow Carbon Markets issues government-backed principles on credit use, and the ICVCM provides quality benchmarks, businesses can point to external validation. The narrative shifts from “trust us” to “here’s the standard we meet.”
Clarity raises expectations. The era of vague offsetting claims and unqualified “carbon neutral” declarations is effectively over. Finance-focused audiences – investors, analysts, regulators – now have frameworks against which to assess corporate climate claims. Companies that haven’t aligned their carbon credit communications with high-integrity standards will find their credibility gap widening.
The convergence we saw last year went beyond market mechanics to create a communications landscape more demanding, more literate, and less forgiving of ambiguity.
Holly Edwards is associate director in Cognito’s sustainability practice based in London
