Voluntary Carbon Markets (VCMs) have been evolving rapidly, making headlines with groundbreaking projects and impactful collaborations. January 2025 was no exception, with major moves from Google, Microsoft, and Bhutan taking center stage.
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Google commits to large-scale biochar carbon removal
Google has made a significant impact in the carbon removal space by signing long-term offtake agreements with two biochar producers – Varaha in India and Charm Industrial in the United States. These agreements, each committing to 100,000 tCO2e of carbon removal credits by 2030, represent the largest biochar purchases to date and underscore the growing corporate interest in innovative carbon solutions.
Varaha, based in Gujarat, India, utilizes invasive plant species as feedstock, contributing to the restoration of native grasslands. The company has already issued over 25,000 tCO2e of credits through the Puro registry. Meanwhile, Charm Industrial, located in the US, uses forest thinnings as feedstock and applies the resulting physical biochar for agricultural purposes.
Google’s partnership with Charm will specifically focus on biochar credits under the Isometric Biochar Protocol. This initiative not only reflects Google’s commitment to addressing climate change but also highlights biochar as a dual-benefit solution, offering both carbon removal and enhanced soil health.
Microsoft deepens commitment to nature-based solutions
Microsoft has deepened its partnership with Re.green by signing a 3.5 million tCO2e agreement for Afforestation, Reforestation, and Revegetation (ARR) carbon removal credits over the next 25 years. This builds on a similar 3-million-tCO2e deal made in mid-2024.
Microsoft also signed a 7 million tCO2e agreement with Chestnut Carbon for ARR credits over a similar 25-year period.
Re.green is actively restoring over 33,000 hectares in Brazil’s Amazon and Atlantic Forest, focusing on planting native species to enhance biodiversity. The carbon credits are verified under the Verra registry and have recently earned an “AAe” rating from BeZero, signifying a very high likelihood of achieving the intended CO2 removal. The rating was conducted prior to the issuance of credits.
Chestnut’s ARR project is located in the Southern US and registered on the Gold Standard registry. The partnership will restore around 60,000 acres of land by planting 35 million native, biodiverse hardwood and softwood trees.
Re.green and Chestnut’s ARR projects are particularly valued for their use of native species, which aligns with the increasing demand for high-impact, verifiable carbon offsets.
These collaborations underscore Microsoft’s leadership in advancing scalable, ecosystem-focused climate solutions.
Bhutan plans corresponding adjustments for ART TREES credits
Bhutan, known as a carbon-negative country, is taking steps to monetize its carbon stocks through the Architecture for REDD+ Transactions (ART) framework. Its proposed ART TREES project (ART 128) is projected to generate up to 1.1 million tCO2e of credits over its initial five-year period (2020–2024).
Significance of corresponding adjustments:
- Bhutan plans to make credits eligible for international trading by issuing corresponding adjustments, reducing the risk of double counting.
- This would make Bhutan’s credits potentially eligible for programs like the International Civil Aviation Organization’s (ICAO) CORSIA Phase 1.
The proceeds from Bhutan’s credits will support national initiatives while maintaining its status as a global leader in climate action.
IATA’s CORSIA phase 1 auction shows initial buy-side momentum
The International Air Transport Association (IATA) wrapped up its first CORSIA Phase 1 auction in late 2024, selling eligible emissions units (EEUs) from Guyana ART TREES (ART 102) for $21.70/tCO2e. With 32 airlines participating and 11 completing purchases, the auction underscores aviation’s growing interaction with the scheme.
Plans for additional procurement events in the first quarter of 2025 and throughout the year signal continued demand for aviation-focused carbon credits.
Frontier’s $80 million investment in carbon removal projects
Frontier, the carbon demand aggregator, has signed multi-year agreements worth $80 million with CO280 and CREW Carbon, facilitating long-term investments in durable carbon removal projects. CO280 focuses on retrofitting pulp and paper mills to capture biogenic carbon, with the credits priced at $214 per tCO2e.
The captured carbon is then geologically stored for permanent removal.
CREW Carbon, on the other hand, employs innovative methods in wastewater treatment plants by adding alkaline minerals to capture CO2 as bicarbonate, which is subsequently stored permanently in the ocean. These credits were sold at $447 per tCO2e. By investing early, corporate buyers such as Stripe, H&M, and Shopify are not only securing future supplies of scarce, durable carbon credits but also enabling project developers to scale their operations effectively.
Trump administration’s environmental policy reversals impact green sectors
The inauguration of Donald Trump as the 47th President of the United States carried significant implications for climate policy and related markets. His first executive actions included withdrawing from the Paris Climate Accord and ending EPA regulations on electric vehicle emissions—moves that may deeply affect the green steel sector and renewable energy investments.
These policy reversals are expected to alter the trajectory of domestic and international carbon markets, emphasizing the importance of private-sector-led climate action.
Why stay updated on voluntary carbon markets?
Voluntary Carbon Markets are at the forefront of climate innovation, bridging the gap between corporate sustainability goals and global climate targets. Whether through biochar, ARR credits, or durable carbon removals, VCM developments are setting a precedent for high-quality, impactful climate finance.
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