5 Positive Trends For Carbon Market Participants In 2025

At Sylvera’s Carbon Markets Summit 2024, corporate sustainability experts, policymakers, and financial market leaders gathered to discuss the current landscape and future of carbon markets. 

The panels brought together a wealth of expertise from international climate bodies, government agencies, and corporate climate leaders to explore the most significant trends shaping the industry.

Here are the top five positive takeaways from our discussions to inspire carbon market participants as they plan for 2025:

For buyers establishing or refining a carbon strategy, it’s a great time to dive in. There’s now more data available than ever before, with open source resources helping make carbon markets more accessible to a wider range of participants. 

The view from regulators from the US through EU and Singapore is that thanks to major initiatives like Article 6, CORSIA, and a more established sense that CDR is both necessary and required, there are increasingly more market participants. There is movement in the spot market, and more than ever before, on the pre-issuance market. From real-time carbon tracking to emissions reduction forecasts, the volume and quality of data are improving, empowering businesses to make informed choices.

This accessibility, however, still requires companies to invest in upskilling and education to navigate this evolving space with confidence. To translate the abundance of information into effective action, organisations will benefit from ongoing investment in carbon literacy and training. 

Sean Kane from McKinsey & Co. highlighted that companies like Microsoft and Frontier are openly sharing their leading strategies, making it easier for others to follow best practices in the carbon market. Increasingly, corporations and nonprofits are sharing open-source methodologies and frameworks for carbon management. This growing library of resources simplifies market entry and accelerates learning.

Marisa Hamsik, General Manager of Carbon Markets Strategy & Market Insights at Chevron, noted a significant commitment to carbon reduction initiatives within corporates, reflecting a willingness to invest in sustainable technologies and strategies. This growing commitment from diverse sectors is seen as a promising sign for future climate action.

It’s also worth noting that this increase is also causing prices to rise, as demand outstrips supply, making early action even more critical.

The carbon market has long been likened to the ‘wild west’ – full of opportunity but somewhat lacking in standardization. That’s beginning to change, even though there’s still a long way to go. As the market diversifies with new methodologies, it’s gradually developing into a legitimate asset class with more defined parameters and controls.

New methodologies continue to emerge, enabling tailored solutions for different sectors and geographies. This diversity enriches the market while also pushing for standardization. Benedict Chia, Director General for Climate Change at Singapore's National Climate Change Secretariat, highlighted the significant increase in crediting programs, which have expanded from around 20 to over 70 standards in recent years, adding variety but also calling for clearer definitions and quality controls.

Cindy Quan, Managing Director and Global Co-Head of the Sustainable Banking Group at Barclays, drew a parallel to the early days of wind and solar energy investments in the 1990s, suggesting that the carbon market will also mature with time and equally attract widespread commitment and investment.

Governments worldwide are increasingly engaging in the VCM as both participants and facilitators, advancing the market through purchasing credits and implementing policies that support greater regulation and standardization. The discussions emphasized that efforts in carbon markets are increasingly aligning with national and international climate objectives, such as the Paris Agreement. This alignment is likely to facilitate more cohesive strategies towards achieving ambitious climate targets.

Policies like Article 6 enable governments to engage in carbon markets as buyers, contributing to climate objectives while encouraging market stability and growth. Leila Barber, Deputy Director at the US Department of Treasury’s Office of Capital Markets, noted that several US agencies have implemented principles to enhance the VCM, focusing on clear structures and protocols to support participant confidence. Initiatives include developing centralized repositories for price transparency to improve market efficiency.

By introducing taxes and market incentives, governments are further shaping the carbon market's structure. The Department of Energy in the US is looking to actively purchase removal credits, which will even be matched by some corporate actors, while the Singapore government is leading initiatives with ‘transitionary credits’ to encourage a shift away from coal in Asia.

Many companies and their boards are pursuing these efforts from an altruistic standpoint – Salesforce is a notable example of this. The panellists collectively reinforced this notion that sustainability is not just an ethical obligation, but also a business imperative. 

To drive demand in the carbon market, companies need buy-in from their boards and C-suites. Building a strong business case that highlights both tangible and intangible value from carbon strategies is critical to gaining executive support. 

When presenting a carbon strategy to your C-suite or board, it's crucial to strike a balance between skepticism and optimism. Avoid presenting an overly rosy picture, but also acknowledge that many asset classes started with uncertainty. Highlight the fact that regulations are on the horizon, and explore the business case for carbon strategies, particularly in terms of customer retention and long-term viability. 

From cost savings to reputation enhancement, carbon strategies bring a range of benefits. Presenting these in clear terms can strengthen executive commitment to sustainability initiatives. Marisa Hamsik from Chevron believes we’re starting to have more sophisticated business conversations by seeing offsets as part of the traditional investment journey from a corporate perspective. Any net zero strategy comes with costs and risks, but it’s about weighing them up. For example, internal abatement is also costly, risky, and requires thoughtful alignment. 

She emphasized that all of this needs to be managed through the lens of the value proposition back to the business, whether it's an offset or another activity. Organizations need that kind of information and expertise in order to gain confidence in their investment decisions.

Customer demand, investor expectations, regulatory pressures, and employee advocacy are converging to make carbon action a business imperative. Companies that respond effectively can stay competitive in a net-zero world. As markets and regulations evolve, the companies best prepared to integrate carbon strategies are positioning themselves to thrive.

For more insights and tips on this, read our blog: Creating a Successful Corporate Carbon Strategy

Sophisticated players are now fostering the next generation of carbon credits, including pre-issuance credits, which can be bought before emissions reductions are fully verified. This movement is helping build confidence in the market by creating innovative, forward-thinking investment opportunities. Pre-issuance represents a high-potential area of growth, giving companies a way to invest proactively in projects that will deliver verified reductions in the future.

As Sean Kane highlighted, industry leaders like Microsoft and Frontier are setting benchmarks and sharing their methodologies. This transparency helps newcomers learn from proven strategies, fostering a culture of collaboration and innovation. Through shared practices and new credit types, companies are collectively shaping the carbon market’s future, making it more accessible and scalable for all.

Market convergence is also becoming a central theme, with panellists expressing a hopeful outlook on the convergence of various carbon markets – suggesting that voluntary, international, and domestic markets can increasingly align and cooperate. This interconnectivity may lead to a more robust and standardized global approach to carbon trading in the near future. 

Martin Hession from the European Commission provided an example of the broader discussions surrounding convergence, in terms of implementing Article 6 of the Paris Agreement. He highlighted that the convergence could facilitate clearer rules and operational frameworks that would allow states and organizations to collaborate on emission reductions. Hession underscored the importance of defining roles for countries involved in carbon markets, suggesting that a more integrated approach could unlock greater collaborative efforts and more effective climate policies.

Benedict Chia also noted the diversification within the market as a sign of healthy growth, pointing out that convergence could lead to more consistent definitions and quality controls, enhancing overall market integrity.

Max Scher from Salesforce expressed optimism about the potential for carbon markets to evolve, suggesting that challenges are part of the growth process. He indicated that other markets have faced similar uncertainties but eventually found their footing, implying that the carbon market will similarly mature and improve over time.

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These trends signal a positive shift in the carbon markets as we enter 2025. With increasing support from governments, enhanced tools for strategic planning, and a growing emphasis on collaboration – companies are better positioned than ever to implement effective, scalable carbon strategies. 

Throughout the Carbon Markets Summit, the discussions underscored the potential for learning from market experiences, the importance of sharing successes and failures among peers, and collaborating with others in the space – fostering an environment conducive to growth and improvement in carbon strategies into 2025. 

In that spirit of industry learning, we hope you’ve gained some inspiration from these takeaways: Click here to watch the full selection of discussions from the summit.