Pressroom  >  Press Releases  >  Report: The Voluntary Carbon Market Contracted in 2023, Driven by Drop-off in Transactions for REDD+ and Renewable Energy

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30 May 2024: New research published today shows the voluntary carbon market (VCM) contracting for the second year in a row. However, the report’s findings also illustrate an increasingly complex landscape within the VCM, with some market segments showing growth as others fell.

Market analysis from Ecosystem Marketplace finds that overall market transaction volume declined 56 percent from 2022-2023. While the market saw a slower year overall last year than in the banner years of 2021 and 2022, not all project categories followed that trend–underscoring the complexity of a market that has matured considerably as voluntary climate ambition has proliferated in the private sector.

Key findings from the report:

  • In 2023, the volume and value of the voluntary carbon market contracted for the second year in a row from its 2021 peak, with a 56 percent year-on-year decline in the volume of reported transactions. The total reported transaction value of the VCM was $723M USD. Disclosures from market participants indicate that negative media coverage and a pause in purchasing as buyers awaited guidance from integrity initiatives were key reasons for a pullback in buyer investment.
  • Within the Forestry and Land Use category, REDD+ credits, the most popular project type, lost 62 percent of their value year-over-year, with the average price of credits falling 23 percent. 2023 saw a rash of negative media coverage of REDD+ which likely contributed to the decline; many credit buyers may have also paused purchasing as they awaited updates to a widely used project methodology. The pullback largely affected project developers in Asia, Latin America, and the Caribbean, where the majority of these projects are located.
  • Renewable Energy credit transaction volume also declined relative to 2022, though less than the market as a whole. That drop seems to be a natural consequence of a decline in the supply of these credits. The report finds that credit buyers are also moving away from projects with weaker additionality, such as international clean infrastructure financing.
  • The volume of transactions in the Energy Efficiency, Agriculture, and Household/Community Devices carbon project categories all increased in 2023.
  • The market share for projects delivering co-benefits for nature and communities continues to grow, with 28 percent of transactions in 2023 supporting from projects with verified “beyond carbon” environmental and social co-benefits, such as preserving and restoring biodiversity, contributing to water security, or supporting sustainable local economies.
  • On average, buyers paid $6.53 per ton CO2e for carbon credits in 2023, a slight drop from 2022. Average credit prices in 2023 were higher than in any year before 2022. As of early 2024, prices appear to be rebounding from this dip.
  • The publication of the ICVCM’s Core Carbon Principles and the launch of VCMI’s Claims Code contributed to buyer confidence in market quality and integrity. But delays in implementation of these initiatives and a lack of guidance from the Science-Based Targets Initiative (SBTi) on the use of carbon offsets to meet corporate net-zero goals was cited by many respondents as a prime factor keeping buyers on the sidelines for much of late 2023.

Alex Procton, report author and Manager of Data Solutions and Insights at Ecosystem Marketplace, says,“The entire voluntary carbon market is going through a transition focused on project additionality, integrity, and environmental and social co-benefits. As a result, we are seeing shifting supplies of credits from different project types and regions of origin. It’s essential to pay attention to the green shoots today to understand which kinds of carbon market projects will be the most important for the climate action of tomorrow.”

Michael Jenkins, President and CEO of Forest Trends, says, “Unfortunately it was a tough year for many carbon project developers, particularly those focused on avoiding deforestation – who are found mostly in the Global South,. The voluntary carbon market is still the best tool we have to channel private finance to the communities around the world calling for more resources to better protect nature. The science is telling us very clearly that we will fall short on climate goals if we fail to step up on natural climate solutions.”

Mark Mondik, VP of Carbon Markets at 3Degrees, says, “As the market navigates new standards, new project types, and new regulations, we are witnessing a shift in demand toward premium-priced credits with stronger environmental claims.”

Dee Lawrence, Founder and Director at High Tide Foundation, says, “It’s frustrating to see that in 2023, the hottest year on record, we saw the voluntary carbon market drop 56 percent, and roughly $1.1 billion in finance for climate mitigation evaporate, compared to the prior year. To put it bluntly, our global climate targets just got a little farther out of reach.”

Will Turner, Ph.D., Senior Vice President, Natural Climate Solutions at Conservation International, says, “It is encouraging to see that credits from Forestry and Land Use projects are still popular and categorically had the highest number of retirements. This is a sign that fundamental demand is being driven by buyers that value nature’s role as an essential climate solution. We’re also seeing an encouraging trend toward high-integrity credits being called for by standards bodies and demanded by responsible buyers. Science-based use of credits within broader corporate climate strategies will continue to be a powerful tool to address the climate crisis at the speed and scale required.”

Maximiliano Bernal Temores, Carbon Markets Assistant, Impact Finance & Markets at The Nature Conservancy, says, “If the VCM hopes to increase its mitigation potential and the value it provides to ecosystems and communities, especially those hosting NCS projects, it is imperative that the credit supply shows its integrity by shifting towards methodologies that use the best available science and social safeguards. Ecosystem Marketplace’s SOVCM report and recent advanced market commitments like the Symbiosis Coalition show buyers are looking for signs of high integrity such as impactful co-benefits, airtight additionality, and robust durability. Crediting standards and project developers must incorporate best-science practices like dynamic baselines and remote sensing to ensure the VCM, especially nature-based credits, meets buyer expectations. “

The full report, State of the Voluntary Carbon Market 2024: On the Path to Maturity, can be downloaded here.


Ecosystem Marketplace is an initiative of the non-profit organization Forest Trends, and a leading global source of information on environmental finance, markets, and payments for ecosystem services. As a web-based service, Ecosystem Marketplace publishes newsletters, breaking news, original feature articles, and annual reports about market-based approaches to valuing and financing ecosystem services. EM believes that transparency is a hallmark of robust markets and that by providing accessible and trustworthy information on prices, regulation, science, and other market-relevant issues, it can contribute to market growth, catalyze new thinking, and spur the development of new markets and the policies and infrastructure needed to support them. Ecosystem Marketplace is financially supported by a diverse set of organizations, including multilateral and bilateral government agencies, private foundations, and corporations involved in banking, investment, and various ecosystem services.