Singapore has approved Verra's VM0010 Improved Forest Management (IFM) methodology for use within its International Carbon Credit (ICC) Framework. This addition brings the total to three Verra VCS forest carbon methodologies eligible under the framework, alongside VM0048 REDD+ and VM0047 ARR. Companies liable for Singapore's carbon tax can use eligible ICCs to offset up to 5% of their taxable emissions. The specific eligible methodologies vary by the implementation agreements Singapore has signed with 12 host countries.
The BRICS Business Council has proposed a voluntary carbon market framework for agriculture and nature-based solutions, aiming to direct most credit-sale proceeds to farmers. The plan, presented at the BRICS Business Council's annual meeting in New Delhi, calls for shared carbon accounting standards, digital monitoring, and integration with existing international carbon registries. This initiative seeks to overcome high MRV costs that have historically excluded smallholder farmers from VCM participation. Pilot projects among BRICS members will test system compatibility before broader implementation. The framework intends to expand the supply of nature-based credits for corporate buyers while channelling climate finance to agricultural producers.
The European Union's ESG Ratings Regulation (Regulation (EU) 2024/3005) will bring carbon credit ratings under formal EU oversight, supervised by the European Securities and Markets Authority (ESMA), starting 2 July 2026. This framework mandates governance, independence, conflict-of-interest management, and transparent methodologies for rating providers. Providers must apply for authorisation by November 2026, with decisions expected in early 2027, and an ESMA public register will list authorised entities. The regulation formalises engagement rights for project developers and aims to differentiate high-quality credits through regulated ratings.
The European Commission, EFRAG, and the Nordic Carbon Removal Association (NCRA) are developing communication guidance to incentivise corporate purchases of high-quality permanent carbon removals. This initiative follows a working session at the Carbon Removal Policy Summit in Brussels, where over 200 participants discussed challenges faced by buyers. The proposed guidance aims to address corporate concerns regarding greenwashing accusations and legal exposure, which currently deter purchases. An NCRA outlook suggests 70% of buyers would increase spending on permanent carbon dioxide removal (CDR) if such guidance were available. This effort seeks to stimulate private sector demand, crucial for scaling the European CDR industry ahead of the Commission's planned 250 million tonne CDR purchases between 2031 and 2040.
During Climate Week NYC, experts highlighted that US state-level initiatives are advancing policy and regulatory frameworks to scale the carbon dioxide removal (CDR) sector. States like California, Washington, and Massachusetts are establishing legal, financial, and market mechanisms to stimulate private capital and standardise project compliance. California has deployed dedicated funding through its Carbon Removal Innovation Support Programme, while Washington State has embedded engineered carbon management into its legal framework via the Climate Commitment Act. These subnational policy deployments provide early-stage CDR developers with predictable regulatory pathways and regional demand drivers, establishing replicable frameworks for commercial off-take contracts. This aims to bridge a projected annual supply gap of 1.2 billion tonnes by 2035 and 5.2 billion tonnes by 2050 relative to Paris-aligned targets.
Malaysia held a Business Partnership for Market Implementation (B-PMI) workshop on 20 August 2026 in Kuala Lumpur, bringing together government and private sector representatives to discuss developing a carbon credit market. The event, organised by IETA, followed the April 2026 launch of Malaysia's National Carbon Market Policy, which provides a framework for a high-integrity domestic carbon market with international linkages. Keynote speaker YB Dato Sri Arthur Joseph Kurup, Minister for Natural Resources and Environmental Sustainability, emphasised the role of carbon markets in accelerating energy efficiency and adopting low-carbon technologies. The workshop concluded that compliance requirements are emerging as the most reliable source of demand for carbon credits, presenting an opportunity for Malaysia to develop its own credit registration and issuance framework. Carbon markets are expected to contribute to Malaysia's NDC target and its ambition to achieve net-zero emissions by 2050.
Carbon Gap has launched its Policy Levers Library, an online tool mapping 165 policy instruments designed to scale carbon removal in Europe. The library organises levers into six policy families and scores each against criteria such as cost, complexity, and timeline, as well as their impact on eight barriers to scaling carbon dioxide removal (CDR). It includes 478 case studies detailing how and where specific levers are applied across seven governance levels, from international bodies to city governments. This resource aims to provide policymakers and investors with a unified view of available tools to build a gigatonne-scale carbon removal industry.
A white paper from Columbia University's Center on Global Energy Policy indicates that G20 countries, excluding the US, plus Singapore, are developing regulatory frameworks for carbon credits. The study notes a shift from voluntary standards towards government rules governing credit issuance, tracking, trading, and use. This move comes as activity in project-based carbon markets has weakened, with annual credit issuance falling from its peak. The report suggests that national registries are taking a larger role in market functions, signalling a more state-anchored era for carbon markets. This regulatory evolution could determine which credits are issued, traded, and used for climate claims.
The International Emissions Trading Association (IETA) released a vision paper, 'Canada’s Carbon Market Opportunity: A Vision for Climate Competitiveness & Growth', outlining a strategy to enhance Canada's carbon market. The paper proposes a two-track approach: building a more connected pan-Canadian carbon market through improved interoperability and linkage, and leveraging this domestic platform to access international opportunities, including Article 6 cooperation. IETA states that these measures would reduce compliance costs, increase investment certainty, and support low-carbon industries. The organisation suggests this approach will help Canada achieve both climate and economic objectives.
Canadian law firm Torys LLP released an investment primer detailing Canada's legal and financial frameworks for carbon capture, utilisation, and storage (CCUS) and carbon dioxide removal (CDR) sectors, including biochar. The report indicates that total Canadian CDR credit prepurchases increased from approximately 75,000 units in 2024 to over 700,000 units in 2026. This growth is driven by federal carbon pricing, investment tax credits, and public procurement initiatives, positioning Canada for institutional capital deployment. Despite market momentum, investors face challenges such as carbon price fluctuations, high technology scaling costs, and complex subsurface rights. The Canadian government has introduced fiscal incentives, public procurement, and revenue de-risking mechanisms, including a 2024 commitment to procure CDR services and refundable Investment Tax Credits covering up to 60 per cent of eligible capital costs.
The Western Australian Greens have publicly opposed their federal party's decision not to support a disallowance motion against the federal government's Improved Native Forest Management (INFM) carbon credit method. This method allows state governments to generate carbon credits by halting planned timber harvesting in public native forests. Critics argue these offsets do not reduce overall emissions but enable industrial emitters to compensate for fossil fuel emissions. The defeat of the disallowance motion means the INFM methodology remains active, potentially yielding up to 1.5 million carbon credits.
The New South Wales (NSW) Labor government has made the establishment of the Great Koala National Park, covering 315,000 hectares, conditional on the successful registration of a carbon project under the Improved Native Forest Management Method. This decision has sparked debate, with critics arguing against the additionality of the carbon credits, as the park was first promised in 2015 and budgeted for in 2023. The NSW government committed A$80 million in the 2023-24 state budget and a further A$60 million to support the park's creation. The Greens, despite reservations about trading carbon from existing forests, have reportedly reached a deal with Labor, allowing the carbon credit plan to proceed.
The European Commission has proposed a regulatory framework to allocate revenues from 250 million EU ETS allowances between 2031 and 2040 for permanent carbon dioxide removal (CDR) procurement. This framework restricts initial technology eligibility to Bioenergy with Carbon Capture and Storage (BioCCS) and Direct Air Carbon Capture and Storage (DACCS), excluding biochar and other decentralised carbon removal pathways. The policy prioritises industrial point-source capture and geological storage, creating a centralised procurement market. Industry experts estimate current European BioCCS deployment costs at €300-€400 per tonne, posing potential financial risks against assumed procurement price targets. This approach focuses on large-scale industrial clusters near geological storage hubs, limiting direct participation for agricultural enterprises and decentralised pyrolysis operators.
The EU's Digital Product Passports (DPPs) will become mandatory for certain products from February 18, 2027, with the central registry launched on July 20, 2026. From September 27, 2026, new EU consumer law will prohibit 'climate neutral' claims based on offsetting, making such claims an unfair commercial practice. While DPPs record a product's gross life-cycle carbon footprint and currently exclude offsets from this figure, they allow for separate reporting of environmental instruments like carbon credits. This shift means product climate claims will need to be verifiable via machine-readable passports, linking product identifiers to carbon credit retirement records for auditable transparency. Carbonmark suggests this will transform marketing adjectives into auditable line items.
A new cross-sector coalition, announced by Aliança Brasil NBS, the GCF Task Force, and ABEMA, has formed in Brazil to strengthen the country's REDD+ market and attract investment into forest conservation. The initiative will act as a permanent forum to coordinate a common REDD+ agenda, improve dialogue with the federal government, and address regulatory barriers. The coalition aims to link forest protection with economic development, particularly in the Legal Amazon, by channelling private capital and supporting local livelihoods. Its agenda includes coordinating voluntary and regulated carbon markets, preventing double counting, and integrating jurisdictional programmes with private projects. This development occurs as Brazil progresses its emissions trading system and Article 6 implementation.
Governments are increasingly influencing carbon markets, with 148 Article 6.2 agreements or memoranda of understanding signed globally. While progress is steady, only a few have resulted in actual Internationally Transferred Mitigation Outcome (ITMO) transfers, with Thailand's transactions with Switzerland being a clear example. The Clean Development Mechanism (CDM) is transitioning to the Paris Agreement Crediting Mechanism (PACM) by late 2026, raising quality concerns for projects using older methodologies. Host countries are beginning to treat mitigation outcomes as sovereign assets; Kazakhstan, for instance, legislated a 30-50% ITMO retention ratio for its own Nationally Determined Contribution (NDC). This trend, coupled with rising demand for high-integrity, authorised credits from compliance schemes and corporate net-zero commitments, is creating a supply shortage.
BeZero Carbon has released a guide detailing the European Securities and Markets Authority's (ESMA) regulations for carbon credit rating providers. The guide outlines the requirements for transparency, governance, and methodology that rating agencies must meet to operate in the EU. This publication aims to help market participants understand the new regulatory landscape for carbon credit ratings. The ESMA regulation, effective from 30 June 2024, seeks to enhance the reliability and integrity of carbon credit assessments.
In April 2026, the NGO Coalition of Liberia urged President Joseph Boakai to defer endorsement of the country's Draft Carbon Market Policy, citing a lack of genuine, inclusive, and credible national validation. Over 46,000 people have signed a petition supporting this call, organised by Rainforest Rescue. Civil society organisations remain concerned about land rights, revenue sharing, and free, prior, and informed consent for communities affected by carbon trading. The policy's development involved technical support from the Coalition for Rainforest Nations and Gordian Knot Strategies, with the African Development Bank denying claims of pressuring Liberia to pass the framework. UNDP Liberia is also working with the Carbon Market Authority to advance carbon market development, aiming to translate natural capital into sustainable economic value for communities.
Russia has approved new operating procedures for carbon unit reservation accounts within its national registry, effective from 1 March 2027 to 1 March 2033. The resolution mandates that a portion of carbon units issued for vulnerable activities, such as carbon capture and storage (CCS), must transfer to a dedicated reservation account. These reserved units cannot be sold and are only released into circulation upon verified reports of sustained project performance. This mechanism aims to safeguard against accidental re-emissions and align Russia's domestic carbon credit framework with international standards, particularly for CORSIA participation. The national carbon registry, operated by JSC Kontur, currently has approximately 37.66 million standard carbon units and 535,200 compliance units in circulation.
Sweden's Energy Agency (Energimyndigheten) has launched its second reverse auction, offering SEK 10.17 billion in investment and operational support for bio-energy with carbon capture and storage (bio-CCS) projects. The programme aims to incentivise commercial operators in Sweden to capture, transport, and permanently store biogenic carbon dioxide, supporting the country's net-zero and negative emissions targets. Winning operators will receive support payments for up to 15 years, with a requirement to deliver stored biogenic carbon dioxide within four years of receiving funding. This initiative addresses the high capital and operational costs of bio-CCS, providing financial certainty to commercialise large-scale biogenic carbon capture.
Tanzania has approved four new carbon trading projects valued at over $52.1 million, anticipating more than $4.2 million in government proceeds from credit sales. These projects, implemented by Burn, UpEnergy, Water Mission, and Bridge Carbon, are expected to generate 4.2 million tonnes of carbon credits for trading under Article 6 of the Paris Agreement. They focus on clean cooking and water access, aiming to distribute over 900,000 clean cookstoves and provide safe water to more than one million households. The initiatives are projected to cut greenhouse gas emissions by 1-2 million tonnes of CO2e annually. Tanzania has also established a National Carbon Monitoring Centre and strengthened regulations to ensure greater transparency and national benefit from carbon trading.
Zambia officially launched its national carbon registry on 7 August, designed to enhance oversight of carbon market activities and prepare for increased participation in international trading under the Paris Agreement. The digital platform, developed with support from the SPAR6C programme, integrates with the country's monitoring, reporting, and verification (MRV) system to improve carbon accounting accuracy and prevent double counting. It will register and manage mitigation activities, issue and track Internationally Transferred Mitigation Outcomes (ITMOs), and support reporting for Article 6 transactions. This makes Zambia one of the first countries to develop a customised digital registry fully aligned with Article 6. The system aims to increase transparency for project developers, government authorities, and the public, with future updates planned to incorporate voluntary carbon market projects.
The German government is finalising a national strategy on negative emissions to establish a legal and operational framework for carbon dioxide removal (CDR) technologies, including biochar. Mandated by the national Climate Action Law, the strategy outlines target trajectories for technological carbon sinks through 2045 to compensate for hard-to-abate residual emissions. The environment ministry plans to introduce binding targets for technological carbon sinks for 2035, 2040, and 2045. A dedicated public subsidy programme will launch in 2027 to finance pilot and demonstration facilities, alongside market incentive mechanisms. This initiative aims to bridge the financial gap for CDR developers and integrate technological removals into Germany’s broader climate strategy.
Türkiye, Ghana, and Luxembourg have joined The Coalition to Grow Carbon Markets, increasing its membership to 14 governments. The Coalition, co-chaired by the UK, Singapore, and Kenya, aims to scale high-integrity carbon credit markets. This expansion signals growing political support for unlocking capital to drive climate-positive growth and sustainable development.
The Capital Regional District (CRD) in Canada received $7 million in federal funding to develop a facility converting municipal biosolids into biochar. This investment, from a national infrastructure fund, will support engineering and regulatory planning for a dedicated conversion plant in Greater Victoria, British Columbia. The project aims to manage wastewater residual solids, which currently pose environmental risks, by converting them into stable biochar for long-term carbon sequestration. This initiative establishes a scalable precedent for Canadian municipalities integrating wastewater treatment with carbon mitigation.
US Representatives Paul D. Tonko and Scott Peters, alongside Senators Sheldon Whitehouse and Chris Coons, reintroduced the Carbon Dioxide Leadership Act. This bicameral bill mandates the US Department of Energy (DOE) to procure verified carbon dioxide removal (CDR) services, including direct air capture and other durable, technology-based solutions. The legislation aims to establish a federal procurement market for CDR, addressing the lack of predictable demand and market frameworks for nascent technologies. It requires competitive procurement contracts with escalating annual volumes and declining per-ton price ceilings, incentivising cost reductions and supporting commercialisation. The Act also mandates rigorous measurement, monitoring, reporting, and verification (MMRV) standards and includes set-asides for newer CDR technologies.
Representatives Tonko and Peters and Senators Whitehouse and Coons reintroduced the Carbon Dioxide Removal Leadership Act (CDRLA) this week. The bill proposes a federal carbon removal purchasing programme with specific evaluation criteria and volume targets for the next decade. This initiative aims to provide market certainty for the nascent carbon removal industry, which has relied heavily on a small pool of voluntary purchasers. The reintroduction follows the EU's plans to integrate certain carbon removal solutions into its Emissions Trading System, highlighting the need for US investment in carbon removal policy support.
Be Zero suggests that regulation from the European Securities and Markets Authority (ESMA) could enhance the voluntary carbon market's integrity and functionality. The organisation argues that ESMA's oversight, typically applied to financial markets, could bring much-needed standardisation and transparency to carbon credit trading. This regulatory framework could address current market fragmentation and foster greater investor confidence. Such a move would align the VCM more closely with established financial instruments, potentially increasing its scale and effectiveness in climate action.
The European Union has proposed integrating certified permanent carbon removals, including biochar, into its Emissions Trading System (ETS) starting in 2030. This regulatory shift aims to create compliance-driven demand for carbon removal solutions, moving them from voluntary markets into a legally binding framework. The proposal leverages the Carbon Removals and Carbon Farming Certification Framework (CRCF) to establish rigorous certification protocols for permanent storage. Industry experts, such as CarbonConnect GmbH, suggest this could significantly boost the commercial viability of hemp-derived biochar. If adopted, the framework will establish standardised market demand for certified permanent removal suppliers.
France's Label Bas Carbone (LBC) scheme, launched in 2018, has certified over 600 forestry and agriculture projects by 2026. The programme underwent significant reforms in 2025 to align with the EU's Corporate Sustainability Reporting Directive (CSRD) and the Carbon Removals Certification Framework (CRCF). LBC credits, averaging €32 per tonne CO2e, are considered audit-ready for CSRD's ESRS E1 standard due to national oversight and a structured retirement mechanism. Notable projects include Reforest'Action, Terra Fertilis, France Valley's Carbon and Biodiversity Fund, ONF's reforestation portfolio, and France Carbon Agri Association.
More than three-quarters of over 1,500 legacy carbon projects seeking to transition from the Clean Development Mechanism (CDM) to the Paris Agreement Crediting Mechanism (PACM) failed to secure host government approval by the June 30 deadline. China and India, hosts of two-thirds of the applicants, approved none of their projects, preventing over 900 million potentially outdated credits from entering the new market. Brazil, however, approved nearly all 92 of its projects, primarily hydropower, landfill gas, and wind farms. This outcome is seen by researchers as a positive development for the maturing carbon market, reducing 'hot air' from the previous system. Projects still require further documentation and final approval from the Article 6.4 Supervisory Body to issue credits.
Most older carbon credit projects, often termed 'zombie credits', will not transition to the new UN carbon market. This development follows a lack of participation from major emitting nations, including China and India, in the new market mechanism. The exclusion alleviates concerns among environmental groups regarding a potential influx of credits from projects with questionable environmental integrity. This move establishes a precedent for stricter quality control within the emerging UN carbon market.
The European Commission has reversed its plan to impose stricter quality standards on aviation carbon credits for Phase 1 (2024-2026) of CORSIA, a concession to member states and industry. The revised approach, confirmed in Climate Change Committee meeting minutes, maintains tougher requirements for Phase 2 (2027-2035). This change removes provisions that would have barred Phase 1 credits from High Forest-Low Deforestation projects and those displacing non-renewable biomass. Market participants had anticipated this move due to the limited time remaining in Phase 1 and constrained credit supply. Traders expect a fragmented market, with EU-eligible CORSIA credits potentially trading at a $5-6 per tonne premium over non-EU eligible ones for Phase 2.
Carbon Gap submitted two responses to the European Commission's call for evidence on the post-2030 climate framework, advocating for binding national targets for land use and permanent carbon dioxide removal. The organisation recommended that the EU plan for full domestic delivery of its 90% emissions reduction target, reserving international credits for ambition beyond this level or as a safety buffer. Carbon Gap also proposed that such credits be procured centrally rather than unilaterally by Member States. The submission challenges the assumption that international credits are always cheaper than domestic action and suggests that the 5% ceiling in the European Climate Law for credit use should not be a fixed target.
Carbon Gap and Carbon Management Europe have published a discussion paper exploring an EU Carbon Removal Buyers' Club to aggregate demand and stimulate private investment in European carbon dioxide removal (CDR) projects. The paper, released ahead of the European Commission's first CRCF Days, suggests that a coordinated group of companies committing to purchase verified carbon removals could address the lack of credible purchasing commitments hindering project financing. Drawing from a multi-stakeholder workshop, the analysis maps design options for such a club, proposing alignment with the Carbon Removals and Carbon Farming Regulation (CRCF). The initiative aims to reduce investment risk and support multiple near-commercial projects within EU and EEA jurisdictions. This proposed club would function as a coordination platform, providing common standards and aggregated demand signals.
Bernard de Wit, founder of Regreener, outlined the potential impact of SFDR 2.0 on carbon removal markets. His analysis focuses on how asset managers should approach carbon removals under the updated Sustainable Finance Disclosure Regulation. De Wit regularly assesses carbon projects and advises businesses on sustainability goals.
The EU's Carbon Removals and Carbon Farming (CRCF) framework, established by Regulation (EU) 2024/3012, will see its first certified carbon removal units reach corporate buyers from late 2027 or early 2028. The CRCF is a voluntary, EU-wide certification framework that sets a harmonised quality baseline for carbon removals and carbon farming activities, certifying against QU.A.L.ITY criteria (Quantification, Additionality, Long-term storage, Sustainability). It covers permanent removals (e.g., DACCS, BECCS, biochar), carbon farming with a minimum 5-year permanence, and carbon storage in products with a minimum 35-year permanence. The framework does not replace existing standards but runs alongside them, with recognition decisions for established voluntary standards expected mid-to-late 2026.
Indonesia approved four forest carbon projects on 6 July 2026, covering 225,000 hectares and expected to yield over 30 million carbon credits through Verra and Plan Vivo. This marks the end of a moratorium on international standard credit issuance that began in 2021. Concurrently, Indonesia signed an MOU with Singapore for Article 6 collaboration and launched its national carbon registry (SRUK) on 9 July 2026. The SRUK is designed to ensure traceability, prevent double counting, and connect with international systems, making it the first national registry aligned with the G20’s Common Carbon Credit Data Model.
The Government of Misiones, Argentina, officially adopted a Memorandum of Understanding (MOU) with Verra to enhance its engagement in carbon markets. Under the MOU, Verra will provide capacity-building, knowledge-sharing, and training on topics including the Verified Carbon Standard (VCS) Programme, Jurisdictional and Nested REDD+ (JNR) Framework, and Article 6.2. This agreement follows Verra's recent approval of Misiones' government-led forest carbon programme, the first jurisdictional REDD+ programme certified under Verra's JNR Framework. The collaboration aims to strengthen Misiones' technical and institutional capacities for forest conservation and climate finance. Pamela Kruszelnicki of Misiones' Ministry of Treasury stated the MOU reaffirms Misiones as an international example in climate action solutions.
The Coalition to Grow Carbon Markets unveiled a new policy playbook at London Climate Action Week to guide national policies and market functioning. The playbook aims to accelerate demand for high-integrity carbon credits among the Coalition's 11 country members. This initiative provides direction for investors, buyers, and other market stakeholders to increase carbon credit purchases. The announcement comes as carbon credit markets show strong momentum and signs of maturation in 2026.
IETA has joined the Supporting Alliance for CORSIA Eligible Emissions Unit Supply, an initiative led by IATA, to increase the availability of high-integrity carbon credits for the Carbon Offsetting and Reduction Scheme for International Aviation. The Alliance, now comprising 50 entities including five governments, aims to address the projected 200 million tonne compliance obligation for CORSIA's Phase 1, which concludes in 2028. As of May 2026, only 36 million tonnes of eligible supply are available, highlighting a significant market shortfall. IETA will provide technical support to scale the market and strengthen supply, particularly by facilitating host country authorisations for CORSIA units. This collaboration seeks to resolve legal and regulatory uncertainties currently hindering both supply and demand in the CORSIA market.
IETA's Brazil Initiative launched a new working paper, 'Carbon Market Frameworks for Brazil 2.0', at the Latin America Climate Summit 2026. Developed with EOS Consulting, the paper quantitatively assesses four pathways for integrating Brazil's Emissions Trading System, voluntary carbon markets, and Article 6 mechanisms. It explores macroeconomic, environmental, and social impacts, including a new hybrid scenario combining industrial decarbonisation and nature-based solutions under an Article 6 framework. The analysis suggests strategic international carbon market engagement could attract investment, support hard-to-abate sectors, and aid Brazil in achieving its NDC cost-effectively. The report also addresses market integrity, corresponding adjustments, ITMO authorisation, and long-term governance.
Climate-vulnerable nations from Africa, Asia, the Caribbean, and Latin America convened at the IMF-World Bank Spring Meetings to highlight their carbon market initiatives. Bhutan launched a Carbon Market Information Platform, Ghana detailed projects expected to generate 17 million carbon credits, and the Philippines adopted a Roadmap to Readiness for its voluntary forest carbon market. Barbados's Sherpa, Ambassador H.E. The Most Honourable Elizabeth Thompson, stated carbon finance could 'unlock an additional US$20 billion by 2030' for these countries. Pakistan also announced its first carbon market deal, and the Philippines will host a regional Carbon Market Forum in September 2026.
The VCMI has published an article exploring how high-integrity carbon markets could finance climate-resilient agriculture in Latin America and the Caribbean (LAC). The region received only 5% (USD 6 billion) of global climate finance for agrifood systems between 2021-2022, despite agriculture accounting for 55% of its emissions. The VCMI suggests that carbon markets could help bridge the annual USD 160 billion funding gap needed through 2050. It recommends a shift from fragmented project-by-project development to structured investment platforms, supported by government-led frameworks.
On 20 January 2026, Indonesia's Ministry of Forestry announced its membership in The Coalition to Grow Carbon Markets. This addition brings the Coalition, co-chaired by the UK, Singapore, and Kenya, to 11 member governments. The Coalition focuses on scaling high-integrity carbon credit use to finance nature-based solutions and support climate goals. Indonesia's participation represents its forest and nature-based solutions sector within the group.
Chile's carbon tax, introduced in 2017 and expanded in 2020, applies to facilities emitting over 25,000 tCO2e annually at a rate of US$5 per tonne, with indicative targets to rise to US$35/tCO2e by 2030 and US$80/tCO2e by 2040. Regulated entities compensated over 4.4 million tonnes of CO2 in 2024 using domestic credits from approved standards like Verra and Gold Standard, which must be less than three years old. The country has also approved its first Article 6.2 project, a biomass initiative with Switzerland, and established cooperation with Japan and Singapore for ITMO transfers. Chile is developing a national carbon registry and an Emissions Trading System to support its 2050 carbon-neutrality target. Non-compliance with the carbon tax can result in fines up to 5% of annual revenue or temporary activity suspension.
Compliance and voluntary carbon markets are increasingly converging, with hybrid models allowing regulated entities to use voluntary credits for compliance obligations. Singapore's carbon tax, set to reach S$45/tCO₂e by 2026-2027 and S$50-S$80/tCO₂e by 2030, exemplifies tightening regulations driving demand. Colombia and Chile permit the use of domestic voluntary credits to offset carbon tax obligations, creating a price floor and stable demand for local project developers. This integration is reshaping climate finance by linking regulatory stringency with the availability of voluntary instruments. The trend suggests a shift towards a 'Verified Carbon Market' with enhanced integrity and transparency.