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Key takeaways:
Last month Fastmarkets launched the world’s first weekly project-type carbon price assessments based on BeZero ratings. This move reflects that the market finally has transparent pricing that shows what premium buyers should pay for high quality credits – solving a major industry pain point. By combining BeZero’s ratings with project types (REDD+, ARR, IFM), we’re revealing exactly how credit quality drives price.
Our new BeZero rated project type assessments reveal approximately 50% price increases between each rating band from C to BBB for REDD+ projects. However, project specific factors continue to create pricing anomalies. Certain projects trade above or below their rating implied values due to tight supply, over crediting concerns, specific domestic demand patterns, or valuable co-benefits.
We have seen increased demand for the highest rated REDD+ projects this year, with vintage 2020 Katingan credits rising from $4.50-5.00 per tCO2e at the start of the year to over $8 per tCO2e recently. The project was rerated higher to AA by BeZero earlier this year.
At Fastmarkets, we are conducting a deep dive analysis on REDD+ and ratings to map these pricing anomalies and identify which factors most strongly override rating based valuations.
Traditional supply and demand factors still play a large part. In Indonesia where there has been a moratorium on new credit issuances over the past few years, supply is artificially constrained, supporting prices of AA rated projects, such as Katingan.
Buyers are also showing an increasing preference for higher rated REDD+ credits as they look towards higher integrity projects. AA rated projects have an average lifetime retirement rate of around 85%, but that falls to just under 50% for D rated projects. The average REDD+ retirement has also increased to just below a BBB rated credit so far in 2025 from between a B and BB in 2018.
Sam Carew, Strategic Markets Editor at Fastmarkets Carbon says: “While ratings provide crucial price discovery guidance for market participants, the voluntary carbon market remains sufficiently fragmented that individual project characteristics and regional demand patterns can override rating based valuations. The Indonesian moratorium and strong retirement rates for AA projects like Katingan demonstrate how supply constraints and quality metrics work together to drive premiums. Buyers and sellers should use ratings as a baseline while remaining attentive to project specific market dynamics and the growing focus on credit integrity.”
Verra and Gold Standard released initial insurance criteria last week, marking a critical step for CORSIA Phase 1 (CP1) credit supply. With only one project currently CP1 eligible, buyers and sellers have been at an impasse for the past six months despite airline interest, due to supply uncertainty.
Supply has been slow to come to market because of a combination of lack of approved insurance and delays in host countries issuing required corresponding adjustments or letters of authorizations. These new guidelines look to address the former issue, although this could leave insurance providers as the new bottleneck for supply.
The new criteria open the door to potential increased supply from cookstove and other project types later this year, which could bring more active buyers to the market and break the current deadlock.
In preparation, Fastmarkets has already seen some buyers look towards forward offtake agreements for yet-to-be CP1 tagged credits around $15-16 per tCO2e. However, these deals carry some risk as it is not guaranteed the projects will achieve the necessary requirements for eligibility. Most of these deals are looking to structure on a “delivery on eligibility” basis. The price of these forwards is also well below current spot prices of $22-23 per tCO2e, highlighting buyers are expecting increased supply and greater variety of eligible credits to potentially weigh on pricing.
Sam Carew, Strategic Markets Editor at Fastmarkets Carbon says: “The insurance criteria release represents a watershed moment for CORSIA market liquidity. However, forward pricing at $15-16 per tCO2e versus $22-23 spot suggests buyers expect significant supply increases from cookstove projects to weigh on pricing. Market participants should prepare for potential supply increases in Q3/Q4 2025, while recognizing that insurance providers may become the next bottleneck even as these criteria unlock the pipeline.”
The first nature-based carbon credits with CCP certification have entered the market following ICVCM’s approval of ACR’s forestry methodology. So far, prices haven’t moved much. Buyers are questioning whether these credits, already trading at $30 per tonne, deserve an additional premium. Previous CCP-certified credits (from landfill and industrial projects) saw brief price bumps that quickly faded. However, the market is changing. More buyers now require CCP certification in their tenders or specifically exclude credits that failed ICVCM review. This trend suggests non-certified credits may soon trade at a discount.
It’s worth noting that the bulk of market surplus is in non-CCP approved credits at the moment, leaving a tighter ‘high quality’ market.
Growing market support for CCPs is emerging through recent RFPs that either require CCP tags as minimum criteria or exclude ICVCM rejected credits, suggesting non-CCP tagged credits may trade at a discount.
Sam Carew, Strategic Markets Editor at Fastmarkets Carbon says: “The carbon market is splitting into two tiers based on CCP certification. While we haven’t seen clear price premiums yet for nature-based credits trading at $30 per tonne, more institutional buyers are demanding CCP certified credits in their purchasing requirements and systematically excluding non-certified options. With the bulk of market surplus in non-CCP approved credits, this shift suggests that credits without CCP certification could become harder to sell and may trade at lower prices in the coming months.”
Interested to learn more about carbon credit ratings? Access price data and trusted insights from Fastmarkets.