Quality and pricing indicators that track carbon market impact

Q2 issuance quality to date fell this month to 3.8 compared to Q1, due to large volumes of cookstove project credits being issued that suffer from over-crediting risk. The year-to-date quality of issuances, however, remains higher in 2025, compared to 2024.

Retirement quality continues its slow but steady climb, reaching 3.4 for Q2 (quarter-to-date), compared to 3.1 in Q1. However, the index continues to be weighed down by low-quality purchases. Of the top ten projects with retirements, eight of them use methodologies rejected by the ICVCM.

VCM credit prices declined across most segments during the month of May, with Tier 1 (T1) credit prices falling by 5.2%, Tier 2 (T2) by 2.9%, and Tier 3 (T3) by 11.4%. Nearly all project types, from forestry and land use to household and community projects, were affected.

However, renewable energy projects experienced the most significant relative decline, weighing down the T3 price index.

Despite the broad-based price declines, T1 credits widened their price premium, averaging 45% higher than T3 prices. This was primarily due to the price stability of Landfill Gas and Ozone Depleting Substances (ODS) projects.