We see the carbon credit market grow and prices rise. What is causing this?

The market for carbon credits is undergoing tremendous change. Global demand is rising, and so are prices. Why is this increase in demand expected? It is due to the following three important developments.

1. The Corporate Sustainability Reporting Directive (CSRD) requires companies to report on their sustainability performance and business operations. In the coming years, more and more companies will fall under the CSRD, and because companies subject to reporting requirements must also include data on partners in the value chain, many companies not subject to the CSRD will also be affected by the directive. Many companies are investing in reducing and offsetting their carbon emissions.

2. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) requires airlines to offset their emissions - and thus purchase carbon credits. The voluntary phase of CORSIA began in 2024. This phase will last until 2026 and there are 129 participating states. From 2027 onwards, all international flights must comply with the compensation requirements.

3. The EU climate target for 2040 has been set at a net 90% carbon reduction, 5% of which is to be achieved through carbon credits. Carbon credits have thus officially become part of the EU climate target. The EU must reduce carbon emissions by 85%, and 5% of the reduction will be achieved through the use of carbon credits. These may be used from 2031 onwards.

All these developments are happening now and will continue in the coming years. We are seeing demand on the carbon credit market increase. If your company needs carbon credits, it is advisable not to wait too long to purchase them. Even if you do not expect to need your carbon credits for some time, buy them now to stock up and use them at a later date.