Microsoft and Carbon Direct Set New Standards for Marine Carbon Dioxide Removal

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Microsoft and Carbon Direct Set New Standards for Marine Carbon Dioxide Removal

Carbon Direct and Microsoft have announced a collaboration to develop a new standard for marine carbon dioxide removal (mCDR). This standard aims to ensure that ocean-based carbon removal methods are high-quality, scientifically sound, and effective in reducing carbon dioxide from the atmosphere.

With the urgency of climate change growing, setting these standards is key. They are essential for the credibility and success of carbon removal efforts.

Carbon Direct helps companies like Microsoft, JPMorgan Chase, and JetBlue reduce their carbon footprint. The company uses science to help them set climate goals, track emissions, and reduce them. They’re also helping those businesses add carbon removal solutions to their plans, making sure their actions have a real, positive impact on the environment.

The Urgency of Marine Carbon Removal: A Vital Tool for Climate Action

The Intergovernmental Panel on Climate Change (IPCC) emphasizes that limiting global warming to 1.5°C calls for drastic reductions in greenhouse gas emissions. The agency also highlights the need to remove large amounts of carbon dioxide (CO₂) from the air. 

The ocean, covering over 70% of the Earth’s surface, plays a crucial role in this process. It currently takes in about 30% of human-made CO₂ emissions. This shows its potential as a major carbon sink. ​

Marine carbon dioxide removal uses different techniques to help the ocean capture and store CO₂ better. Two prominent methods include:​

Ocean Alkalinity Enhancement (OAE): 

This method adds alkaline substances like crushed limestone or olivine to seawater. This increases the water’s alkalinity. Higher alkalinity helps change CO₂ into stable bicarbonate and carbonate. This process traps CO₂ for a long time. 

OAE carbon removal
Source: Carbon Direct

Direct Ocean Removal (DOR): 

This method shifts seawater’s carbonate equilibrium to extract CO₂ as either gaseous CO₂ or mineral carbonates. DOR allows monitoring CO₂ accurately and removes the need for extra materials. However, it is energy-intensive and expensive because of the chemical processes used.

DOR carbon removal
Source: Carbon Direct

mCDR’s Role in Meeting Climate Goals: The Road to 9 Gigatonnes

The State of Carbon Dioxide Removal report (2nd Edition, 2024) estimates that by 2050, the world has to remove 7–9 gigatonnes (Gt) of CO₂ each year. This is essential to meet the climate goals set by the Paris Agreement. 

global carbon budget
Source: Climate.gov Figure 1. The global carbon budget for 2022 showing the approximate size of CO2 emissions sources and natural sinks compared to the projected size of the CDR sink for 2050 and 2100 needed to meet the targets of the Paris Agreement (values from Friedlingstein et al., 2022 and Minx et al., 2018).

Presently, about 2 GtCO₂ are removed each year. This mainly happens through methods like afforestation and reforestation. To bridge this gap, innovative approaches like mCDR are gaining attention.

However, scientists warn that relying on carbon removal should not detract from the imperative to reduce emissions. mCDR can help with mitigation efforts, but it can’t replace the need for low-carbon energy systems and better energy efficiency. ​

Moreover, the natural absorption causes ocean acidification. This harms marine ecosystems. Also, concerns exist about their long-term effectiveness, environmental risks, and measurement challenges.

Improving the ocean’s ability to store CO₂ using mCDR methods could help reduce these impacts and aid in stabilizing the climate. The new standard seeks to address these issues by setting clear criteria for evaluating mCDR projects.

Dr. Matthew Potts, Chief Science Officer at Carbon Direct, remarked: 

“mCDR is at a pivotal moment. Achieving high-quality outcomes requires rigorous monitoring, transparency, and scientific integrity to ensure safe and effective deployment…Given the vast spatial scale, the data-intensive nature of ocean-based carbon removal, and the deep connection between these projects and marine ecosystems, clear standards are essential for responsible development.”

As the CarbonCredits team reached out to Carbon Direct for more insights, Antaeres Antoniuk-Pablant, PhD, Senior Decarbonization Scientist, provided meaningful responses to the following questions.

Q. What are the biggest risks associated with large-scale mCDR deployment, and how do these new criteria address those challenges?

A: Human activities already impact ocean chemistry in uncontrolled ways. mCDR offers a controlled, science-based approach that may help ecosystems. The new criteria use models and in-ocean testing to track phytoplankton and marine life health. They also assess community impacts and require proactive engagement with local and Indigenous groups to ensure environmental and social responsibility.

Q. What steps should project developers take to ensure their solutions align with the latest scientific understanding and meet the high-quality standards set by Carbon Direct and Microsoft?

A. mCDR developers must follow strict environmental and carbon monitoring (eMRV/MRV), update methods with new research, and conduct baseline ecosystem assessments. Transparent data sharing and compliance with international laws are essential. Developers should also educate and consult stakeholders, ensuring their projects minimize risks and align with high-quality standards set by Carbon Direct and Microsoft.

A High Bar for Quality: The mCDR Standard Framework

To ensure that mCDR projects are effective and responsible, Carbon Direct and Microsoft have outlined specific criteria focusing on key principles, including:​

  • Environmental Integrity. Projects must demonstrably remove CO₂ without causing harm to marine ecosystems. This includes assessing potential impacts on biodiversity, water chemistry, and ecological balance.​
  • Measurement, Reporting, and Verification (MRV). Robust MRV protocols are essential to accurately quantify the amount of CO₂ removed and ensure transparency. This involves establishing baselines, continuous monitoring, and third-party verification to build trust and credibility.​
  • Durability. The sequestered carbon should remain stored for extended periods, ideally centuries or longer. Assessing the permanence of storage solutions is critical to prevent the re-release of CO₂ into the atmosphere.​
  • Social Impact. Engaging local communities and stakeholders is vital. Projects should consider social, economic, and cultural factors, ensuring that they do not adversely affect livelihoods and that benefits are equitably distributed.​
  • Transparency and Verification. Clear documentation and third-party reviews are necessary to maintain accountability.

The addendum to the 2024 edition of the mCDR criteria emphasizes improving the scientific basis for evaluating these projects. It highlights the importance of:

  • Baseline Measurements: Establishing pre-project conditions to accurately assess changes in carbon levels.
  • Leakage Prevention: Ensuring that carbon removal in one area does not lead to increased emissions elsewhere.
  • Ecosystem Impacts: Evaluating how mCDR affects biodiversity, ocean chemistry, and marine life.
  • Scalability and Feasibility: Assessing whether projects can be effectively expanded without unintended consequences.

These criteria aim to provide a framework for developing mCDR projects that are scientifically valid, ethical, and environmentally friendly.

Brian Marrs, Senior Director, Energy Markets at Microsoft, noted: 

“With rapid technological progress and increased investment, marine carbon dioxide removal has the potential to deliver durable, large-scale CO₂ removal—potentially billions of tonnes per year in the coming decades…By establishing rigorous new mCDR criteria, we aim to help project developers build high-integrity solutions that maximize both environmental and social benefits.”

Microsoft’s Commitment to Carbon Removal: A Leading Example

Microsoft has been actively investing in carbon removal solutions as part of its commitment to becoming carbon-negative by 2030. The company has signed deals for direct air capture and nature-based carbon removal. 

Microsoft 2030 carbon negative goal

In January 2025, Microsoft signed a 25-year deal with Chestnut Carbon. They will buy more than 7 million tons of carbon removal credits. These credits come from forest projects in Arkansas, Texas, and Louisiana.

In addition to forest restoration, Microsoft has explored ocean-based carbon removal methods. In March 2023, the company partnered with Running Tide to remove up to 12,000 tons of carbon through an ocean-based carbon removal system. 

These initiatives show Microsoft’s commitment to different carbon removal methods. As such, it helps build a strong carbon removal market. Partnering with Carbon Direct on an mCDR standard aligns with its goal of ensuring that carbon credits and removal projects meet rigorous standards.

The Path Forward for Marine Carbon Solutions

A standard framework for mCDR will build trust in these projects. This will also draw more investment. With better technology and research, marine carbon removal may become key in global climate plans. However, careful implementation is needed to avoid unintended ecological damage.

With this collaboration, Microsoft and Carbon Direct aim to create a science-backed, transparent approach that ensures mCDR contributes meaningfully to climate mitigation.

The post Microsoft and Carbon Direct Set New Standards for Marine Carbon Dioxide Removal appeared first on Carbon Credits.

Singapore’s $1 Billion Carbon Credit Push: A New Path to Net Zero?

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Singapore’s $1 Billion Carbon Credit Push: A New Path to Net Zero?

Singapore is actively developing its carbon market to become a global hub for carbon trading. A key step in this direction was the country’s first-ever carbon credit auction, which attracted over S$1.3 billion (around $1 billion) in bids.

A carbon credit is a certificate representing one tonne of carbon dioxide (CO2) removed from or prevented from entering the atmosphere. Companies and countries can buy these credits to offset their greenhouse gas emissions.

To support this, Singapore introduced a carbon tax in 2019. This tax encourages companies to lower their emissions by making pollution more expensive. The country also aims to be a global hub for carbon trading. It’s attracting investments and partnerships from various regions.

From Carbon Tax to Carbon Trade: Singapore’s Net-Zero Roadmap

Singapore has committed to cutting its greenhouse gas emissions to between 45 and 50 million tonnes by 2035, down from 60 million tonnes in 2030. This goal keeps the country on track for net-zero emissions by 2050. 

Singapore net zero roadmap
Source: Ministry of Sustainability and the Environment, Singapore

The government previously estimated that to meet its national climate goal of 60 million tonnes by 2030, it would need to offset about 2.51 million tonnes of carbon dioxide equivalent yearly from 2021 to 2030.

Singapore submitted its 2035 climate target to the UN on February 10, meeting the official deadline. In 2022, the country emitted 58.59 million tonnes of CO2 equivalent, about 0.1% of global emissions. The government acknowledges challenges in cutting emissions due to limited alternative energy options and technological dependence.

Singapore’s $1 Billion Carbon Credit Auction

In September 2024, Singapore made headlines with its first-ever carbon credit tender. The government aimed to buy at least 500,000 nature-based carbon credits, which would offset the same amount of CO2 emissions.

Nature-based credits come from projects that restore forests, protect ecosystems, or promote sustainable agriculture.

The tender attracted significant interest, with 17 submissions totaling over S$1.3 billion, about US$1 billion. The highest bid came from Trafigura, a global commodities trading company, at nearly S$300 million.

Other major bidders included Mercuria Asia Resources, DNZ ClimateTech (S$200,000), Temasek-backed GenZero (S$27.5 million), Shell (S$34 million), and PetroChina (S$21.8 million).

These bids show the growing demand for carbon credits as a tool to fight climate change. Globally, demand for these credits could grow 100x by 2050, per McKinsey & Company estimates. Companies and governments view carbon trading as a method to offset emissions. It also helps fund environmental projects.

voluntary carbon credit demand growth
Source: McKinsey & Company

Carbon Credits: The Green Currency of the Future?

Carbon credits help reduce emissions and support sustainability projects. Some key types of carbon credit projects include:

  • Reforestation: Planting trees to absorb CO2 from the atmosphere.
  • Forest Conservation: Protecting forests to prevent stored CO2 from being released.
  • Sustainable Agriculture: Using farming methods that reduce emissions and improve soil health.

These projects aim to help the environment and may contribute to job creation, improved air quality, and biodiversity. 

$5.6 Billion and Counting: Building a Carbon Trading Hub

Singapore is working to become a leading center for carbon trading. By developing strong partnerships and ensuring high standards, the country is attracting investments and driving innovation in sustainability.

The Economic Development Board estimates that this initiative could generate S$5.6 billion in economic value. This shows that carbon trading can serve as an environmental strategy and as a major economic opportunity.

To strengthen its carbon market, Singapore is partnering with other countries. Under Article 6 of the Paris Agreement, nations can trade carbon credits as long as they follow strict rules. These include:

  • No Double Counting: Emission reductions must be counted by only one country.
  • Environmental Integrity: Credits must represent real and measurable emission reductions.
  • Sustainable Development: Projects must benefit local communities and ecosystems.

Singapore has signed agreements with Bhutan, Ghana, Papua New Guinea, and Peru to buy carbon credits. These deals help ensure that carbon trading meets high standards and delivers real environmental benefits.

singapore carbon trading hub
Source: The Straits Times

These agreements aim to help carbon trading and create trustworthy carbon markets. These partnerships are key. They help ensure carbon credits are used well to reach global climate goals.

Singapore’s First Carbon Trade Deal with Peru

On April 1, 2025, Singapore signed a carbon trading agreement with Peru. This was its first such deal with a Latin American country. Peru’s vast Amazon forests play a key role in stabilizing the global climate, making it a valuable partner in carbon trading.

Under the agreement, Singapore can buy carbon credits from projects focused on rainforest restoration and conservation. These projects will cut emissions. They will also help local communities by creating jobs and improving access to clean water.

As part of the deal, Singapore will contribute 5% of the proceeds from purchased credits to help Peru fund climate adaptation measures. This reflects the Asian country’s commitment to sustainable development beyond its own borders.

What’s Next? Singapore’s Carbon Trading Future

Singapore’s carbon credit efforts are still in the early stages but show great potential. The government plans to launch another tender later this year to purchase more nature-based credits. It is also negotiating with over 15 other countries to establish new agreements.

These initiatives highlight Singapore’s commitment to achieving net-zero emissions by 2050. By leveraging international partnerships and carbon trading, the country is paving the way for a more sustainable future.

Carbon credits are an important part of global climate action. Singapore shows how these tools cut emissions and boost global sustainable development.

Through agreements with countries like Peru and its first carbon credit tender, Singapore is setting an example for responsible carbon trading. Challenges remain, like securing supply and protecting the environment, but the country’s proactive approach brings hope for real climate action.

As the world works toward net-zero emissions, Singapore’s experience provides valuable lessons on balancing environmental responsibility with economic growth.

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Frontier Backs Norway’s First Carbon Capture Retrofit! Is This the Future of Waste-to-Energy?

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hafslund Hafslund Celsio

Frontier has signed offtake agreements with Norway’s Hafslund Celsio for the first-ever carbon capture retrofit at their waste-to-energy facility. Such plants recover energy from waste treatment, usually in the form of heat or electricity.

Hafslund Celsio is the country’s largest district heating provider and operator of the biggest waste incineration plant near Oslo.

The press release revealed that Frontier buyers will invest $31.6 million to remove 100,000 tons of CO₂ between 2029 and 2030.

Terje Aasland, Minister of Energy of Norway, said,

“I am pleased to see that the voluntary carbon removal market is adopting carbon removals in hard-to-abate sectors such as waste incineration. This kind of public-private cooperation contributes to creating a functioning market that will accelerate development of further projects in this segment both nationally and internationally.”

What’s Driving Frontier’s Carbon Capture Project?

The carbon capture project is backed by both the government and private companies. Norway’s Longship program is helping fund CO₂ capture and storage through Northern Lights. The City of Oslo is also investing money to keep the project going, and Frontier’s off-take agreements make sure there’s a steady income to make it happen.

Frontier buyers in this round include Stripe, Google, Shopify, McKinsey Sustainability, Autodesk, H&M Group, JPMorgan Chase, Workday, and Salesforce. Additional participants, through Frontier’s partnership with Watershed, include Aledade, Match Group, Samsara, SKIMS, Skyscanner, Wise, and Zendesk.

Hannah Bebbington, Head of Deployment, Frontier, said,

“Waste-to-energy retrofitted with carbon capture is a no-brainer solution for managing pre-sorted, residual waste: it generates carbon-free energy and removes CO₂ from the atmosphere. Hafslund Celsio is set to become the first to do it, charting a path for the 500 waste-to-energy facilities across Europe to remove tens of millions of tons of CO₂ from the atmosphere.”

Hafslund Celsio’s One-of-a-Kind Carbon Capture Facility

The company’s Oslo facility processes 350,000 metric tons of sorted residual waste annually. The plant burns waste to generate electricity and heat, releasing two types of CO₂:
  • Biogenic CO₂ from organic materials like paper and cardboard.
  • Fossil CO₂ from inorganic waste such as plastics.

The retrofit will enable the plant to capture both types of emissions. The CO₂ will then be shipped to Northern Lights for permanent geological storage.

Hafslund Celsio estimates that the facility could capture 175,000 tons of biogenic CO₂ per year, plus 175,000 tons of fossil CO₂ annually. Additionally, the plant is equipped with advanced filters to keep air pollution in the city to a minimum.

While Frontier’s offtake focuses on biogenic CO₂, the fossil emissions are not part of its offtake program. Nonetheless, the project will significantly reduce total emissions from the plant.

Hafslund Celsio waste carbon capture
Source: Frontier press release

Jannicke Gerner Bjerkås, Director CCS and Carbon Markets, Hafslund Celsio commented,

“We’re proud to be the first to take a step toward retrofitting waste-to-energy with carbon removal. Frontier buyers are not only enabling this project to get off the ground, but also validating a model that could be replicated throughout Europe, with the potential to remove tens of millions of tons of CO₂ from the atmosphere.”

Why Upgrade Waste-to-Energy Plants?

In Norway, strict waste rules are in place to transfer leftover and non-recyclable materials to waste-to-energy plants. Burning waste for energy is one of the best ways to handle such types of trash.

Without this process, waste like spoiled paper and cardboard would release methane, a harmful greenhouse gas. Instead, burning it helps generate electricity and heat while keeping emissions lower.

Furthermore, adding carbon capture is a smart and affordable way to scale up CO₂ removal from these plants. In Europe alone, around 500 waste-to-energy facilities could be upgraded, cutting emissions by hundreds of millions of tons.

Instead of constructing new carbon removal systems from scratch, retrofits improve what already exists, making the transition to cleaner energy faster and more efficient.

Capturing CO₂ Can Make a Big Impact

  • Adding carbon capture to waste-to-energy plants could remove 400 million tons of CO₂ per year by 2050.

Right now, these retrofits could capture 100 million tons of CO₂ annually, with that number growing significantly in the future.

Besides extracting carbon dioxide from the atmosphere, these upgrades also help prevent extra emissions from being released in the first place.

Cutting Methane Emissions

A report by the European Environment Agency (EEA) highlights waste-to-energy’s role in reducing methane emissions. Methane is a potent greenhouse gas, with a global warming potential 84 times higher than CO₂ over 20 years. It says:

  • Landfills account for 80% of methane emissions in the waste sector.

Thus, diverting waste from landfills to energy recovery significantly lowers methane emissions.

For example, Germany’s landfill ban on untreated organic waste in 2005, along with expanded waste-to-energy facilities, cut methane emissions from 35.5 million tons in 1990 to 7.5 million tons in 2018. This highlights how smart policies can slash emissions.

The Future of the Waste-to-Energy Carbon Capture Market

As per Precedence Research’s market analysis,

  • The global waste-to-energy market is estimated at USD 51.23 billion in 2025. It is expected to reach USD 92.95 billion by 2034, growing at a CAGR of 6.81% from 2025 to 2034.

waste to energy carbon capture

This growth comes from more awareness of waste-to-energy benefits and the palpable impact of climate change. Countries are realizing the importance of turning non-recyclable waste into energy. Furthermore, recovering landfill gas also reduces significant emissions from the environment.

Europe Leads in Waste-to-Energy
Europe dominates the waste-to-energy sector, holding 42% of the global market share till last year.
  • The market was worth USD 20.19 billion in 2024 and is expected to reach USD 39.50 billion by 2034 at a CAGR of 6.94%.

waste to energy Europe carbon capture

Apart from Frontier, companies like Veolia, EQT AB, Suez, and Ramboll Group A/S are playing a key role in innovation. Strict government regulations on carbon emissions and waste disposal also ensure viable solutions. Plus, carbon taxes and landfill restrictions make waste-to-energy a smarter and more sustainable choice in Europe.

Frontier’s investment in waste-to-energy projects shows how managing waste sustainably can also combat carbon emissions. More importantly, upgrading the existing facilities with carbon capture technology makes it more efficient. By backing these innovations, Frontier is helping Norway to stay clean and green.

The post Frontier Backs Norway’s First Carbon Capture Retrofit! Is This the Future of Waste-to-Energy? appeared first on Carbon Credits.

Lithium Prices Drop—What It Means for EV Batteries & Global Supply Chains

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lithium

Lithium prices have been unpredictable due to global tensions and mining difficulties. As reported by S&P Global, in 2023, lithium carbonate prices shot up past $80,000 per metric ton but later dropped as supply increased and demand slowed. By early 2024, prices stabilized out but remained weak.

But as of March 21, Platts assessed lithium carbonate (CIF North Asia) at $9,200 to $9,550 per ton. This forced several deals on hold, and some mining giants auctioned lithium for better price discovery.

The report highlighted two significant auctions in the first quarter of 2025.

  • On March 5, Albemarle Corp. sold spodumene concentrate (5.61% Li₂O) for 6,701 yuan per ton at its Zhenjiang plant, slightly above the SC6 price after factoring in quality, shipping, and taxes.
  • On March 11, Jiangxi Jiuling Lithium Co. Ltd. auctioned 120 metric tons of battery-grade lithium carbonate for 75,400 yuan per ton—just 100 yuan more than the spot price in China.

These auctions suggest a small price rebound, but overall, the market remains cautious.

Spodumene and Lithium Carbonate Prices Drop

Spodumene prices, which had been relatively stable, saw a 4.7% drop from March 12 to March 21, falling to $810/t. In contrast, Platts-assessed lithium carbonate DDP China decreased by only 1.1% over the same period.

Refineries have been hit hardest, as lithium chemical prices have fallen more than spodumene prices, leading to negative refining margins since mid-2024. This ongoing squeeze on profitability poses risks for companies dependent on refining operations rather than raw material extraction.

Falling prices have forced lithium producers to scale back spending and delay projects. This is how the industry is adjusting to falling lithium prices.

lithium producers

SQM’s Profit Drops 40.9% as Lithium Prices Crash

Chile’s SQM, the world’s second-largest lithium producer, reported a 40.9% drop in fourth-quarter profit. Despite selling more lithium in 2024, falling prices hurt earnings.

Revenue hit $1.07 billion, slightly above the $1 billion analysts expected. But with lithium prices down over 80% in two years, profits took a hit.

Sales grew about 20% from last year, but lower prices wiped out the gains. “Our average price dropped over 64%,” SQM said, adding that prices in early 2025 will likely be even lower than in late 2024.

To adjust, SQM is cutting 2025 spending to $1.1 billion from $1.6 billion in 2024. Most of this will go to its Chile lithium operations ($550 million), with $350 million for iodine and $200 million for international lithium projects.

Sibanye Stillwater’s Exit Adds to Lithium Supply Worries

Similarly, Sibanye Stillwater Ltd. exited its lithium joint venture at Rhyolite Ridge in the U.S. on February 26 this year. As per the company, the project didn’t meet the expected returns at safe price estimates. However, the project had a potential capacity of producing 22,000 tons of lithium carbonate.

Experts are speculating that Sibanye Stillwater’s pullout could worsen the global lithium supply deficit. Furthermore, the rising demand for EVs may drive price swings, impacting battery costs and supply.

  • S&P Global analysed that if lithium prices stay at March’s low of $9,202 per ton (CIF Asia), then about 26% of the expected 2025 production could run at a loss due to high cash costs.

EV Boom Fuels Lithium Demand, But Policy Shifts Could Shake Market

The push for electric vehicles (EVs) is driving long-term lithium demand as automakers ramp up production. Stricter emissions policies worldwide are accelerating this shift, making a stable lithium supply more critical than ever.

PEV sales and lithium demand

Strong EV Sales in February

Global sales of passenger plug-in electric vehicles (PEVs) surged in February. In China, trade-in subsidies boosted demand, while in Europe, stricter CO2 regulations played a key role.

  • Europe’s top four markets saw a 15.8% increase in PEV sales compared to last year. New CO2 targets introduced in January 2024 pushed automakers to step up.
  • To ease pressure, the European Commission proposed a temporary measure allowing companies to meet targets over three years instead of facing heavy fines in 2025. Without this, automakers could have faced losses of €16 billion.

U.S. EV Market Faces Uncertainty

In the U.S., PEV sales grew by 6.5% year over year in February, with a 4.5% month-over-month increase. Many rushed to buy EVs before potential tax credit changes.

However, a new bill—”Eliminating Lavish Incentives to Electric Vehicles Act“—could shake up the market. Introduced by Republican senators in February 2025, the bill aims to:

  • End the $7,500 tax credit for new EVs
  • Eliminate incentives for used EV purchases
  • Cut funding for EV charging stations
  • Close tax loopholes benefiting certain buyers

If passed, the bill could slow EV adoption by making vehicles more expensive and charging less accessible. EV demand remains strong, but shifting policies could reshape the market in the coming years.

A classic example of Tesla. Despite overall EV market growth, Tesla has struggled since last year. February sales dropped significantly in key markets, falling 76% year over year in Germany and 49% in China.

A Ray of Hope: Boosting Lithium Output to Fuel Global Demand

While some lithium producers are holding tight on supplies, some are expanding mining and refining capacities to keep up with the rising demand. Australia, Chile, and Argentina continue to lead lithium extraction, while the U.S. and Europe are working to strengthen domestic production to reduce supply chain vulnerabilities.

On March 20, President Trump signed an executive order to boost the domestic production of critical minerals. The order provides financing, loans, and investment support for lithium mining and processing projects in the U.S. to reduce reliance on imports from key lithium-producing nations like China.

S&P Global also noted that new lithium refining projects are being developed for battery production. However, delays in permits, environmental issues, and geopolitical risks might once again slow expansion.

The chart below shows that each quarter of 2024 displays consistent growth, with production exceeding 100,000 metric tons by Q3 and Q4. This reflects a significant increase in lithium output. This was driven by the growing demand for EV batteries and renewable energy storage systems.

lithium output

Lithium Price Forecast

Lithium price forecasts are also following a downward trend. June and September prices are expected at $8,604 and $9,078 per ton.

LITHIUM price
Source: S&P Global Commodity Insights
This decline can push lithium producers to make more supply cuts. They need to diligently tackle cost pressures, investments, policy changes, and global risks to stay profitable. However, even though the lithium market remains volatile, the crucial mineral’s role is vital in the energy transition.

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Why Stellantis Still Needs Tesla’s Carbon Credits in 2025

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Why Stellantis Still Needs Tesla’s Carbon Credits in 2025

Stellantis, one of Europe’s largest car manufacturers, has announced plans to continue purchasing carbon dioxide (CO₂) emission credits from Tesla in 2025. This decision comes after new EU rules: Starting in 2025, automakers can average their emissions over three years, until 2027. 

This policy change gives automakers more flexibility to meet emission targets. However, Stellantis is still committed to using Tesla’s carbon credits to meet environmental standards.

The decision shows the challenges of moving to electric vehicles (EVs) and highlights the need to balance rules with business plans.

Understanding Carbon Emission Credits

CO₂ emission credits are an essential part of emissions reduction policies. Governments limit how much CO₂ companies can release. This is especially important in transportation, where emissions are a big worry.

Although there have been efforts to cut transport emissions in the EU by increasing the use of EVs, overall emissions have not changed much since 2005. In 2023, emissions were estimated to be 0.8% lower than in 2022.

carbon emissions from transport EU
Source: European Environment Agency

A company that emits less than its limit earns carbon credits. These credits can be sold to companies that exceed their allowances.

For automakers, this system encourages investment in cleaner technologies. Slow-moving companies must either pay fines for high emissions or buy credits from automakers with extra. 

Tesla, which produces only electric vehicles and has low emissions, generates excess credits that it sells to other automakers, including Stellantis.

Since 2019, Tesla has made about $10 billion by selling carbon credits, which has become a major source of income. This financial benefit lets Tesla invest in new technology, research, and production and helps strengthen its position in the EV market.

Tesla annual carbon credit revenue in 2024

Stellantis’ Strategy: A Temporary Fix or Long-Term Dependence?

Stellantis depends on emission credits. This shows the challenges it has in meeting EU emission standards. In 2025, Stellantis’ EV sales in Europe accounted for just 14% of its total sales—well below the EU’s target of 21% for that year.

The company is investing in EV production. However, it hasn’t met the EU regulations yet. To comply, it will need to buy credits.

Jean-Philippe Imparato, head of European operations at Stellantis, said, “I’ll use everything.” This shows that the company is fully committed to meeting emission rules. 

Stellantis is working hard to boost its EV production. However, it still needs Tesla’s credits to keep going. Imparato further added: 

“The 2027 extension ‘gives us some breathing space, but does not provide a solution.”

The automaker has announced plans to ramp up hybrid and electric vehicle production. A new hybrid version of the Fiat 500 will begin production at Stellantis’ Mirafiori plant in Turin, Italy, in November 2025.

The company aims to produce 130,000 units per year, including both hybrid and fully electric versions. This move is part of a two-part strategy. It aims to ensure quick regulatory compliance and invest in EV technology for the future.

Stellantis’ Long-Term Plans

While Stellantis is purchasing carbon credits in 2025, it is also taking steps to strengthen its EV strategy. The company announced investments in battery production and EV infrastructure. These will help reduce its reliance on emission credits in the future.

One of Stellantis’ key initiatives is its plan to expand its electric vehicle lineup. The company is focusing on developing new battery technologies to improve efficiency and lower costs.

Stellantis is pushing forward with its electrification plans, aiming for all its sales in Europe to be battery electric vehicles (BEVs) by 2030. In the U.S., it targets 50% BEV sales for passenger cars and light-duty trucks by the same year.

The company, which owns 14 well-known brands, plans to launch 75 BEV models by 2030, with a goal of selling 5 million units annually. Starting in 2025, all new luxury and premium models will be fully electric. By 2026, this strategy will expand to all vehicle segments in Europe.

Stellantis Roll Out of Battery Electric Vehicles (BEVs)

Stellantis EV rollout production plan
Source: Stellantis

The European carmaker is also looking for partnerships with battery makers and energy firms. This will help improve its EV supply chain. All these are part of the automaker’s goal to reach net-zero emissions by 2038. 

In the next few years, Stellantis plans to boost its EV sales. This will help cut down on buying carbon credits from other companies. The company is focusing on hybrid and fully electric models. This way, it can gradually transition to meet market demand and follow regulatory rules.

European Union’s Emission Regulations

The European Union has strict emissions regulations. These rules aim to encourage automakers to reduce carbon emissions. Automakers must meet specific fleet-wide CO₂ emission targets, which become stricter over time. 

Initially, car manufacturers were required to meet individual targets by 2025. In response to industry concerns, the EU extended the compliance period. Now, automakers can meet targets by averaging their emissions from 2025 to 2027.

This change gives automakers more flexibility. It also allows them time to adjust their production plans. However, it does not remove the requirement to meet strict emission targets in the long term. 

Stellantis will keep buying Tesla’s carbon credits, even with the compliance extension. This shows the company views these credits as a needed short-term fix while it aims for a more sustainable future.

Industry Perspectives on Compliance and Credit Purchases

The EU’s extension of the compliance period has sparked debate within the auto industry. Some automakers view it as a necessary adjustment that allows them time to scale up EV production without facing immediate financial penalties. Others argue that it could slow the transition to EVs by reducing the pressure on automakers to meet strict deadlines.

Environmental organizations have also raised concerns about the impact of the extension. They say that giving automakers more time to follow regulations might slow down the move to lower emissions. This could hurt efforts to reduce climate change effects.

However, automakers like Stellantis see the extension as a way to balance business sustainability with regulatory requirements.

The company’s decision to continue buying CO₂ credits from Tesla in 2025 highlights the challenges automakers face in meeting stringent emissions targets. The EU’s compliance extension gives temporary relief. 

The post Why Stellantis Still Needs Tesla’s Carbon Credits in 2025 appeared first on Carbon Credits.

Meta and EFM Join Forces to Deliver 676,000 Forest Carbon Credits by 2035

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meta

EFM, a forest investment and management firm, has signed a long-term deal with Meta. They will provide 676,000 carbon removal credits by 2035. This agreement will transform 68,000 acres of forest on Washington’s Olympic Peninsula to “climate-smart management”, removing over one million tonnes of carbon emissions in the next ten years.

Bettina von Hagen, CEO from EFM, expressed herself by saying,

“This long-term contract enables us to manage forests for their greatest value to society—producing high-quality timber, creating diverse, healthy habitats for wildlife and recreation, and collaborating with tribes to restore salmon populations—all while significantly increasing carbon storage. We’re deeply grateful to Meta for recognizing the critical role forests play in addressing climate challenges and for sharing our vision of high-quality carbon projects that enhance the long-term value of our forests. Together, we’re ensuring these landscapes will benefit communities, sawmills, tribes, investors, home builders, and everyone who depends on the health of commercial forests for generations to come.”

Meta Backs EFM’s Climate-Smart Forest Transition

EFM is an investment and management firm. It manages over 200,000 acres of FSC-certified forests. The firm uses climate-smart strategies in the Pacific Northwest and beyond. With 20 years of experience, EFM is now expanding into new markets. These markets allow climate investments to benefit investors, communities, and the public.

This contract guarantees steady, long-term carbon revenue. It reduces financial risks for climate-smart forest management. EFM’s funds and other investors will fund this new entity.

One major investor is the Natural Capital Fund, managed by Climate Asset Management. It has raised more than $1 billion from companies and institutions. This funding supports nature and carbon projects around the globe.

Significantly, with Meta’s early support, the project got an innovative approach, which, in turn, made large-scale climate-smart forest investments easier.

The deal also shows how carbon finance in forestry is evolving. Normally, landowners sell carbon credits only after buying the property. But this new approach allows carbon revenue fund purchases upfront, making investing easier.

A New Step for Its Climate Commitment

Tracy Johns, Carbon Removal Lead at Meta, said,

“As part of Meta’s goal to achieve net zero emissions across our value chain in 2030, we focus our strategy on understanding and reducing our emissions, and removing any remaining emissions through carbon removal credits. We support high-impact projects, and EFM’s extensive track record in sustainable management of forests made them an ideal partner and aligned with our goals. Our commitment to this project supported EFM’s efforts to take an approach to forest management that not only drives strong climate and forestry outcomes, but also provides real value and environmental services to local communities.” 

Each carbon credit stands for a reduction of one metric ton of carbon dioxide emissions. This gives companies a way to offset their carbon footprint. For Meta, this step aligns with its goal to reach net-zero emissions across its entire value chain by 2030.

As per its latest sustainability report, in 2023, Meta’s net emissions equaled 7.4 million metric tons of CO2. Key commitments include:

  • Cutting Scope 1 and 2 emissions by 42% by 2031. This is based on a 2021 baseline. Also, make sure most suppliers adopt science-based GHG reduction targets by 2026.

  • Keeping Scope 3 emissions at or below 2021 levels by 2031.

Meta
Source: Meta

To tackle residual emissions, Meta invests in nature-based and technological carbon removal projects. These projects help fight climate change and boost biodiversity.

The company signed a carbon offset agreement with BTG Pactual’s forestry arm, Timberland Investment Group (TIG). The deal involves buying up to 3.9 million carbon credits through 2038.

Scaling Forest Management to Slash Carbon Emissions

The forests in the Pacific Northwest store more carbon per acre than any other ecosystem. Improved Forest Management (IFM) offers a strong opportunity to cut greenhouse gases in the air.

IFM extends harvest cycles and protects carbon-rich areas while still allowing timber production. The big advantage is that it can be scaled quickly, with a noticeable impact within a decade.

Revitalizing the Olympic Rainforest

The Olympic Rainforest covers 68,000 acres on Washington’s Olympic Peninsula that was previously managed for timber. It is located next to the Olympic National Park, a World Heritage Site and Biosphere Reserve.

EFM’s FSC-certified, climate-smart management approach aligns perfectly with the region as it offers opportunities for climate action, conservation, and biodiversity.

They use the 5Rs™ strategy, i.e., Rotation, Reserves, Retention, Restoration, and Relationships.

efm
Source: EFM

The benefits of scaling Climate-Smart Forestry include the following:

  • One Million Tonnes of Carbon Removal: Improved Forest Management (IFM) can capture more than 10 million tonnes of CO₂. It could also remove more than one million tonnes of carbon in the next decade.

  • Sustainable Timber Growth: EFM plans to almost double timber stocks in 15 years. This will improve forest health and boost long-term timber production.

  • Conservation on a Large Scale: This acquisition supports big conservation efforts. It creates a 150-mile corridor from Hood Canal to the Olympic Marine Sanctuary. This impacts 5 million acres.

  • Boosting Biodiversity: Conservation will support endangered species and aid in wild salmon restoration.

  • Tribal Collaboration: This project allows you to work with the Quileute and Hoh tribes. You’ll focus on wildlife, restoration, and cultural harvesting.

  • Public Access and Tourism: EFM will improve access to national parks. They will link up with trails such as the Olympic Discovery Trail and the Pacific Northwest National Scenic Trail.

Most importantly, EFM’s years of experience in forest carbon projects ensure that buyers get quality credits. It uses ACR’s dynamic baseline method. This helps prevent over-crediting carbon credits.

Martin Berg, Chief Executive Officer of Climate Asset Management, commented,

“When we set up Climate Asset Management four years ago, it was very much with a pioneering spirit, to become a world leader in natural capital investing. So, it is particularly pleasing to have worked with EFM and Meta in completing the acquisition of Olympic Rainforest, with its innovative long-term contract, on behalf of the investors in our Natural Capital Fund. We remain committed to supporting bold and scalable nature-based investments to secure a more climate-resilient, nature-positive and inclusive world.”

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Amazon Leads Corporate Clean Energy Contracts, Hitting Record High at 100GW

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Amazon Leads Corporate Clean Energy Contracts, Hitting Record High at 100GW

Corporate clean energy contracts have hit an impressive 100 gigawatts (GW) globally, a major milestone for renewable energy, as reported by the Clean Energy Buyers Association (CEBA). This shows that more businesses are opting for clean energy to cut their carbon footprint and move toward sustainable energy.

As more companies invest in clean energy, the global renewable market is growing and changing the energy landscape. 

The Rise of Corporate Renewable Energy Procurement

Over the past decade, corporations have become major players in the renewable energy market. Big multinational companies, like tech giants, retail chains, and manufacturers, are signing power purchase agreements (PPAs). These agreements help them get clean electricity for their operations.

These contracts allow businesses to buy electricity from wind and solar farms. This, in turn, helps fund new projects and increases the use of renewable energy.

The Clean Energy Buyers Association (CEBA) reported that companies bought 21.7 GW of clean energy in 2024 alone. This was the highest amount in a single year. This brings the total corporate-driven clean energy capacity in the U.S. to 100 GW since 2014.

CEBA deal tracker
Source: CEBA

One gigawatt (GW) of electricity can power about 750,000 U.S. homes for a year. This shows how much corporations affect the energy grid.

One of the key drivers behind this trend is the push for sustainability. Companies face growing pressure from investors, customers, and regulators to cut greenhouse gas emissions. Businesses can buy renewable energy, helping them rely less on fossil fuels. They can also lower costs and reach their climate goals.

The Role of Solar, Wind, and Emerging Technologies

Solar and wind power have been the primary sources of clean energy adopted by corporations. The International Energy Agency (IEA) reports that in 2024, solar photovoltaic (PV) installations hit 2.2 terawatts (TW) worldwide. Wind energy capacity grew significantly, too, as shown below.

renewable capacity additions by tech 2024
Source: IEA

Corporate PPAs are key to this growth. They give developers a steady income and speed up project development.

In 2024, solar energy made up 73% of corporate clean energy contracts. This happened even with problems like permitting delays and grid interconnection issues. 

Wind energy made up 7.7%, while nuclear power surprisingly entered the market with 1.5 GW in corporate procurement.

corporate clean energy procurement CEBA 2024
Source: CEBA
  • Battery storage capacity increased by a remarkable 300%. This highlights the growing emphasis on energy storage solutions.

Google’s 115-megawatt (MW) deal with Fervo in Nevada is a big move for geothermal energy. This contract uses a new tariff system. It helps protect customers from the costs of new technologies.

Microsoft and Amazon have taken the lead in nuclear power deals. This shows how companies are diversifying their clean energy plans. Nuclear energy was not part of corporate contracts in 2023, but in 2024, companies bought 1.5 GW.

Which Companies Are Leading?

Tech companies have been at the forefront of corporate renewable energy procurement. In 2024, Amazon remained the top corporate buyer for the 5th year in a row. It invested in more than 600 renewable energy projects worldwide.

In Mississippi, for example, projects backed by Amazon now account for 24% of solar electricity on the state’s grid.

Other major corporate buyers include:

  • Google: With extensive investments in wind, solar, and geothermal projects.
  • Microsoft: A leader in nuclear and battery storage agreements.
  • Meta (formerly Facebook): A major purchaser of wind energy for its data centers.
  • General Motors and Ford: Investing in clean energy to power manufacturing operations.

Rehonally, the United States is the top market for corporate PPAs. It accounts for almost 50% of all global contracts.

However, Europe and Latin America are rapidly expanding, with companies in India and China also increasing their commitment to clean energy.

The Impact on Global Energy Markets

Corporate clean energy contracts are growing. This trend impacts the global energy sector in several ways:

  1. Accelerating the Clean Energy Transition. Corporate demand is driving investment in new wind, solar, and battery storage projects.
  2. Decarbonizing Supply Chains. Many companies are encouraging suppliers to transition to renewable energy, magnifying the impact beyond individual businesses.
  3. Job Creation and Economic Benefits. Renewable energy projects generate jobs and boost local economies, particularly in rural areas where large-scale wind and solar farms are developed.
  4. Grid Stability Challenges. Rapid clean energy adoption presents challenges for power grids, necessitating modernization and investment in energy storage.

Beyond 100 GW: Challenges and Future Outlook

Despite the rapid growth of corporate clean energy procurement, challenges remain. 

For instance, many power grids require upgrades to handle the increased load from renewable sources. Moreover, complex regulations in certain countries make it difficult for businesses to sign PPAs.

Also, the rising demand for solar panels, wind turbines, and battery storage may lead to material shortages and project delays.

The IEA reports that global energy demand grew by 2.2% in 2024, outpacing the average 1.3% growth between 2013 and 2023. Most of this demand was met by low-emission energy sources. Now, global renewable capacity is about 700 GW.

global energy demand IEA 2024

Nuclear power hit its fifth-highest level in fifty years, showing the growth of low-carbon energy options.

Looking ahead, corporate demand for clean energy is expected to continue growing. Advances in battery technology, the rise of green hydrogen, and continued government incentives will further accelerate clean energy adoption.

With increasing commitments from businesses worldwide, the transition to a low-carbon economy is gaining momentum. The next major milestone — 200 GW of corporate clean energy procurement—may not be far off.

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How AI is Revolutionizing Battery Storage for a Greener Future

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Battery storage is essential for making renewable energy more reliable. It collects extra energy from solar and wind, making electricity ready when needed. However, artificial intelligence (AI) is taking battery management to the next level.

Experts say AI software is now essential for managing large battery systems. Companies are using AI for more than basic tasks. They apply it in energy trading, safety monitoring, and predictive maintenance.

Advanced AI Techniques Enhancing Battery Storage

Battery systems use smart tools like machine learning, deep learning, predictive analytics, and reinforcement learning. They are emerging as a crucial tool in managing large-scale battery systems.

By combining these technologies, AI ensures:

These upgrades provide a steady and reliable power supply, making battery energy storage more viable and cost-effective.

S&P Global says that the need for battery energy storage systems is rising. However, AI integration is still just starting out. However, lithium-ion battery storage developers are well-placed to meet this demand.

Henrique Ribeiro, principal analyst for batteries and energy storage at S&P Global Commodity Insights, says,

“What is likely to happen is, as the market gets more and more competitive and you have more capacity being deployed, it starts to become more difficult to maximize revenues. So these types of tools can be an edge.”

AI battery storage

Boosting Battery Storage Safety

Scientists, researchers, and experts consider manufacturing high-quality batteries technically complex and challenging. AI-powered analytics will grow in importance as lithium-ion battery production rises, especially in China and the U.S

One major challenge is the rapid pace of innovation. If manufacturing mistakes are missed, they can cause serious problems. One issue is thermal runaway, which can lead to dangerous fires. However, AI can help detect problems early and prevent costly failures.

Batteries, just like other energy storage systems, also have safety risks. This is very concerning. Yet, this challenge presents an opportunity for the industry to improve safety measures.

Groups like the Industrial Electrotechnical Commission and UL Solutions are raising safety standards. Therefore, managing these risks effectively is crucial to sustaining the industry’s momentum.

As energy storage evolves, AI will help optimize operations. It will also ensure a reliable and sustainable power grid.

Tesla Cybertruck Gets Smarter with Electra’s EVE-Ai™ 

Electra, a leader in AI-powered battery management, has introduced its advanced EVE-Ai™ technology in the Tesla Cybertruck Cyberbeast at CES 2025. This marks Electra’s second major global showcase, following its debut at MOVE 2024, highlighting its mission to transform energy management for EVs.

Smarter Battery Management with AI

EVE-Ai™ uses artificial intelligence to improve battery performance, predict energy use, and extend battery life. Key benefits include:

  • Accurate range estimates – Reduce errors by up to 20%, helping drivers plan trips with confidence.

  • Longer battery life – Extends lifespan by up to 40% through predictive maintenance and smart charging.

  • Operational efficiency – Detects potential issues early, reducing downtime for EV fleets and energy storage systems.

Translating Data into Action

Recently, Electra has also integrated large language model (LLM) technology into EVE-Ai™, making complex battery analytics easy to understand. Now, anyone—not just experts—can get clear, real-time insights into battery health, risks, and performance.

This is how Electra is making battery management easier and more effective in terms of longevity, performance, and reliability. On a larger scale, its technology is helping businesses, fleet operators, and energy storage managers make smart decisions based on real data—without needing technical expertise.

AI in Battery Storage Dominates in Solar-Rich Markets

An interesting analysis by S&P Global revealed that battery storage is thriving in regions where solar power dominates. This means companies located there are advancing AI technology in battery storage.

For example, in California and Texas, energy storage capacity skyrocketed between 2020 and 2024, surpassing pumped hydro for the first time. Last year, new battery installations even outpaced gas-fired power additions—a major milestone for the industry.

As a result, AI is mostly used in these battery storage systems in solar-rich markets.

During the day, they store extra power at lower costs, then release it in the evening when electricity prices rise. This strategy, known as energy price arbitrage, has been especially profitable in the U.S. Southwest, where it’s also helping reduce dependence on natural gas. As a result, battery storage is rapidly gaining ground over traditional power sources.

battery storage U.S.

UBS Asset Management’s AI Strategy for a Smarter Grid

UBS Asset Management is revolutionizing AI use to boost safety, reliability, and profitability in energy storage. By adopting advanced AI solutions, the company improves battery performance, reduces risks, and ensures long-term efficiency in the growing energy storage sector.

The company has partnered with leading AI firms to optimize its energy storage projects in Texas.

  • In 2022, UBS Asset Management acquired four ERCOT battery projects with a total capacity of 730 MW.
  • These projects will start operating in 2024 and early 2025, helping the Texas grid stay flexible and reliable.

Mark Saunders, co-head of Energy Storage Infrastructure, UBS Asset Management, said,

“Integrating Avathon’s Industrial AI platform will allow us to focus on operations and asset management tasks that directly benefit the profitability of our commercial battery storage investment projects. The use of generative AI for compliance management alone is a value-add, on top of the many other features.”

ACCURE’s AI-Powered Monitoring and Predictive Maintenance

ACCURE Battery Intelligence is crucial to UBS Asset Management’s energy storage plan. Notably, its AI-driven software integrates seamlessly with existing battery management systems.

The company’s predictive analytics platform monitors battery health and spots potential failures early, and suggests fixes.

  • It analyzes data from more than 6 GWh of batteries. This helps find hidden risks that might cause performance issues, such as overheating.

ACCURE recently won the Solar Media Energy Storage Award for “Safety Product of the Year” for its significant contributions to battery safety.

Avathon’s Industrial AI Platform Maximizes Profits

Other than ACCURE, UBS has also partnered with Avathon Inc. and Habitat Energy Ltd. to boost its battery storage investments. Avathon’s Industrial AI platform enhances operational efficiency, cuts costs, and raises profitability.

Notably, their AI helps wind turbines and solar panels run better while cutting maintenance costs by up to 40%. Additionally, by providing a clear picture of battery storage assets, it helps companies stay ahead in a rapidly changing market.

Battery storage is one of the key technologies pushing the energy transition and helping in mitigating emissions. With AI integration, the technology would only become more advanced, accurate, and efficient.

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Xpansiv to Launch New Carbon Credit Contract to Support CORSIA Compliance

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Xpansiv to Launch New Carbon Credit Contract to Support CORSIA Compliance

Xpansiv, a leading infrastructure provider for global energy transition markets, has announced the launch of its CBL GEO® CORSIA first compliance phase (GEO CP1) standardized spot contract on April 29, 2025. This contract will help the international aviation sector meet carbon offsetting needs. It supports the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

The new contract will trade on Xpansiv’s CBL spot exchange. It will also be available through partner exchanges. These include the Aviation Carbon Exchange (ACE), which CBL runs with the International Air Transport Association (IATA). The Johannesburg Stock Exchange’s JSE Ventures Carbon Market will also offer it.

This expansion is a big step in blending voluntary and compliance carbon markets. Airlines are now entering the first compliance phase of CORSIA.

The Growing Need for Carbon Credits in Aviation

The aviation industry is responsible for a significant share of global greenhouse gas emissions. Carbon credits are becoming more essential for airlines aiming to cut emissions. This is because alternative technologies, like sustainable aviation fuel (SAF), are still costly and not fully developed.

aviation carbon emissions

Under CORSIA, airlines must offset emissions above 2019 levels. They do this by buying carbon credits from approved projects that reduce or remove greenhouse gases.

The demand for high-quality carbon credits will likely rise. This increase comes as more airlines and industries join compliance markets. ICAO recently projected that 100-150 million tons of CORSIA Eligible Emissions Units (EEUs) will be required during the first compliance phase.

Xpansiv’s new GEO CP1 contract aligns with this growing demand, as remarked by John Melby, Xpansiv CEO: 

“The transition into the compliance phase of CORSIA is a watershed moment for the rapidly converging voluntary and compliance carbon markets. Our new GEO CP1 contract has been carefully designed based on an extensive market consultation, which revealed a clear consensus to launch the contract only when deliverable supply was available and sufficient clarity around the ICAO framework was achieved. Those conditions have now been met.” 

Standardized Trading and Market Transparency

One of the key features of the GEO CP1 contract is its alignment with CORSIA EEU eligibility criteria. When launched, EEUs from this contract will be sourced from top environmental credit registries. These include:

When more registries get CORSIA approval, their credits can be used in the contract, too.

Xpansiv is using its strong market infrastructure to boost transparency and efficiency in trading. A unique sub-account structure developed for IATA’s recent EEU procurement events will also be available for GEO CP1 participants. This setup allows traders to trade the contract without needing main accounts for each credit standard. It makes access to CORSIA-compliant credits easier.

An analysis by Abatable suggests that demand for CORSIA credits could surpass available supply by 2030. Without new projects, CORSIA demand in Phase 2 can be 14x bigger than the supply.

CORSIA carbon credit demand, supply, conservative scenario
Source: Abatable

Market Growth and the Role of Carbon Credits

The launch of the GEO CP1 contract comes at a time when the carbon market is experiencing rapid growth. In 2023, global carbon market revenues reached a record $104 billion.

revenue per type of carbon pricing 2017 to 2023
Source: World Bank

Companies in aviation, energy, and manufacturing are turning to carbon credits. They use these credits to meet sustainability goals and follow regulations.

Regulatory frameworks like the EU’s Carbon Border Adjustment Mechanism (CBAM) are boosting the demand for verified carbon offsets. Also, consumer demand and investor interest in sustainability have pushed companies to join carbon markets. As a result, investment firms and financial institutions are integrating carbon offset projects into their portfolios.

Even with this growth, the carbon market has struggled with price swings and unclear regulations. In 2024, carbon credit prices dropped due to shifts in global climate policies.

The global average carbon price stood at $32 per ton of CO₂, falling short of the estimated $50 per ton needed by 2030 to achieve Paris Agreement targets. Localized markets like California’s cap-and-trade system saw carbon prices hit $42 per metric ton in 2024. They are expected to rise to $46 per ton in 2025.

Xpansiv’s Performance in the Carbon Market

Xpansiv has seen significant growth in its trading volumes, particularly on its CBL platform. In November 2024, trading volumes almost doubled. This surge was fueled by Nature-Based Global Emission Offsets (N-GEOs). More than 600,000 tons were traded at prices between $0.30 and $4.10 per metric ton.

By mid-December 2024, over 2 million tons of carbon credits were traded on the platform. This made up 16% of all transactions for the year.

In January 2025, Xpansiv’s CBL spot exchange made headlines. It recorded over $27 million in Renewable Energy Certificate (REC) transactions. This amounted to a total of 251,758 MWh.

These market trends show the increasing reliance on Xpansiv’s infrastructure for carbon trading and emissions management.

The Future of Carbon Markets and CORSIA Compliance

Looking ahead, Xpansiv is well-positioned to support the expansion of carbon markets. As companies and governments push for net-zero goals, the need for quality carbon credits will grow. Standardized trading tools like the GEO CP1 contract boost the trust and ease of access in carbon markets.

Government policies will also play a crucial role in shaping the future of carbon markets. Initiatives like carbon pricing, cap-and-trade, and carbon taxes will likely affect credit demand. Also, new tech like blockchain for credit tracking will boost market transparency. This helps stop problems like double counting.

Xpansiv’s latest GEO CP1 contract marks a significant step forward in providing aviation stakeholders with the resources needed to comply with CORSIA while supporting global sustainability efforts.

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