Carbon Credit Retirements Hit Record High Despite Falling Supply: What Does This Say About the Market?

According to AlliedOffsets’ H1 2026 report, the Voluntary Carbon Market (VCM) is experiencing a historic structural shift. Despite a 44% year-over-year plunge in new credit issuances (dropping to 108.2 million), carbon credit retirements rose 4% to an all-time high of 104 million, successfully clearing out historical oversupply.
Key market takeaways include:
– Premium on Quality: Driven by integrity frameworks, issuances of Core Carbon Principles (CCP)-approved credits jumped 64%, while their retirement rose 18%. Conversely, rejected project issuances fell 67%.
– Asian Demand Surge: Driven by corporate procurement coalitions like Singapore’s ARC, Asia has become the fastest-growing source of new buyers.
– CDR Bottlenecks: Carbon Dioxide Removal (CDR) demand outpaces supply 18-to-1. Biochar dominates (53% of retirements), while Direct Air Capture (DAC) struggles, delivering just 0.1% of its 2 million contracted tonnes due to high costs.
News Link
#VCM #CarbonMarket #AlliedOffsets #CoreCarbonPrinciples #CCP #CarbonRemoval #CDR #Biochar #DAC #ClimateFinance