The EU’s agreement on a 90% emissions reduction target by 2040, including an allowance for up to 5% of reductions to be met with international carbon credits, sends an important demand signal to the market. Even though the EU has not yet spelled out detailed quality criteria, simply confirming that credits can play a limited role in the 2040 framework is enough to boost confidence among developers, host countries, and intermediaries that compliant demand will grow.
This 5% window matters less for its absolute size and more for what it represents: a major jurisdiction formally recognizing that international credits will remain part of the climate toolbox alongside domestic abatement. That endorsement can help unlock new project pipelines, encourage governments to clarify Article 6 procedures, and accelerate financial commitments into high integrity mitigation activities. As expectations around integrity tighten from buyers, standards bodies, and civil society, this additional policy backed demand is likely to favor credits that can demonstrate strong governance and transparency, even if the EU has not yet codified specific filters.
Indonesia’s COP30 experience and the SBTi Corporate Net Zero Standard v2 draft both sit within this broader shift. Indonesia’s success in securing substantial carbon credit commitments showcases how governments are racing to capture opportunity as demand signals strengthen, while also highlighting that reputational and regulatory scrutiny will decide which parts of that supply are investable. Meanwhile, SBTi’s draft approach, encouraging companies to focus on deep internal reductions while still recognizing a role for high quality credits, aligns with the EU’s message that credits are not going away, but will be used more selectively.
From Welhunt’s perspective, the implication is clear: policy driven growth in demand, led by signals like the EU’s 5% allowance, is creating a larger but more discriminating market. Traders who can secure reliable supply, structure long term offtakes, and help clients navigate evolving expectations will be best positioned to capture the upside of this next phase in carbon market development.
https://welhunt.com/wp-content/uploads/2025/03/logo-new-color-1.png00welhunt.ithttps://welhunt.com/wp-content/uploads/2025/03/logo-new-color-1.pngwelhunt.it2025-11-01 14:22:462026-02-03 10:43:46EU’s 5% Signal: Room for Growth in High Quality Credits
The rising benchmark prices and the increasing structuring of procurement events point to a maturing and increasingly transparent market for CORSIA-eligible carbon credits. For commodity traders like Welhunt, these developments are not just milestones—they represent a shifting market landscape that opens up meaningful trading, offtake, and hedging opportunities.
The growing demand is clearly reflected in auction price trends: the average clearing price of CORSIA-eligible units rose from $21.70/ton in Q1 2025 to $22.55/ton in Q3, signaling growing urgency among compliance buyers. This upward pressure is further amplified by regulatory shifts.
Countries like the UK and France are moving to incorporate CORSIA into domestic law, increasing pressure on their national airlines to comply—or face penalties. This trend marks a new era of accountability and compliance-driven demand in the aviation sector.
However, supply is not keeping pace. According to the MSCI CORSIA Market Outlook Report, Phase 1 could face a supply shortfall ranging from 12 to 64 million tons (MtCO2e). As a result, MSCI models project that prices may rise significantly—anywhere between US$26 to US$63 per ton depending on the scenario.
In response to tightening supply and rising spot prices, more buyers are turning to forward contracts and guaranteed offtake agreements to secure future delivery at competitive prices. This shift not only stabilizes procurement strategies for airlines but also creates a structured, longer-term demand outlook for developers and traders alike.
As a proactive VCM trading firm, Welhunt continues to support clients by sharing market insights and identifying optimal procurement windows. Our team has successfully helped airline clients secure CORSIA-eligible emission units (CEEUs), both in the spot and forward markets, even amid tightening supply.
We believe the CORSIA market is transitioning from speculative to strategic, and those with a deep understanding of both policy signals and market dynamics will be best positioned to lead.
EU’s 5% Signal: Room for Growth in High Quality Credits
The EU’s agreement on a 90% emissions reduction target by 2040, including an allowance for up to 5% of reductions to be met with international carbon credits, sends an important demand signal to the market. Even though the EU has not yet spelled out detailed quality criteria, simply confirming that credits can play a limited role in the 2040 framework is enough to boost confidence among developers, host countries, and intermediaries that compliant demand will grow.
This 5% window matters less for its absolute size and more for what it represents: a major jurisdiction formally recognizing that international credits will remain part of the climate toolbox alongside domestic abatement. That endorsement can help unlock new project pipelines, encourage governments to clarify Article 6 procedures, and accelerate financial commitments into high integrity mitigation activities. As expectations around integrity tighten from buyers, standards bodies, and civil society, this additional policy backed demand is likely to favor credits that can demonstrate strong governance and transparency, even if the EU has not yet codified specific filters.
Indonesia’s COP30 experience and the SBTi Corporate Net Zero Standard v2 draft both sit within this broader shift. Indonesia’s success in securing substantial carbon credit commitments showcases how governments are racing to capture opportunity as demand signals strengthen, while also highlighting that reputational and regulatory scrutiny will decide which parts of that supply are investable. Meanwhile, SBTi’s draft approach, encouraging companies to focus on deep internal reductions while still recognizing a role for high quality credits, aligns with the EU’s message that credits are not going away, but will be used more selectively.
From Welhunt’s perspective, the implication is clear: policy driven growth in demand, led by signals like the EU’s 5% allowance, is creating a larger but more discriminating market. Traders who can secure reliable supply, structure long term offtakes, and help clients navigate evolving expectations will be best positioned to capture the upside of this next phase in carbon market development.
CORSIA Credit Auctions Reflect Growing Urgency—and Opportunity—for Carbon Traders
The rising benchmark prices and the increasing structuring of procurement events point to a maturing and increasingly transparent market for CORSIA-eligible carbon credits. For commodity traders like Welhunt, these developments are not just milestones—they represent a shifting market landscape that opens up meaningful trading, offtake, and hedging opportunities.
The growing demand is clearly reflected in auction price trends: the average clearing price of CORSIA-eligible units rose from $21.70/ton in Q1 2025 to $22.55/ton in Q3, signaling growing urgency among compliance buyers. This upward pressure is further amplified by regulatory shifts.
Countries like the UK and France are moving to incorporate CORSIA into domestic law, increasing pressure on their national airlines to comply—or face penalties. This trend marks a new era of accountability and compliance-driven demand in the aviation sector.
However, supply is not keeping pace. According to the MSCI CORSIA Market Outlook Report, Phase 1 could face a supply shortfall ranging from 12 to 64 million tons (MtCO2e). As a result, MSCI models project that prices may rise significantly—anywhere between US$26 to US$63 per ton depending on the scenario.
In response to tightening supply and rising spot prices, more buyers are turning to forward contracts and guaranteed offtake agreements to secure future delivery at competitive prices. This shift not only stabilizes procurement strategies for airlines but also creates a structured, longer-term demand outlook for developers and traders alike.
As a proactive VCM trading firm, Welhunt continues to support clients by sharing market insights and identifying optimal procurement windows. Our team has successfully helped airline clients secure CORSIA-eligible emission units (CEEUs), both in the spot and forward markets, even amid tightening supply.
We believe the CORSIA market is transitioning from speculative to strategic, and those with a deep understanding of both policy signals and market dynamics will be best positioned to lead.