• UK, Kenya, and Singapore launch coalition to restore trust in voluntary carbon markets.

• Market value plummeted by over 70% since 2021 amid greenwashing scandals and poor-quality credits.

• Coalition aims to set unified rules and enhance transparency ahead of COP30

The voluntary carbon market is facing a profound crisis in 2025, marked by questionable credits, greenwashing accusations, and volatile prices. Its role in the global climate transition is increasingly questioned, amid a lack of solid guarantees on its actual effectiveness.

As preparations for COP30 accelerate ahead of the November 2025 conference, the United Kingdom, Kenya, and Singapore have announced the formation of an international coalition aimed at revitalizing the voluntary carbon credit market through shared guiding principles.

Officially launched on June 24, the coalition seeks to establish clear rules to steer companies toward purchasing high-quality carbon credits in an environment of deep mistrust.

Data from MSCI/Trove Research, a specialist in carbon market analytics, reveals a sharp decline in market value—from $2.1 billion in 2021 down to approximately $550 million in 2024.

This more than 70% drop contrasts with a stable annual trading volume of around 160 million credits. However, demand is shrinking, with a significant fall in the number of buyers.

A key factor behind this downturn is the poor quality of many issued credits. A 2023 investigation by The Guardian, in partnership with NGO SourceMaterial and Die Zeit, found that over 90% of forest credits certified by Verra—one of the largest global registries—may not have resulted in genuine emission reductions.

Several projects were criticized for overestimating deforestation risks or claiming impacts that were not additional.

The London School of Economics’ Grantham Research Institute highlighted in its June 25, 2025 report, Global Trends in Climate Change Litigation: 2025 Snapshot, a rise in lawsuits related to carbon offset projects, with Australia, Kenya, and the United States among the most affected countries.

The carbon market also suffers from a lack of harmonized standards, as each registry applies its own methodologies without unified international recognition.

In response, the coalition led by London, Nairobi, and Singapore aims to set public reference principles, increase transparency in credit issuance and use, and align the voluntary market with existing regulatory frameworks. While incentives for companies are planned to encourage compliance, specific implementation details remain undisclosed.

Official statements emphasize the coalition’s objective to restore credibility to this fragile climate finance tool. A preliminary version of the common principles is expected ahead of COP30 in Brazil. The effectiveness of the initiative will depend heavily on the content, legal enforceability, and the engagement of additional states and private sector actors.

Abdel-Latif Boureima