This report is published monthly and provides a high-level overview of the key developments in select compliance and voluntary carbon, biodiversity and Sustainable Aviation Fuel markets.
This report is published monthly and provides a high-level overview of the key developments in select compliance and voluntary carbon, biodiversity and Sustainable Aviation Fuel markets.
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ACCU prices rose steadily through May, buoyed by the re-election of the Albanese Labor government, which reinforced policy continuity - particularly around the Safeguard Mechanism. This supported market confidence despite a post-compliance lull in trading. Prices for Generic, No Avoided Deforestation (No AD), and Human-Induced Regeneration (HIR) credits each climbed for a second consecutive month, with No AD spot ACCUs reaching a high of A$35.90, followed closely by Generic (A$35.80) and HIR (A$35.65).
Volumes were down from April’s compliance-driven surge, but at 2.36 million units, May 2025 trading nearly doubled year-ago levels, reflecting steady market growth. No AD credits dominated, comprising 87% of spot and forward trades. Forward markets were notably active - revived post-election - with 230,000 units traded at premiums to spot, showing a bullish outlook. Meanwhile, derivatives activity suggested hedging interest, with put options struck between A$30 and A$33 for mid-2025 to early-2026 expiry.
The Safeguard Mechanism Credit (SMC) market also gained traction, trading 160,000 units in May. The price discount to Generic ACCUs narrowed from A$1.90 to A$0.80, indicating improving demand as entities begin to incorporate SMCs into compliance strategies.
On the policy front, consultation is open until 12 June on a new Landfill Gas method, set to replace current methodologies. Proposed changes include higher default baselines and extended crediting periods, aiming to address integrity concerns. In April, Landfill Gas projects accounted for 62% of ACCU issuance - 1.25 million of the month’s 1.99 million units - with LMS Energy alone generating 1 million. Issuance of Avoided Deforestation and HIR credits fell to 316,000 and 237,000, respectively.
Elsewhere, Labor’s approval of Woodside’s 40-year North West Shelf extension underscores the ongoing role of gas, reinforcing the long-term relevance of market mechanisms like the Safeguard Mechanism.
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For a comprehensive update on the ACCU market, read our monthly ACCU Market Monthly Report
Learn more about our ACCU Market Forecast Report, a method-specific ACCU market supply, demand and price forecast
The New Zealand Unit (NZU) market rebounded in May, marking its first monthly gain since December 2024. Prices rose NZ$6.30 to close at NZ$55.55 on May 30, after bottoming out at NZ$48.90 in late April. A sharp recovery early in the month saw units jump NZ$4.55 in just nine trading days, followed by heightened volatility driving the market to a monthly high of NZ$56.00 on May 16.
Despite this uptick, NZU prices remain well below the NZ$68.00 floor set for the upcoming June 18 auction. Auctions have consistently failed to clear since late 2024, with the last partial clearance seeing just 4 million of over 11 million units sold at NZ$64.00. The Environmental Protection Authority (EPA), which administers the NZ ETS, raised the floor price this year, signalling its view that NZ$68.00 is the threshold for potential intervention in the market.
May’s price lift was attributed to a combination of reduced sell-side pressure and improved confidence. Project proponents, who had previously sold NZUs to bolster cashflow amid weak commodity markets, have now tightened supply in anticipation of price recovery. Meanwhile, improving commodity prices have eased the need to liquidate units. On the demand side, global political developments - including the re-election of progressive governments in Australia and Canada - helped reinforce longer-term climate policy certainty, offsetting some of the uncertainty stemming from U.S. policy shifts.
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Each month we feature a different international market - this month's focus is Singapore
Singapore finally signed an implementation agreement with Paraguay on 23 May, bringing it to a total of 7 countries from which international credits can be sourced to offset 5% of taxable emissions based on the Singapore carbon tax scheme.
Expanding the framework for using international credits, Singapore’s National Environment Agency also launched a tender for a subscription-based carbon ratings platform and a panel of expert organisations to assess the integrity and delivery of carbon projects and methodologies across a wide range of carbon crediting programmes (including Verra, Gold Standard, GCC, ACR, ART TREES). The third-party evaluations will be used to filter projects for additionality, permanence, and to avoid instances of double counting. The ratings will be used to determine whether credits align with Singapore’s criteria and broader international standards such as CORSIA and the ICVCM Core Carbon Principles.
To ramp up the usage of high-integrity carbon credits, the Singaporean government along with Kenya and the UK will launch a government-led coalition next month during London Climate Action week. The coalition aims to support climate projects and ensure real and measurable climate outcomes in collaboration with the Voluntary Carbon Markets Integrity Initiative (VCMI). More details on the coalition are expected to be released next month. In the meantime, this initiative is expected to increase credibility and confidence in the carbon market, help level the playing field between buyers and sellers,and reduce barriers to investment for project proponents.
For in-depth data, analysis and commentary on international carbon markets, including macro trends, CORSIA and Article 6 markets, explore our Carbon Intelligence Package.
The voluntary carbon market (VCM) stabilised in May, with record retirements and surging issuances, though oversupply and cautious sentiment kept prices subdued. Retirements rose sharply to 11.2 million credits - up 75% year-on-year -bringing the 2025 total to 70 million, the highest on record for the January–May period. Demand focused on newer vintages (V22, V23), hinting at increased interest in potential Article 6-eligible credits.
Issuances more than doubled from April to 26.1 million, driven by U.S.-based projects, including a 2.5 million credit tranche from an ozone-depleting substances project in Texas. The market surplus expanded to 817 million non-retired credits, deepening supply-demand imbalances.
Prices remained under pressure despite robust activity. Delta Blue Carbon credits continued to decline, while the Mai Ndombe REDD project helped steady the Top 20 index. Afforestation (ARR) credits bucked the trend, rallying above US$10.30/t after Microsoft signed an 18-million-unit forward deal with Rubicon.
Policy developments lent some support. The UK launched a review into large-scale carbon removals like BECCS and DACCS, while the EU and UK made progress toward integrating carbon dioxide removal (CDR) into compliance frameworks. Meanwhile, Xpansiv’s upcoming GEO-CP1 spot contract is expected to boost liquidity.
Interest in high-integrity credits remains strong, with 800,000 Core Carbon Principles (CCP)-tagged credits retired in May. Major buyers included Shell and UNSW, while Civitas Resources led with 0.6 million credits retired across forestry, energy efficiency, and landfill gas. June will test whether market demand can sustain and revive prices.
For in-depth data, analysis and commentary on the voluntary carbon market, explore our Carbon Intelligence Package.
For monthly deep dives on Australian and global biodiversity markets , including the interplays with carbon markets, explore our Carbon Intelligence Package.
Policy updates
In the US, the proposed “One Big Beautiful Bill Act” would extend the SAF tax credit (Section 45Z) to 2031, expand eligible feedstocks to include Canadian and Mexican inputs (excluding some Asian UCO), and remove ILUC emissions from lifecycle calculations.
The UK introduced a Revenue Certainty Mechanism to cap SAF cost impacts on airline tickets and support industry uptake. It also committed further funding for SAF development.
Globally, the Sustainable Aviation Buyers Alliance (SABA) issued its third RFP to aggregate long-term SAF demand and incentivise next-gen production technologies.
Investment highlights
In Australia, Ampol imported 2 million litres of unblended SAF from Malaysia — the country’s largest SAF import to date. The fuel is currently being blended with conventional jet fuel before undergoing testing and certification, after which is till be used on key flights departing from Sydney Airport.
In the US, SAF producer Gevo acquired a carbon credit-generating ethanol plant and plans to convert it to produce 65 million gallons of SAF, with expected carbon sequestration of up to 1 million tCO₂.
For monthly deep dives on Australian and global SAF uptake, including how it interplays with carbon markets, explore our CORE Markets Carbon Intelligence Package
The events outlined in this month’s update highlight the evolving nature of global carbon and environmental markets and the complexity of the net zero transition.
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Global Environmental Markets Report - May 2025
