This report is published monthly and provides a high-level overview of the key developments in select compliance and voluntary carbon, 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, and Sustainable Aviation Fuel markets.
*Please note: This report is produced using select data, commentary and insights as available in full to our Carbon Intelligence Package subscribers.
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The ACCU market extended July’s momentum into August, with traded volumes remaining elevated and prices pushing to their highest levels since December last year. Generic spot ACCUs closed at A$36.90, up A$1.35 month-on-month, breaking above the A$34.00–36.00 range that had held for much of 2025. Human-Induced Regeneration (HIR) spot parcels tracked firm, while No Avoided Deforestation (No AD) ACCUs reached A$37.75 late in the month, the strongest level recorded for either product since December 2024. Plantation Forestry parcels also cleared at a modest premium, though liquidity outside the major spot markets remained limited.
Overall turnover reached 3.7 million units across spot, forwards, derivatives, and swaps, easing 12% from July’s record spike but still well above historical norms. Derivatives activity contributed 1.4 million units, down from last month’s peak yet underscoring their continued central role in market liquidity. Forward structures extended to late 2026, maintaining a contango profile and reflecting ongoing positive carry conditions.
Safeguard Mechanism Credits (SMCs) again saw minimal activity, with two 10,000-unit parcels trading at A$36.90. The SMC–Generic spread narrowed to A$0.35, firming the differential that has emerged in recent months. Market participants noted that Safeguard compliance buying remained a dominant feature, with some entities advancing hedging strategies to manage exposures ahead of next year’s compliance deadline.
Policy signals continued to shape positioning. The Productivity Commission’s interim report recommended expanding the Safeguard Mechanism’s coverage to facilities emitting between 25,000 and 100,000 tonnes CO₂-e, while reaffirming unrestricted use of ACCUs. These recommendations, alongside growing anticipation of Australia’s 2035 emissions target, added to expectations that compliance demand will increase in the medium term.
On the supply side, issuance slowed to 1.55 million units in the month to 31 July, down 34% from June and 28% below the Q2 monthly average. Savanna Fire Management projects contributed 38% of supply and HIR a further 36%. Attention is also on the Climate Change Authority’s advice on the 2035 NDC target, due in September, which is expected to further influence compliance demand expectations and long-term positioning.
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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
August saw the New Zealand ETS trade in a relatively narrow range, with NZUs fluctuating between NZ$55.50 and NZ$57.65 before closing the month NZ$1.55 higher at NZ$58.00. The market responded in part to government announcements on allocation and auction settings, though prices ultimately consolidated just below the levels reached earlier in the year.
On August 11, the government confirmed that the 2025 electricity allocation factor (EAF) would be adjusted down by 7%, reducing the number of free NZUs available to industrial participants. The announcement prompted a rally of NZ$1.50, with prices touching NZ$57.25 before easing back to the monthly low of NZ$55.50. Later in the month, confirmation that the government would maintain last year’s ETS settings, including the auction supply schedule, lifted the market to NZ$56.90, though momentum again faded, with NZUs retreating to NZ$56.10 before late buying pushed prices higher into month-end.
Trading in the final days of the month saw prices rise NZ$1.80, reaching the monthly high of NZ$58.00 at the close. Market attention now turns to the upcoming quarterly auction on September 10, which will offer 4.5 million NZUs at the auction floor of NZ$68.00.
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At its 17th meeting, the Article 6.4 Supervisory Body (SBM) made an important decision regarding the treatment of the fraction of non-renewable biomass (fNRB) in clean cooking projects.
The SBM ruled that project participants must either apply the most recent default values, such as those set out in the revised TOOL33: Default values for common parameters adopted by the Clean Development Mechanism (CDM) Executive Board, or propose new approaches for calculating baselines for SBM consideration.
The new framework eliminates the single global default and instead provides default fNRB values at the regional or national level that developers can apply if country-specific studies are not available.
Cookstove projects have historically represented one of the largest sources of international credit issuance, making up around 14% of supply across the voluntary carbon market. With stricter fNRB requirements expected to lower credit outputs, the decision could significantly reshape overall market supply, tightening volumes across the market.
For in-depth data, analysis and commentary on international carbon markets, including macro trends, CORSIA and Article 6 markets, explore our Carbon Intelligence Package.
Singapore has signed an Implementation Agreement with Thailand to support its Internationally Transferred Mitigation Outcomes (ITMO) procurement. This brings the total to eight countries from which it can be source international credits to meet its carbon tax obligation. Details on the authorisation process for carbon credits projects and eligible methodologies under the Implementation Agreement are yet to be published.
Singapore has committed to directing the value equivalent of a 5% share of proceeds from authorised carbon credits towards climate adaptation initiatives in Thailand. These include sustainable forest management, flood resilience infrastructure, and water resource management.
As with other Implementation Agreements under the Article 6 framework, Singapore will cancel 2% of the correspondingly adjusted carbon credits at the point of first issuance. These cancelled credits cannot be sold, traded, or counted towards any country’s emissions targets.
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) saw mixed conditions in August, as registry data pointed to a narrowing surplus while futures pricing reflected ongoing policy uncertainty. Across the five largest registries, the balance of issuances to registrations ticked down 0.75% to 53.7 million certificates for the year to date. The surplus of issuances over registrations was 10 million certificates lower than at the same point in 2024, a year-on-year decline of 16%. The contraction was driven by a deeper deficit in the Verra VCS registry alongside a materially smaller surplus of Gold Standard issuances, down more than 25% year-on-year.
Market sentiment remained cautious, with the end of the CORSIA Phase 1 pilot in January still weighing on eligible contracts. The Dec-25 futures contract dropped 5% to US$15.50 in the week to August 7, reflecting concerns around the participation of US-based airlines amid shifting rhetoric from the new Trump administration. However, liquidity appeared to improve, with open interest in Phase 1-eligible contracts rising from under 150 lots in early August to 225 lots mid-month across the Dec-25 to Dec-27 curve. Renewed activity helped the ICE Phase 1 Dec-25 contract rebound more than US$1.00, closing at US$16.25 on August 7.
Attention now turns to the regulatory landscape, where market participants are closely tracking the US administration’s evolving stance toward voluntary markets. Declines in Verra and CAR issuances have heightened speculation over supply constraints, while an imminent decision from the Integrity Council for the Voluntary Carbon Market on cookstove methodologies is expected to set the tone for upcoming crediting rules and market direction.
For in-depth data, analysis and commentary on the voluntary carbon market, explore our Carbon Intelligence Package.
In late August, Qantas and Air New Zealand released their annual financial results, offering new insights into their carbon credit strategies. While the only currently eligible credit type (Guyana jurisdictional REDD+) under CORSIA remains unchanged, the disclosures could indicate how airlines are positioning themselves ahead of anticipated eligibility expansions.
Notably, Air New Zealand and Qantas place nature-based removals at the forefront of their forward-looking offset strategies, while both Qantas and Singapore Airlines (June 2025 annual report) have included cookstove credits in their portfolios to date. Cookstove projects are expected to become a significant source of CORSIA-eligible credits, suggesting that these airlines are hedging their bets by investing early in potentially qualifying offsets.
Air New Zealand anticipates that carbon credits will contribute between 11% and 48%of its total emissions reductions by 2050. The airline acknowledges that residual emissions - those not addressable through fleet upgrades, operational efficiencies, or sustainable aviation fuel(SAF) - will require offsetting due to technological, cost, or feasibility constraints. In its FY2025 report, Air New Zealand revised its forecast upward for the volume of credits needed by 2050, citing lower-than-expected contributions from other decarbonisation levers. To support the development of New Zealand’s nascent voluntary carbon market, the airline has published a Voluntary Nature-Based Removals Position Statement and signed a letter of intent with one supplier, with another agreement in progress.
Qantas reported that 70% of its voluntary carbon portfolio now consists of nature-based projects, with half of the portfolio linked to an Australian-based project. It has previously disclosed that its portfolio was made up of savanna fire management projects in Arnhem Land (ALFA NT), energy-efficient cookstoves in Ethiopia (World Vision), and rainforest conservation in Papua New Guinea (April Salumei, TEM). Its FY2025 strategy aimed to reflect key regulatory developments in its investment principles and has committed to sourcing 25% of its carbon offset portfolio from Indigenous-owned and operated projects.
Collectively, these airlines are demonstrating a proactive approach to carbon credit investment, with a strong emphasis on nature-based solutions and community engagement. Their inclusion of cookstove projects reflects strategic foresight, anticipating future shifts in CORSIA eligibility.
For in-depth data, analysis and commentary on international carbon markets, including macro trends, CORSIA and Article 6 markets, explore our Carbon Intelligence Package.
As per the Sustainable Aviation Buyers Alliance SAFc registry, 10,385 tonnes of SAF linked to credits was retired in August, representing a staggering increase of 86% from last month. Credit retirements were recorded in Spain, US, China, and Singapore leading to 34,204 tonnes of CO2 abated this month, almost doubling July levels.
Consistent with last month, United Airlines represent the majority (51%) of total SAF retired with 5260 MT SAF, followed by Southwest Airlines with 4847 MT SAF in August. All credits were generated using Hydroprocessed Esters and Fatty Acids (HEFA) methodologies, and almost all of the retired credits were used to offset Scope 1 emissions, with only 2% used to claim for Scope 3.
As of 31 July 2025, the UK’s first provisional SAF Mandate statistics show 5,814 million litres of total aviation fuel supplied, equating to 197,666 TJ. Of this, ~75 million litres (2,555 TJ) came from regular SAF, representing ~1.3% of total supply, while ~5,739 million litres (195,111 TJ) came from fossil fuels. No Power-to-Liquid SAF was reported. SAF uptake remains below the 2025 mandate target of 2%, though future datasets will add verified SAF Certificates (SAFc), trades, and carbon sustainability characteristics as they are processed.
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 - August 2025
