The flight to quality: What the data tells us about the Voluntary Carbon Market
Explore our exclusive data revealing the carbon market's rapid shift toward high-quality, CCP-labeled credits.
The Voluntary Carbon Market (VCM) is undergoing a significant transformation. But what does the actual data tell us about where the market is heading?
At Cawa, we recently built our own search engine tool that integrates public data from all major VCM registries (including Verra, Gold Standard, ACR, CAR, Puro.earth, ICR, Rainbow and CSI). This gives us a comprehensive view of every issuance, retirement, and status change across the market.
In this blog, we dive into the data to uncover the truth behind the run for quality and what it means for your carbon credit procurement strategy.
The rise of the Core Carbon Principles (CCP) label
One of the most significant shifts in the market is the rapid adoption of the Core Carbon Principles (CCP) label. Developed by the Integrity Council for the Voluntary Carbon Market (ICVCM), the CCP label serves as a science-based global benchmark for high-integrity carbon credits.
When a credit carries the CCP label, it indicates that it reflects a real, additional, and verifiable emissions reduction or removal, and that the underlying project meets strict environmental and social safeguards.
While the ICVCM was established in 2021, CCP-labeled credits only began entering the market in mid-2024. Since then, a growing number of methodologies across major registries have been reviewed and updated to align with these strict requirements.
Crucially, the CCP label can be applied retroactively. Once a methodology is approved, credits issued under that methodology in earlier years can become eligible for the label. This is why our data shows vintages going back as far as 2008 carrying the CCP label.
As more methodologies pass the ICVCM's assessment, the share of CCP-labeled credits has risen sharply. For the most recent vintages, labeled issuances already exceed the 20% mark.
This trend is clear: higher-quality standards are becoming embedded in the market. The CCP label is rapidly shifting from a market differentiator to a baseline expectation for corporate buyers.
A deep dive into the US carbon market
To understand the mechanics of the VCM, it helps to look at the historical leader in issuances: the United States.
According to our search engine data, the U.S. has issued nearly 618 million credits until March 2026. However, a closer look reveals a startling statistic: more than 75% of these issued credits have not yet been retired.
- Total Issued: 617,993,269 credits
- Total Retired: 154,968,889 credits
- Remaining Stock: 463,024,380 credits
Where are these credits coming from?
Breaking down the U.S. issuances by category highlights the current imbalance in the market:
- Nature-based solutions (NBS): The dominant source, accounting for 50% of issuances (over 312 million). NBS projects are known for generating large volumes, and interestingly, the U.S. already has NBS issuances registered for the year 2059.
- Industrial processes: Accounting for 42% (over 261 million issuances). The first industrial project in the U.S. dates back to the year 2000.
- Engineered carbon removals: These high-tech removals currently account for just 0.1% of issuances (roughly 772,000).
While engineered removals (like Direct Air Capture) are critical for neutralizing residual emissions and achieving net-zero, they currently represent a tiny fraction of the available supply. Interestingly, half of these engineered removals are retired, a significantly higher retire rate than the broader U.S. market, where only a quarter of all issued credits have been retired.
What this means for your carbon credit strategy
The data points to a market in transition. There is a massive stock of unretired credits, while at the same time, a clear "flight to quality" is underway, driven by the adoption of the CCP label and the urgent need to scale permanent carbon removals.
If you are prioritizing price over quality and integrity, you risk ending up with credits from that massive pool of unretired stock that may fail in achieving real impact. Instead, sustainability leaders must shift their focus to high-quality, high-integrity credits.
At Cawa, we provide the infrastructure for this high-integrity climate action. Our integration tool gives us unparalleled visibility into the market, allowing us to connect you directly with vetted project developers. By replacing old trader and broker models with a transparent platform, we ensure your budget funds real climate action, backed by real data. Want to know more about the quality of our projects? Speak to an expert here
