ByteDance invests in carbon credits, strengthening a US climate infrastructure firm's carbon offset capabilities
The voluntary carbon credit market is witnessing a significant resurgence in 2025, with a surge in demand for high-quality credits and a focus on climate integrity. This transformation is underpinned by several key developments.
Record carbon credit retirements have been recorded in the first half of 2025, with 95 million credits being retired – the highest ever for a half-year period. This represents a 9% increase over H1 2024, and the total retirement value jumped 32%, indicating that buyers are paying more for verified, high-quality credits rather than just increasing volume [1][4].
Growing supply, however, is being outpaced by demand, driven by strong corporate commitments to net-zero targets and ESG (Environmental, Social, Governance) goals. In Q2 2025, issuances of new carbon credits rose to 77 million, up 39% from the previous quarter and 14% from the same period in 2024 [1][4].
The market is shifting from quantity to quality, with buyers becoming increasingly selective, prioritizing credits that deliver real climate impact, especially carbon removals over traditional avoidance credits. Around 57% of retired credits in H1 2025 had above BB ratings (Sylvera-rated), reflecting enhanced standards and a focus on integrity [1][4].
The voluntary market is also expanding in project types, including nature-based solutions, blue carbon, carbon farming, and community-based initiatives. Platforms utilizing blockchain and digital MRV (monitoring, reporting, verification) technologies are improving transparency and accessibility [2].
Unlike compliance markets, voluntary markets are not restricted by regulatory caps, allowing businesses to offset unavoidable emissions as part of broader sustainability and branding strategies. This encourages innovation and faster market growth, estimated to increase significantly in value from about USD 933 billion in 2025 to over USD 16 trillion by 2034 [2].
Notable players in the market include Microsoft, which announced a major investment in carbon credits with the goal of becoming carbon negative by 2030. ByteDance, the parent company of TikTok, has also purchased rights to over 100,000 tonnes of carbon credits, aiming to meet a net zero target by 2030 and plans to reduce at least 90% of its operational emissions [3].
The carbon removal deal between Microsoft and Brunel is significant as it demonstrates potential for the voluntary carbon credit market. TPG Rise Climate, a dedicated climate investment strategy, was an early backer of Rubicon Carbon and remains a majority shareholder [6].
The outlook for the voluntary carbon credit market remains highly positive, with rapid growth expected as companies intensify efforts to meet net-zero ambitions and invest in sustainable projects with proven climate outcomes [1][2][4]. There is a clear trend toward credits that remove carbon from the atmosphere, viewed as essential for meeting ambitious climate goals. Emphasis on transparency and integrity, continued development of rating systems, verification standards, and technology platforms will further support growth and higher pricing for quality credits [1][4].
Expansion into varied project classes, including afforestation/reforestation, efficient cookstove distribution, and community-based projects, will provide broader environmental and social benefits alongside carbon savings [5]. As the world moves towards a low-carbon future, the voluntary carbon credit market is poised to play a crucial role in helping corporations achieve their climate goals.
References: [1] Sylvera, "H1 2025 Voluntary Carbon Market Report" [2] EY, "The Future of Carbon Markets" [3] ByteDance, "ByteDance Announces Carbon Neutrality Goals" [4] Carbon Market Watch, "Voluntary Carbon Market Trends in 2025" [5] World Resources Institute, "Expanding the Voluntary Carbon Market" [6] TPG, "TPG Rise Climate Announces Investment in Rubicon Carbon"
- The surge in demand for high-quality carbon credits in 2025 is not only driving the voluntary carbon market's resurgence but is also propelling the market to shift from quantity to quality, with buyers increasingly prioritizing credits that deliver real climate impact, such as carbon removals.
- The voluntary carbon market's expansion in 2025 is not limited to carbon removals but also includes a diversification in project types, with the inclusion of nature-based solutions, blue carbon, carbon farming, and community-based initiatives, thanks to the increased use of blockchain and digital MRV technologies improving transparency and accessibility.
