Voluntary Carbon Market Prices Plumb New Lows as CORSIA Benchmark Slides to $10/Tonne
CORSIA benchmark prices dropped to their weakest point since mid-2024 in May, even as retirements and issuances grew, leaving the market structurally split.
Benchmark prices in the voluntary carbon market fell to their lowest point in more than a year in May (2026-05-31), underlining persistent weakness in a segment that has struggled to establish durable price floors since the 2021-22 peaks.3
CORSIA-eligible credits dropped 22% through May (2026-05-31) to around $10 per tonne, their lowest level since June 2024, according to Carbon Pulse data. The decline came even as issuances and retirements of carbon credits rose year-on-year across the broader voluntary market in May (2026-05-31), pointing to a market where activity is recovering but prices are not.3
That divergence matters for nature-based solutions specifically. Projects generating credits from forests, wetlands and soil carbon face a structural disadvantage: their costs are largely fixed by land management and monitoring requirements, while clearing prices have been sliding. For vintage 2020-2024 nature-based credits — the timeframe covered by the ICEEUR OVDM2027 futures contract — the declining CORSIA floor is a direct headwind.1
The voluntary carbon market remains modest in absolute terms. Annual volume runs around $2bn, according to Economist research, a fraction of compliance schemes like the European Union Emissions Trading System, which banned the use of offsets entirely in 2013. That confinement shapes who buys nature-based credits: corporates seeking to meet voluntary net-zero commitments, CORSIA-eligible airlines, and increasingly, buyers acting to satisfy Science Based Targets initiative guidance.1
On that front, a June 12 (2026-06-12) analysis from Carbon Pulse suggests the new SBTi corporate climate standard could provide a more structured pathway for nature-based carbon finance, even as the initiative's primary focus remains on technology-based carbon removals. Companies aligning to updated SBTi guidance may use nature-based credits for a portion of residual emissions, providing a clearer buyer base than the fragmented corporate ESG commitments that previously drove demand.4
Still, the supply side creates headwinds. Issuances rising faster than retirements in a low-price environment typically signals accumulation of unsold inventory rather than strong demand. For ICEEUR:OVDM2027 — a Jun 2027 delivery contract covering vintage 2020-2024 credits — that inventory overhang is the central risk. If credits issued in the peak 2020-2022 period remain unliquidated at current prices, the clearing price at expiry faces sustained downward pressure.3
India represents one emerging source of new nature-based supply. The country's voluntary carbon market is developing under the new Carbon Credit Trading Scheme, with legal questions around forestry project ownership, additionality verification and permanence risk still being resolved. New supply from large emerging markets entering a market already soft on price would compound the oversupply pressure visible in CORSIA pricing.2
The compliance market offers limited relief. The EU ETS excludes offsets, and most other compliance schemes that allow them cap their use tightly. Australia's Safeguard Mechanism permits some voluntary offsets, but the scale is insufficient to absorb broader VCM inventory.1
For the OVDM2027 contract, traders are pricing in some recovery by June 2027. Whether corporate demand — reinforced by revised SBTi guidelines and potential CORSIA aviation compliance — can absorb vintage 2020-2024 supply at levels meaningfully above the current $10/tonne floor depends on the pace of airline sector obligations and how quickly India and other new supply sources bring additional credits to market. The SBTi implementation timeline, set against an already-soft CORSIA price, will determine whether the forward premium reflects genuine demand recovery or misplaced optimism in a market that has frustrated participants for three consecutive years.3,4