Interview: Practitioners on Carbon markets & offsets integrity — what they wish they knew earlier

The voluntary carbon market grew to $2.1 billion in 2024 according to Ecosystem Marketplace, a recovery from the post-2023 integrity crisis that saw trading volumes drop by nearly 40%. Compliance markets, meanwhile, expanded to over $950 billion globally, with the EU Emissions Trading System (ETS) allowance prices stabilizing between 60 and 75 euros per ton. Yet for procurement professionals, sustainability officers, and project developers, the practical realities of navigating carbon markets remain far more complex than the headline numbers suggest. We spoke with five practitioners across the Asia-Pacific region to surface the lessons they wish someone had shared with them at the start of their carbon market journeys.

The Practitioners

Mei Lin Chen is Head of Carbon Strategy at a Singapore-based commodity trading firm that transacts over 15 million tons of carbon credits annually across voluntary and compliance markets.

Dr. Rajesh Patel leads the climate finance practice at an Indian development finance institution that has structured carbon credit revenue streams for over 40 renewable energy and clean cooking projects since 2019.

Tomoko Ishikawa manages voluntary carbon credit procurement for a Japanese manufacturing conglomerate with Scope 3 emissions exceeding 80 million tons CO2e annually.

David Nguyen is co-founder of a Vietnamese carbon project developer focused on mangrove restoration and avoided deforestation projects in the Mekong Delta.

Sarah Kim directs carbon market policy advisory at a Seoul-based consultancy that helped design South Korea's K-ETS and advises several ASEAN governments on compliance market development.

On Getting Started: The Learning Curve Nobody Warns You About

Mei Lin Chen: The first thing I wish I had understood is that carbon markets are not a single market. They are dozens of overlapping systems with different rules, registries, vintages, and quality benchmarks. When I started in 2019, I assumed a carbon credit was a carbon credit. That assumption cost my firm real money. We purchased 500,000 Certified Emission Reduction (CER) credits under the Clean Development Mechanism expecting to use them for voluntary claims. Our clients rejected them because CERs from large hydro projects in China carried reputational risk. Nobody in our onboarding process explained that registry origin, project type, and vintage interact to determine whether a credit is actually usable for a buyer's specific purpose.

Dr. Rajesh Patel: For project developers, the learning curve is even steeper. We spent 14 months developing our first Gold Standard clean cooking project in Rajasthan. The methodology seemed straightforward on paper, but the monitoring, reporting, and verification (MRV) requirements consumed 60% of our total project development budget. We had budgeted $150,000 for the full development cycle and ended up spending $380,000 before issuing our first credits. The third-party validation audit alone took six months and required three rounds of revisions to our monitoring plan. I tell every new developer: triple your timeline estimates and double your budget for the first project.

Tomoko Ishikawa: From the buyer side, the challenge is internal alignment. Our procurement team understood carbon credits as a commodity purchase. Our sustainability team viewed them as a strategic tool for climate claims. Our legal team treated them as a regulatory compliance instrument. And our communications team wanted to use them for consumer-facing messaging. Each function had different requirements for credit quality, documentation, and reporting. It took us 18 months to develop an internal carbon credit procurement policy that satisfied all stakeholders. The policy we eventually adopted requires all credits to meet Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles, limits offset use to no more than 10% of our near-term reduction pathway, and mandates that at least 50% of purchased credits be carbon removals rather than avoidance credits by 2028.

On Quality and Integrity: Hard Lessons Learned

David Nguyen: The integrity crisis of 2023 was devastating for developers like us who were doing legitimate work. When The Guardian and Die Zeit published their investigation of Verra's REDD+ credits, alleging that more than 90% of rainforest offset credits were phantom credits that did not represent genuine carbon reductions, it collapsed demand across all nature-based project types. Our mangrove restoration project in Ca Mau province had robust baseline data, conservative additionality arguments, and satellite-verified carbon sequestration measurements. None of that mattered initially. Buyers grouped all nature-based credits together and withdrew. Our credit sales dropped 70% in three months.

What I learned is that quality differentiation must be proactive, not reactive. We now publish our monitoring data on an open platform, use satellite imagery from Planet Labs for independent verification, and have our baselines reviewed by academic researchers at Can Tho University. This transparency has rebuilt buyer confidence, but it adds $40,000 to $60,000 per year in costs. The painful truth is that high-integrity projects carry higher costs, and the market does not always reward that investment proportionally.

Sarah Kim: From a policy perspective, the 2023 integrity crisis accelerated regulatory intervention in ways that most market participants did not anticipate. South Korea's revised K-ETS regulations, effective January 2025, now restrict the use of international offset credits to those that meet Article 6.4 of the Paris Agreement requirements, including corresponding adjustments from the host country. Indonesia's Presidential Regulation 98/2021, which established a domestic carbon trading framework, requires all credits used for compliance to be registered in the national registry (SRN) with government approval. These rules fundamentally changed the commercial viability of many existing credit supplies.

The lesson for practitioners is that carbon market regulation in Asia-Pacific is evolving faster than most industry participants realize. What was a permissible credit last year may not be usable next year. Building compliance monitoring into your procurement or development strategy is not optional.

Mei Lin Chen: I would add that vintage risk is the most underappreciated issue in carbon credit trading. Credits issued from projects registered before 2016 now face systematic discount in both voluntary and compliance markets. The ICVCM assessment process effectively obsoleted older methodologies, and major buyers including Microsoft, Google, and Stripe have publicly committed to purchasing only credits issued under post-2020 methodologies. We held an inventory of 2 million pre-2016 vintage CERs that lost approximately 85% of their value between 2022 and 2024. Inventory management, including vintage rotation and methodology tracking, is now a core competency for any trading desk.

On Pricing and Market Dynamics

Tomoko Ishikawa: Pricing in the voluntary carbon market is genuinely opaque compared to compliance markets. When we began procurement in 2020, quoted prices for nature-based credits ranged from $4 to $45 per ton for credits that appeared similar on paper. We discovered that price variation reflects real quality differences, but also reflects information asymmetry, broker margins, and negotiating leverage. Our first major purchase, 200,000 tons of REDD+ credits at $12 per ton, would have cost $6 to $8 per ton if we had gone directly to the project developer rather than through a broker.

We now maintain relationships with 15 project developers across Southeast Asia and purchase 80% of our credits directly, with the remainder sourced through exchanges (primarily Climate Impact X in Singapore) for liquidity and price discovery purposes. Direct relationships also give us access to forward purchase agreements at fixed prices, which is essential for budgeting multi-year procurement strategies.

Dr. Rajesh Patel: On the supply side, pricing dynamics in Asia-Pacific have shifted dramatically. Indian renewable energy credits that sold for $3 to $5 per ton in 2021 now trade at $1 to $2 after the ICVCM raised additionality bars. Projects in countries with strong renewable energy policies struggle to demonstrate that carbon credit revenue was the decisive factor in project development. Meanwhile, cookstove credits from India and Bangladesh that meet the Gold Standard's updated Metered and Measured methodology command $15 to $25 per ton, reflecting higher MRV costs but also higher buyer willingness to pay for credits with strong co-benefit narratives.

The pricing lesson for developers is that methodology selection is the single most important commercial decision you will make. A project developed under a methodology that the market considers robust will command 3 to 5 times the price of the same emission reduction quantified under a weaker methodology.

On Article 6 and Corresponding Adjustments

Sarah Kim: Article 6 of the Paris Agreement is the most consequential and least understood issue in carbon markets today. The concept of corresponding adjustments requires that when a carbon credit is transferred internationally for use toward another country's climate targets, the host country must adjust its own emissions accounting to avoid double counting. This sounds simple in principle but is extraordinarily complex in practice.

As of early 2026, only 14 countries have formally authorized corresponding adjustments for carbon credit transactions. Singapore's bilateral agreements with Papua New Guinea, Ghana, and Paraguay represent the most advanced implementation in Asia-Pacific, but even these agreements cover only specific project types and have annual volume caps. Japan's Joint Crediting Mechanism (JCM) operates under bilateral agreements with 29 partner countries, but JCM credits were designed before Article 6 finalization and many existing projects require renegotiation to comply with corresponding adjustment requirements.

For procurement professionals, the practical implication is clear: carbon credits purchased without corresponding adjustments cannot be used to claim emission reductions under the Voluntary Carbon Markets Integrity Initiative (VCMI) Claims Code if the buyer's target is linked to national or international frameworks. This limits their usability for companies making claims aligned with the SBTi Beyond Value Chain Mitigation guidance.

David Nguyen: From a developer perspective, corresponding adjustments add a layer of sovereign risk that fundamentally changes project economics. Vietnam has been slow to establish its corresponding adjustment framework, creating uncertainty about whether credits from Vietnamese projects will be authorized for international transfer. Several of our potential buyers have paused forward purchase negotiations pending clarity. We have responded by diversifying our revenue model: 40% of our credits are now sold to Vietnamese domestic buyers (primarily Japanese companies operating in Vietnam that can use credits against their local emissions), reducing our dependence on international transfers.

On What They Would Do Differently

Mei Lin Chen: I would invest in data infrastructure from day one. We built our trading desk on spreadsheets and email chains for the first three years. When transaction volumes grew past 5 million tons per year, we had no systematic way to track credit provenance, vintage, methodology, registry status, and counterparty information. We spent $1.2 million on a custom registry management system that we could have built for $300,000 if we had started with proper architecture.

Dr. Rajesh Patel: I would start with the buyer in mind. Our first two projects were designed around maximizing credit issuance volumes. Our third project was designed around what specific buyers actually want: high co-benefit documentation, robust MRV, conservative baselines, and compelling narratives for stakeholder communication. The third project generates 40% fewer credits per dollar invested but commands 4 times the per-ton price. Net revenue is 2.4 times higher.

Tomoko Ishikawa: I would hire or develop carbon market expertise internally rather than relying exclusively on consultants. We spent $800,000 on advisory fees in our first two years. The knowledge left our organization when each engagement ended. Building an internal team of three specialists cost roughly the same on an annual basis but created institutional knowledge that compounds over time.

David Nguyen: I would build community relationships before starting project development. Our first REDD+ project faced significant delays because we underestimated the time required for free, prior, and informed consent (FPIC) processes with local communities in the Mekong Delta. Communities that had experienced previous conservation projects with broken promises were rightfully skeptical. We now begin stakeholder engagement 12 to 18 months before formal project design, and our community liaison team is the largest department in our organization.

Sarah Kim: I would track regulatory developments in real time rather than responding reactively. Carbon market regulation in Asia-Pacific changes quarterly. Companies that monitor regulatory pipelines and engage in consultation processes gain 12 to 18 months of lead time compared to those that wait for final rules. We now maintain a regulatory tracking database covering 14 Asia-Pacific jurisdictions, updated weekly.

Action Checklist

• Develop an internal carbon credit procurement policy that specifies acceptable registries, vintages, methodologies, and quality standards before making purchases
• Require all credits to meet or exceed ICVCM Core Carbon Principles as a minimum quality floor
• Build direct relationships with at least three to five project developers to reduce broker dependency and improve price transparency
• Monitor corresponding adjustment frameworks in host countries for all internationally sourced credits
• Establish an internal carbon market knowledge function rather than relying exclusively on external advisors
• Track regulatory developments across all jurisdictions where your company operates or sources credits
• For developers: design projects around buyer requirements and co-benefit documentation from inception
• Implement systematic credit inventory management tracking vintage, methodology, registry status, and counterparty data
• Align carbon credit use with VCMI Claims Code guidance, limiting credits to beyond value chain mitigation rather than substituting for direct reductions

Sources

• Ecosystem Marketplace. (2025). State of the Voluntary Carbon Markets 2025: Market Recovery and Integrity Reforms. Washington, DC: Forest Trends.
• Integrity Council for the Voluntary Carbon Market. (2024). Core Carbon Principles Assessment Framework: Category-Level Results. London: ICVCM.
• Voluntary Carbon Markets Integrity Initiative. (2024). Claims Code of Practice: Guidance for Companies Using Carbon Credits. London: VCMI.
• World Bank. (2025). State and Trends of Carbon Pricing 2025. Washington, DC: World Bank Group.
• Climate Focus. (2025). Corresponding Adjustments Under Article 6: Status of Implementation Across Jurisdictions. Amsterdam: Climate Focus.
• Ministry of Environment, Republic of Korea. (2025). K-ETS Revised Operational Guidelines: International Credit Eligibility. Seoul: Ministry of Environment.
• Science Based Targets initiative. (2024). Beyond Value Chain Mitigation Guidance. CDP, UNGC, WRI, WWF.
• Republic of Indonesia. (2021). Presidential Regulation No. 98/2021 on Carbon Economic Value. Jakarta: Government of Indonesia.