Carbon Credit Demand Hits Record Highs: What It Means for Timberland Investors

September 9, 2025

The Carbon credit demand appears to be reaching new highs, and we believe timberland values stands to benefit.

The voluntary carbon market is growing rapidly, creating new opportunities for timberland owners to generate income from the carbon their forests store.

Key market trends (H1 2025):

Record Demand: 95 million carbon credits were retired globally, the highest half-year on record, according to Sylvera, which is a clear signal of growing demand.
Growing Supply: 77 million new credits were issued in Q2 2025, up 39% from the prior quarter and 14% higher than Q2 2024.
Higher Quality: 57% of H1 retirements were rated BB or above, reflecting strong buyer preference for verifiable, high-integrity offsets.

Why this matters for timberland investors:

Rising carbon credit retirements show more organizations are actively buying and using credits, not just trading them. For timberland investors, this demand can create new income from forest carbon projects alongside traditional timber revenue. With buyers seeking high-quality offsets, we believe timberland investments are well positioned to capture this opportunity and potentially enhance long-term value.

If you’re an RIA looking to diversify your clients’ portfolios with real assets, let’s connect.

Categories: Real Assets, Timberland

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