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Carbon Market Watch asserts that private jet use in Europe is under-regulated despite being the most polluting form of travel. The organization proposes multiplying the carbon price by four for private jets and expanding the scope of the EU Emissions Trading System (EU ETS) to cover the 67% of private jet emissions currently exempt. Such measures could raise between €304 million and €2.2 billion annually by 2030, depending on the scope of coverage and the inclusion of non-CO2 effects. The document also advocates for aviation fuel taxation and the prioritization of low-cost solutions, such as contrail avoidance, over subsidies for unsustainable bio-kerosene.

The report argues that fossil fuel supermajors use the voluntary carbon market (VCM) as a strategic pillar to maintain a green image while continuing carbon-intensive operations. It details how these companies and trade associations like IETA and API lobby for weaker credit quality standards and increased flexibility in offsetting Scope 3 emissions. The document specifically critiques the governance of the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI), alleging that the inclusion of industry representatives in decision-making roles creates significant conflicts of interest that risk diluting integrity standards.

Carbon Market Watch claims the European Commission is routinely ignoring or bypassing required impact assessments and public consultations for major climate policies. The author asserts that this shift toward 'vibe-based' policymaking, driven by deregulation and industry lobbying, undermines transparency and risks significant economic and environmental damage, citing specific examples such as the 2040 climate target and the EU ETS2 Market Stability Reserve.

Carbon Market Watch supports the early auctioning of 450 million ETS2 allowances to address a €6.8bn funding gap in the Social Climate Fund for 2027 caused by a one-year delay in the system's start. The organization argues that these revenues should be ringfenced for the Social Climate Fund to help member states implement National Social Climate Plans and protect vulnerable households. Additionally, it supports the requirement that only member states that have transposed the legislation can access auctioning revenues to incentivize timely implementation.

The proposal outlines a structured approach to scaling permanent carbon dioxide removals in the EU through a three-stage strategy: early-stage research and innovation (TRL 1-5), a pilot procurement programme for mature technologies (TRL 6-9), and the eventual establishment of an EU Permanent Removals Compliance Scheme (EU RCS) by 2035. The framework defines permanent removals as those storing CO2 for at least 1,000 years and introduces 'Atmospheric Removal Credits' (ARCs) managed by a Central Purchasing and Reselling Platform (CPRP). The proposal emphasizes that removals must not substitute for emissions reductions and should adhere to strict sustainability, human rights, and 'do no significant harm' criteria.

The document assesses the potential for an Emissions Trading System for Agriculture (Agri-ETS) in the EU, arguing that such a system would only be effective if it targets large-scale polluters, avoids free allowances and carbon offsets, and is integrated into a wider suite of reforms. It highlights the risks of 'GHG tunnel vision' and the necessity of reforming the Common Agricultural Policy (CAP) to stop subsidising harmful practices. The author advocates for a 'Just Transition Fund for Agri-food' to support small-scale farmers using Agri-ETS revenues.

Carbon Market Watch argues that Verra's VM0052 methodology for coal transition credits is flawed and risks issuing low-quality credits that do not represent real emission reductions. The briefing identifies critical failures in additionality testing, baseline setting, leakage prevention, and just transition safeguards, specifically highlighting risks in the Philippines' energy context. It recommends a total suspension of the methodology until significant revisions are made to prevent overissuance and carbon leakage.

Carbon Market Watch concludes that Verra's VM0052 methodology for coal-to-clean carbon credits is inadequate and should not be used to issue credits in its current form. The report identifies critical risks of carbon leakage, over-estimation of emission reductions due to static baseline assumptions, and potential double counting. It also finds that the 'just transition' requirements are too vague and susceptible to manipulation, particularly regarding benefit-sharing and worker compensation. Using the South Luzon Thermal Energy Corporation (SLTEC) project in the Philippines as a case study, the report illustrates how independent power producers could build new coal plants to replace retired capacity, nullifying climate benefits. The author urges Verra to suspend the methodology and implement substantive revisions.

Carbon Market Watch argues that Verra’s VM0052 methodology for coal transition credits is significantly flawed and should be put on hold. The briefing identifies critical risks of carbon leakage due to low renewable energy pairing requirements, weaknesses in baseline-setting and additionality tests, and inadequate safeguards against double issuance. It also finds that just transition provisions are unreliable, particularly regarding benefit-sharing and stakeholder mediation. Using a case study of the South Luzon Thermal Energy Corporation (SLTEC) in the Philippines, the document illustrates how the methodology could allow for the overissuance of credits that do not represent real emission reductions.

The report investigates whether corporate use of carbon credits substitutes or complements internal emission reductions. A review of existing literature shows mixed results: while several studies find a positive correlation between carbon credit use and internal emission reductions, a peer-reviewed study by Stolz and Probst (2025) finds no significant correlation and provides qualitative evidence of 'mitigation deterrence' in some cases. Interviews with companies indicate that the role of carbon credits is shifting due to greenwashing concerns and the rise of science-based targets (SBTi). The authors conclude that developing a robust empirical study to prove causality is inherently challenging due to endogeneity, data limitations in the CDP database, and structural changes in corporate climate strategies.

Carbon Market Watch criticizes the EU's proposed 2040 climate target for relying on international carbon credits and including 'flexibilities' that weaken domestic ambition. The author calls for a strict domestic emissions reduction target, the exclusion of credits from the EU ETS, and the prevention of delays to the ETS2 system for buildings and road transport. The document also warns against using natural disturbances in forestry as a justification to lower overall climate targets.

Carbon Market Watch and Fern call for the rejection of the CRCF Delegated Act for permanent removals, citing four primary flaws in BioCCS and biochar methodologies: insufficient consideration of biomass extraction's climate effects on land, lack of minimum capture rates for BioCCS, the use of zero baselines that ignore regulatory progress, and the failure to evaluate biomass feedstocks by carbon payback times. The authors warn that these deficiencies risk certifying projects that add emissions rather than removing them, potentially compromising the integrity of the EU ETS if these credits are integrated. They further criticize the vague rules and the potential for a 'race to the bottom' among certification bodies and auditors paid by operators.

Carbon Market Watch asserts that the EU's Sustainable Transport Investment Plan (STIP) is insufficient without expanding the EU ETS to cover all aviation and shipping emissions. The organization estimates that covering all flights leaving the EEA would generate an additional €9 billion annually, rising to €58 billion if non-CO2 effects and private aviation are included. While the STIP utilizes the EU Innovation Fund and European Hydrogen Bank for cleaner fuels, the author argues that funding should shift away from biofuels toward e-kerosene and railway infrastructure, such as the Trans European Transport Network (TEN-T), to adhere to the 'polluter pays' principle.

The report argues that temporary CRCF units from carbon farming are currently of low quality due to insufficient management of non-permanence and additionality risks, making them unsuitable for offsetting emissions. It assesses proposed EU agri-food policies—including an Agricultural Emissions Trading System (AgETS) and Mandatory Climate Standards (MCS)—concluding that allowing these units as offsets would undermine environmental integrity. The authors recommend shifting toward activity-based payments, either through a reformed Common Agricultural Policy (CAP) or other public funding mechanisms, to promote carbon farming without the integrity risks associated with result-based crediting.

The letter argues against postponing the ETS2 and opposes changes to the MSR2, specifically the removal of the sunset clause, which the authors claim would increase emissions and jeopardize the Fit for 55 package. It emphasizes the need for robust carbon prices to drive decarbonization investments and calls for the Commission to ensure Member States strengthen national policies to compensate for any reduced effectiveness of a reformed ETS2.

Carbon Market Watch warns that carbon markets are being promoted as a 'cure-all' for the climate crisis, which risks camouflaging climate inaction. The organization asserts that these markets are riddled with systemic flaws, often violate human rights, and cannot replace the scale of climate finance required for developing countries. It calls for COP30 to prioritize rapid, substantial emissions cuts over the use of carbon credits for offsetting.

The document argues for a shift from the 'compensation' model of carbon offsetting to a 'contribution' model known as beyond value chain mitigation (BVCM). It examines several climate impact funds—including 1% for the Planet, Frontier, and Milkywire—finding that while they generally support high-impact climate action and avoid misleading neutrality claims, there is a systemic need for clearer BVCM metrics and more explicit guidance on corporate claims to prevent greenwashing.

The document challenges the narrative that carbon credits drive corporate climate ambition, asserting that existing studies showing a correlation between credit use and decarbonisation suffer from methodological flaws, including sample bias and confounding factors. It highlights risks such as the 'investment effect' and 'target effect,' where credits compete with or substitute for internal abatement. The brief recommends that companies, regulators, and standard setters treat carbon credits only as complementary contributions (Beyond Value Chain Mitigation) and maintain a strict firewall between credit use and internal emission reduction targets.

The report evaluates the IMO Net-Zero Framework (NZF), a hybrid measure combining a GHG Fuel Intensity (GFI) standard with a two-tier carbon pricing system. It concludes that the NZF is likely to result in modest emission reductions of 10-15% by 2030, falling short of the 1.5°C-compatible requirement of a 45% cut. The analysis highlights a weak effective carbon price of approximately USD 10–15/tCO₂eq, which is insufficient to make zero-emission fuels competitive and risks locking in fossil LNG. Revenue generation is projected to be limited (around USD 15 billion annually), significantly lower than a high flat levy scenario. The report also examines the distributional impacts, noting that SIDS and LDCs may not receive sufficient funding, and proposes integration pathways for the EU to maintain its climate ambition while participating in the global scheme.

The document analyzes the IMO's Net-Zero Framework (NZF), which was delayed by one year in October 2025 due to pressure from the US and oil-producing nations. A study by Cincera Consulting finds the NZF is inadequate, projecting emission reductions of only 8-10% by 2030, far below the 45% required by the Paris Agreement. The brief criticizes the NZF's hybrid approach—combining a GHG fuel standard with limited carbon pricing—noting that the effective carbon price of $14/tCO2eq is too low to drive a transition to green fuels. It recommends that the EU expand its Emissions Trading System (ETS) to cover 100% of emissions for voyages entering or leaving the European Economic Area and urges the IMO to adopt a universal levy to address absolute emissions.