Why CATL and Tencent Are Betting on Carbon Credit Demand as Singapore Rebuilds Trust in the Voluntary Carbon Market

The real problem in the voluntary carbon market: demand is weakening faster than supply can adjust

The voluntary carbon market is not short of supply. It is short of confident demand.

That is the core shift in 2024 and 2025. Transaction volumes fell sharply, while average prices declined much less. That tells you buyers are still there, but they are becoming more selective. They want higher credit quality, stronger auditability, and a clearer case for why a credit can survive scrutiny. In practice, the market is moving toward high-integrity credits and away from broad, undifferentiated buying.

This matters because the old assumption no longer holds. More supply does not automatically mean more liquidity. If buyers doubt additionality, permanence, leakage control, or double-counting safeguards, they wait. That creates a pricing floor for better credits and a weaker market for legacy inventory.

The supply side is also fragmenting. ICVCM approval of methodologies and programs is expanding the pool of eligible credits, but not evenly. That creates a split between credits that can credibly meet higher integrity expectations and those that cannot. For buyers and intermediaries, the real question is no longer just price. It is whether a project is still bankable from a reputational and accounting perspective.

VCMI adds another layer. It makes clear that carbon credits are complementary to internal emissions reductions, not a substitute for them. That is good for market integrity, but it also raises the bar for procurement policy and claims governance. Buyers now need to explain not only what they bought, but why the purchase fits their decarbonization strategy.

That is where large corporate buyers matter. They can pre-commit, standardize due diligence, and absorb reputational risk in a way smaller buyers usually cannot. In a weak market, that kind of firm demand is more valuable than opportunistic spot buying.

Why CATL and Tencent matter: what corporate giants can do that smaller buyers cannot

CATL and Tencent matter because they can create predictable demand, not just headlines.

Both are useful examples of how large companies can shape the voluntary carbon market from the demand side. CATL says it reached carbon neutrality in core operations in 2025 and is aiming for zero-carbon leadership. Tencent says it is targeting carbon neutrality in operations and supply chain by 2030 and uses offsets as a residual complement. That combination of scale and climate ambition is exactly what can support a more durable market.

The key point is not branding. It is procurement power. Large buyers can sign multi-year offtake agreements, specify vintages, and require traceability at project level. That reduces inventory risk for developers and makes demand more bankable. It also helps create demand aggregation, which is often what the market lacks when sentiment weakens.

CATL is especially important because its industrial scale turns carbon management into a supply-chain issue, not just a compliance exercise. With large revenue and battery sales volumes, it has leverage over suppliers and project developers alike. That kind of buyer can influence what kinds of credits get financed, developed, and eventually traded.

Tencent shows a different kind of sophistication. Its approach combines reductions, green electricity, and only limited offsets. That tends to push demand toward credits with a stronger integrity narrative, not just the cheapest available volume. Buyers like that raise the market standard because they ask harder questions about removal versus avoidance, nature-based versus tech-based credits, and the level of assurance behind each project.

That is the real effect of corporate giants. They can force the market to answer questions smaller buyers often cannot ask with enough force. And because the market is still fragile, those questions matter.

Singapore is trying to amplify that effect. It is building an architecture of trust and infrastructure that can turn isolated purchases into a broader demand signal.

Singapore’s parallel strategy: high-integrity coalitions and trading infrastructure as demand anchors

Singapore is not trying to be just another trading venue. It is trying to become a hub for high-integrity carbon markets.

In 2025, it co-launched the Coalition to Grow Carbon Markets with Kenya and the UK. The goal is to strengthen voluntary demand and publish shared principles by COP30. That is important because it links demand-side credibility with policy clarity. Buyers need to know what counts as legitimate use of carbon credits, especially when claims are under more scrutiny.

Singapore then added more structure. In October 2025, it announced guidance on the voluntary carbon market and a buyers’ coalition aimed at channeling demand toward high-integrity credits. It also introduced support for financial market participants. That combination matters because market trust is not only about principles. It is also about the plumbing that makes deals easier to execute.

The infrastructure layer is already visible. The Singapore Carbon Market Alliance, launched with EDB and IETA, was designed to connect buyers and sellers. The Climate Action Data Trust was introduced to improve metadata and transparency. These are not cosmetic additions. They reduce friction in due diligence, registry checks, and transaction execution.

The Integrity Council’s Asia Pacific Hub in Singapore reinforces the same direction. It brings standard-setters, finance, brokers, and corporate buyers closer together. That can help convert trust into liquidity, which is exactly what the market needs if it wants more than sporadic buying.

For buyers, the strategic point is simple. Coalitions and guidance can reduce ambiguity. They can also make procurement easier to defend internally. If Singapore succeeds, it will not just host trades. It will shape what credible demand looks like.

What this means for carbon credit pricing, buyer confidence, and market liquidity across APAC

The biggest signal to watch is the gap between volume and value.

When turnover falls but prices do not collapse in the same way, the market is telling you that quality still commands a premium. That is especially true for high-integrity credits. In a more selective market, buyers are willing to pay more for credits they can defend in audit, disclosure, and reputation terms.

That also means price dispersion is likely to widen. CCP-eligible credits, removals, high-assurance nature-based credits, and legacy avoidance credits are not interchangeable. Buyers and intermediaries will need segment-specific benchmarks, not a single generic carbon credit price.

Capital flows point in the same direction. MSCI says committed and deployed capital in the global carbon credit market reached 22 billion dollars in 2025, up 72% from 2024. That suggests the market is preparing future supply before liquidity fully returns. In other words, the money is moving ahead of the secondary market.

For APAC buyers, that likely means more forward contracts, more pre-financing, and more portfolio-style procurement. Spot buying will still exist, but it will matter less than structured buying. That favors buyers and intermediaries with strong origination, legal structuring, and registry management capabilities.

Buyer confidence will improve only if claims rules stay aligned with procurement behavior. ICVCM and VCMI are pushing the market toward a model where credits are used alongside abatement targets, not instead of them. That is good for integrity, but it also means buyers need clearer governance, tracking, and disclosure.

The practical result is a market that may be smaller in turnover but stronger in discipline. If that happens, pricing will reflect quality more clearly, and liquidity will concentrate where trust is highest.

The next test for the market: can corporate procurement and integrity rules revive long-term demand?

The next test is whether corporate procurement teams build durable buying policies.

That means more than setting a net zero target. It means defining quality thresholds, using an internal carbon price, setting a residual emissions strategy, and doing proper due diligence on project developers. Without those pieces, demand stays tactical. With them, it becomes recurring.

ICVCM and VCMI are helping create the reputational and procedural framework for that shift. They make it easier for CFOs, auditors, and stakeholders to see why a purchase is defensible. That matters because the future of the market will depend less on raw supply and more on whether buyers trust the supply they are seeing.

The strongest model for industrial and technology buyers is still the hybrid one. Reduce operations first. Buy renewable power. Cut supply-chain emissions. Use carbon credits only for residual emissions. CATL and Tencent are relevant because they fit that pattern. They are not presenting credits as a substitute for decarbonization. They are treating them as the last layer.

Singapore’s role is to turn that logic into market structure. If its coalitions, guidance, and infrastructure can generate real deal flow, then it can become a trust node for the region and beyond. If not, the market will keep relying on a small number of sophisticated buyers while the rest remains fragmented.

That is the real choice. The voluntary carbon market will not be revived by more supply alone. It will be revived by better demand architecture.

If that architecture takes hold, the best credits will attract deeper pools of capital and more predictable buyers. If it does not, liquidity will stay narrow, and the market will keep rewarding only the most sophisticated participants.