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For some time now, the Voluntary Carbon Market (VCM) and the compliance market have been operating side by side. However, many experts are now starting to see opportunities where the Voluntary Carbon Market and the compliance market can converge, so organizations can more easily decarbonize with high-integrity carbon credits. It’s even possible that we will one day see the VCM play a role in government-sanctioned decarbonization activities or even become the basis of the compliance markets.

Many project developers have been playing the VCM game, but entering the compliance market requires a bit more concentrated intention. There are different rules and regulations to abide by that are often subject to change.

However, the project developers who have been exploring the compliance markets are seeing more demand coming through, almost to a surprising degree. (This might be because in some compliance markets, there’s a lot more demand than supply.)

That’s why project developers should explore the opportunity to enter the compliance market, strengthen their go-to-market motion, and widen their impact. Not only would they increase their buyer pool, but they would also benefit from more predictable demand as organizations would continuously need specific offsets to meet the increasingly stringent emissions regulations.

To make it easier to break into these markets, we’ve compiled all the information you need to know about each compliance market. We will cover the following compliance markets:

• Australia Safeguard Mechanism
• California Cap & Trade
• Chile Carbon Tax
• Colombia Carbon Tax
• Regional Greenhouse Gas Initiative (RGGI)
• South Africa Carbon Tax
• South Korea ETS
• Mexico Querétaro Carbon Tax
• Airport Accreditation Scheme
• Washington State Cap & Invest
• Singapore Carbon Tax
• Taiwan Carbon Levy

What is the difference between the Voluntary Carbon Market and compliance markets?

Before we get into the nuances of each carbon market, let’s get clear on the difference between the voluntary carbon market and the compliance markets.

The Voluntary Carbon Market (or VCM) is exactly what it sounds like — voluntary. Businesses can turn to it in order to offset or remove carbon emissions in line with their climate goals or pledges. Whether they’re trying to achieve net zero or just trying to make whatever impact they can, the VCM is there for them.

Meanwhile, compliance markets are systems that run across regions to keep their organizations’ emissions in check. If they don’t keep their emissions under a certain threshold, they face penalties like a tax for every ton emitted over the threshold.

Participants in the VCM do not face penalties for their emissions.

There are also more rules and regulations in the compliance carbon markets as to which and how many carbon credits they can use to count to offset their emissions. 

How VCM projects can integrate into the 13 compliance markets

There are 13 compliance markets, and each allows for a varying degree of VCM project integration. Keep reading to find out more about them and whether your carbon credits could be eligible for use within them.

Australia Safeguard Mechanism

Approximate price per ton: $23

Eligible registries: N/A

Project location: Australia

Project sectors: Vegetation management, regenerative agriculture, forestry, energy consumption, waste, transport, industrial processes

Buyer organization profiles: Electricity, generation, oil and gas, mining, manufacturing, transport, waste

Minimum vintage:  N/A

The Australia Safeguard Mechanism was launched in 2016 to help the country reach net-zero by 2050. It ensures that some of the major organizations, like those in the electricity and manufacturing sectors, keep their scope 1 emissions in check.

These eligible carbon credits are referred to as Australian Carbon Credit Units, or ACCUs. 

In this market, buyers are particularly interested in co-benefits that help boost biodiversity, prop up Indigenous employment, and/or are indigenous-owned themselves.

They are looking for more high-integrity projects that meet stringent standards as organizations work to be in compliance with these markets. This market is also considering the eligibility of international offsets upon their 2026-2027 review.

They also need to follow an approved method. Many of these methods aren’t tied to a registry and require project developers to apply to the Clean Energy Regulator.

Learn about the ACCU-approved methodologies as of 2025 here.

California Cap & Trade

Average price per ton: $30.53

Eligible registries: American Carbon Registry or Climate Action Reserve

Project location: Preference for local California-based projects

Project sectors: Ozone Depleting Substances, Livestock Projects, Urban Forest Projects, U.S. Forest Projects, Mine Methane Capture Projects, and Rice Cultivation Projects

Buyer organization profiles: Electricity generation & large oil and gas production facilities

Minimum vintage: 2003

California Cap & Trade was established in 2006, making it one of the first carbon compliance markets to be established.

There are currently 400 entities that are operating under these compliance conditions that might want to utilize offsets.

There’s a strong focus on making sure offsets used within this market make a tangible difference in California. No more than 50% of a company’s offsets are allowed to not demonstrate any direct environmental benefit to California.

Chile Carbon Tax

Approximate price per ton: $5

Eligible registries: Verra, Gold Standard, Clean Development Mechanism, Biocarbon, CerCarbono

Project location: Has to be domestic to Chile

Project sectors: Renewable energy/waste disposal

Buyer organization profiles: Organizations emitting over 25,000 tonnes of CO2e

Minimum vintage: 2020

The Chile Carbon Tax was introduced in 2017.

In order for emissions to be offset, organizations have to lean on projects that are reducing emissions of the same pollutant they’re releasing. 

There are also stringent restrictions for these project types. Only renewable energy or waste disposal projects domestic to Chile, with a minimum vintage of 2020, are eligible to be used as offsets under this schema.

Currently, there’s more demand than there is supply for this project. This makes it a great opportunity for project developers who meet this criterion to explore this market.

Colombia Carbon Tax

Approximate price per ton: Not publicly available 

Eligible registries: CDM, VCS, CERCEARBONO, ProClima, CSA

Project location: Generated in Colombia only

Project sectors: Not specified

Buyer organization profiles: Passenger/cargo transportation companies, hydrocarbon refining/petrochemical organizations, and any other organization that utilizes taxed fuel

Minimum vintage: Vintage that is at a max five years from when the emissions were generated

The Colombian Carbon Tax was implemented in 2017.

Colombia aims to be carbon neutral by 2050, and has set rigid guidelines for organizations to follow in order to ensure their collective movement towards this goal. They’ve set a tax that could be anywhere from $4.60 to $5.80 for each ton of carbon emitted over the limit.

Organizations in hard-to-abate sectors can use eligible carbon credits to cover up to 50% of their emissions.

There are currently 212 Colombian projects, mainly in the AR, energy, and REDD+ sectors.

Regional Greenhouse Gas Initiative (RGGI)

Approximate price per ton: $15

Eligible registries: N/A

Project location: Must be located within one of the states associated with the RGGI: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, Virginia 

Project sectors: Landfill methane capture, Sulfur hexafluoride, Forestry or afforestation, End-use efficiency, Avoided agricultural methane

Buyer organization profiles: Power plants

Minimum vintage: 2006

Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia formed the Regional Greenhouse Gas Initiative to reduce CO2 emissions from their power plants. Together, they have established a regional cap on their carbon dioxide emissions.

These states can use offsets to meet up to 3.3% of their compliance obligations.

Note: Massachusetts, New Hampshire, and Rhode Island don’t issue CO2 offset allowances themselves, but regulated power plants in these states can trade offset allowances with other states in the RGGI initiative. 

Some states also have different regulations on which projects are eligible. For example, afforestation is not an eligible project for New York offsets.

South Africa Carbon Tax

Approximate price per ton:  Not publicly available

Eligible registries: CDM, VCS, Gold Standard

Project location: Republic of South Africa

Project sectors: Chemical processes, Energy efficiency, Household devices, Renewable energy, and waste disposal

Buyer organization profiles: Any organization utilizing fossil fuels, emissions from mining, or industrial processes

Minimum vintage: 2019

The South African Carbon Tax was established in 2019.

Right now, emitters can offset up to 5% or 10% of their taxable emissions using carbon credits, and starting in 2026, they can offset 10% for fugitive and process emissions and up to 15% for combustion emissions.

They’ve called out a lack of Afforestation, Reforestation, and Revegetation (ARR) credit supply, so if you’re a project developer that falls into those categories, it might be worth considering entering this market.

Keep in mind, project developers must secure an Extended Letter of Approval (ELoA) for their project to be eligible.

South Korea ETS

Approximate price per ton:  $6.37 

Eligible registries: Not applicable, only International CDM credits and KOC credits are eligible

Project location: Domestic and International 

Project sectors: Chemical Processes/Industrial Manufacturing, Household Devices, Renewable Energy, Waste Disposal

Buyer organization profiles: Maritime, Waste, Domestic, Aviation, Transport, Buildings, Industry, Power

Minimum vintage: 2016

South Korea set up its emission trading scheme in 2015.

International project developers can submit their carbon credits as a KOC (Korean Offset Credit), where the Korean government will then analyze and approve them. Once the government approves it, it turns into a KCU (Korean Credit Unit) that organizations can utilize to offset their emissions.

We are currently in Phase 3 of this scheme, and they’re looking to have 37.5M international credits to put towards their 2030 NDC, a stark rise from .65M credits used in their 2022 compliance period. 

This need for offsets could be a signal for more project developers to get involved and help these organisations, which are industries that are tough to decarbonize quickly on their own.

Mexico Querétaro Carbon Tax

Approximate price per ton:  $32

Eligible registries: Climate Action Reserve, Verra, Gold Standard, CDM, BioCarbon Registry, CERCARBONO

Project location: Generated in Mexico

Project sectors: photovoltaic solar energy, energy efficiency, waste management, sustainable livestock, and forestry projects.

Buyer organization profiles: Mining, industry, and power

Minimum vintage: 2020

The Mexico Querétaro Carbon Tax was established in 2020.

Organizations can meet up to 10% of their emissions with offsets under this carbon tax.

This is one of the highest carbon taxes in Latin America, and so many organizations will likely be looking to purchase carbon offsets to avoid high fees. It also makes it easier on project developers that there are quite a handful of eligible registries.

Airport Accreditation Scheme

Approximate price per ton: Not publicly available

Eligible registries: Clean Development Mechanism, Verified Carbon Standard, Gold Standard, Climate Action Reserve, American Carbon Registry, Plan Vivo, Puro Earth, UK Woodland Carbon Code (UK-based airports only), Label Bas Carbone (French airports)

Project location: N/A

Project sectors: Industry efficiency, Transport, large-scale conventional renewables, forestry & land-use, efficient lighting, biogas, methane from landfill, small solar, small hydro, geothermal, biomass, and cookstoves

Buyer organization profiles: Airports

Minimum vintage: Issued 5 years prior to the occurrence of the emissions

The Airport Accreditation Scheme is a voluntary carbon management program for airports.

To receive the highest level within this standard for carbon management in the airport industry, airports must engage in Scope 1, 2, and 3 in carbon removals, and subsequent levels require carbon offsets.

They’re especially looking for projects with co-benefits that are certified by standards like the Climate, Community & Biodiversity Standards (CCBS) and Social Carbon (SC).

Projects that are not eligible:

• Nuclear energy
• Fuel switching 
• Industrial gases (HFC & N2O)
• Coal mine methane

Washington State Cap & Invest

Average price per ton: $48.76

Eligible registries: Climate Action Reserve, American Carbon Registry 

Project location: Must benefit the state of Washington if not located in Washington

Project sectors: Livestock, ozone-depleting substances, US forests, and Urban Forestry

Buyer organization profiles: Mining, Energy, Industrial, Building, and Transportation

Minimum vintage: 2023

The Washington State Cap & Invest Market began in January 2023, and it aims to eventually reduce statewide emissions to 95% below 1990 levels by 2050. Companies can use offsets to account for 3%-5% of their emissions.

What’s key for any project developer interested in entering this market is that their projects must explicitly provide environmental benefits to the state of Washington.

There is potential linkage with California and Quebec markets is being discussed, so there is also potential for a project developer who qualifies to participate in this market to further their reach.

Singapore Carbon Tax

Average price per ton: $18

Eligible registries: Gold Standard, Verra, ACR, Global Carbon Council

Project location: Latin America, Asia, Africa, Oceania

Project sectors: All

Buyer organization profiles: Manufacturing, power, water supply, waste management 

Minimum vintage: 2021

Organizations can use what they call high-quality international carbon credits (or ICC) to offset up to 5% of their emissions.

Currently, there is a limited amount of available credits. The government of Singapore itself said, “The availability of ICCs will require active participation from the private sector, and the Singapore Government will continue supporting these efforts as more IAs are signed,” so this is a market to watch. 

Note that for projects that are listed under a VCS methodology, they’d like to see a verification report following CCB or SD VISta standards to highlight their co-benefits, and some methodologies across registries are excluded altogether.

Taiwan Carbon Levy

Average price per ton: $12

Eligible registries: N/A

Project location: Not publicly available

Project sectors: Biochar, carbon capture, forestry, and land use

Buyer organization profiles: Businesses with high carbon emissions

Minimum vintage:  2020

The Taiwan Carbon Levy was introduced in 2023.

In this compliance market, organizations can offset up to 10% of their emissions with domestic projects and facilities in sectors at low risk of carbon leakage can offset up to 5% of their emissions with international projects.

They’re looking to transition to an ETS in 2026.

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