Edition #15 | Your Sustainability Team’s Weekly Briefing
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Estimated reading time: 7 minutes
Carbon Removal Finance · Aviation Compliance Markets · Supply Chain Accounting
Welcome to your weekly sustainability briefing. This week, we’re covering three developments that show carbon markets maturing under real financial and regulatory pressure: the EU proposed becoming the largest buyer of carbon removal credits in history, committing roughly €50 billion between 2031 and 2040 to build a compliance-backed floor under durable removal technologies like direct air capture. Aviation’s offsetting scheme hit a supply wall, with airlines needing up to 236 million eligible credits against a pool of just 32 million, forcing regulators to relax quality standards under pressure and exposing how far policy ambition can outpace market-readiness. And a new Verra standard gave carbon insetting something it’s lacked for years: a way to register and verify supply chain emissions reductions as real, auditable claims, closing a credibility gap that’s kept insetting a nice-to-have rather than a reportable strategy.
Story #1: EU’s €50 Billion Carbon Removal Investment
Here’s what it means for prices and supply.
On July 17, 2026, the European Commission published its long-awaited EU ETS Phase 5 reform, and buried inside it is the largest carbon removal purchase commitment in history. The Commission intends to purchase 250 million tonnes of CDR between 2031 and 2040, reaching 48 million tonnes per year by 2040, at an estimated cost of around €50 billion over the period. The mechanism works by adding 250 million allowances to the EU ETS over 2031–40, auctioning them off, and using the proceeds to buy EU-based carbon dioxide removals, certified BECCS and DACCS, with international Article 6 credits allowed a capped role from 2036.
| Business Impact The EU just told the market it will be the biggest buyer of carbon removal credits in history, €50 billion worth, no company has ever committed anything close to this. That's a big deal for business because demand has always been the missing piece in carbon removal. Technologies like direct air capture are expensive and hard to finance precisely because buyers haven't shown up in scale. This proposal is the EU acting as that guaranteed customer, which makes it much easier for removal projects to get built and financed. For companies buying carbon credits voluntarily today, this shows government demand at this scale will likely push prices up and tighten supply over the next decade. Locking in removal credits or supplier relationships now, while the compliance market is not yet live, could be cheaper than waiting. For companies in industries like paper, energy, or heavy manufacturing that could host these projects, it's a funding opportunity, this money is earmarked to buy from EU-based projects specifically, so European industrial sites are well positioned to benefit. Actionable Steps - Reassess long-term VCM/removals procurement strategy: this proposal signals where compliance-grade removals pricing and availability are heading. - If your organization is upstream in industries like pulp/paper, chemicals, or energy-intensive manufacturing with BECCS/DACCS potential, start scoping bankable offtake structures. - Watch the legislative timeline closely; parliament and council negotiations through 2027 will determine the final scope and volumes. |
Story #2: CORSIA's Supply Problem
Airlines need up to 236 million offset credits. Only 32 million exist.
CORSIA requires airlines to offset international flight emissions above baseline, and the numbers show that demand is far outpacing supply. IATA forecasts airlines will need between 146 and 236 million eligible emissions units for Phase 1, but as of early 2026, only 32 million tonnes were actually available and authorized for use. The holdup is procedural, not a lack of good projects; credits need a host-country Letter of Authorization to count, and that approval process has been slow to scale. The EU has also just relaxed its extra quality requirements for Phase 1 specifically to help ease the shortage, giving buyers a wider, still-credible pool to purchase from right now before stricter rules return in Phase 2.
Business Impact This is a rare window where acting early pays off directly. With such a narrow supply of eligible credits and a hard January 2028 deadline to retire them, prices are widely expected to climb as more airlines compete for the same limited pool, some analysts project costs could roughly double or more by 2027. Airlines and corporate travel buyers who secure credits now, while eligibility rules are more flexible and before the compliance deadline creates a scramble, stand to lock in meaningfully better pricing and better project selection than those who wait. Actionable Steps - If your organization has aviation exposure (direct or via travel), model CORSIA pass-through costs into 2027–2028 budgets now, the January 2028 retirement deadline means procurement decisions can't wait for price certainty. - Not every credit that looks CORSIA-eligible actually qualifies, exclusions vary by project type, vintage, and methodology. Verify at the credit level, not just the registry level, so you're not stuck holding units you can't actually use when compliance tightens in 2028. |
Story #3:The Standard Insetting Was Missing
Companies can now register supply chain carbon reductions as real, auditable claims
Insetting means investing directly in emissions reductions within your own supply chain. It targets Scope 3 emissions directly within existing operations, and the concept is finally getting real accounting infrastructure behind it; Verra launched an initiative to develop a Scope 3 Standard (S3S), with version 1.0 anticipated to launch in 2026, enabling validation and registration of value-chain interventions and issuance of Intervention Units on the Verra Registry. A separate AIM Platform standard is also targeting completion in early 2026, demonstrating that insetting is moving from a loosely defined corporate practice to one with formal MRV and claims frameworks for the first time.
| Business Impact Insetting has always had a legitimacy problem: without standardized accounting when companies said "we invested in our supply chain" it was hard to verify or compare. The Verra S3S launch changes that calculation, as it gives companies a path to make Scope 3 reduction claims that can actually be registered and audited, which matters enormously given Scope 3 emissions typically represent 70–80% of a company's total carbon footprint. For food, beverage, agriculture, and consumer goods companies specifically, this reassures credibility of the work done to reduce emissions and becomes a reportable climate strategy. Actionable Steps - If Scope 3 is your largest emissions category, start mapping which suppliers or value-chain nodes are viable insetting candidates before the S3S standard formalizes. - Track Verra S3S v1.0 and the AIM Platform standard through 2026; whichever gains traction will likely become the reference framework buyers and auditors expect. - Don't position insetting as an offsetting replacement, pair it with existing credit strategies and be explicit about which Scope reductions come from which mechanism. |
BetterExplained: Insetting
Insetting works similarly to offsetting, but instead of buying credits from an unrelated project, a company invests directly in reducing emissions within its own supply chain, closer to where its operations actually are: a coffee company funding regenerative agriculture on the farms it actually sources from, or a manufacturer paying for energy efficiency upgrades at its own suppliers' facilities. The emissions reduction happens inside the value chain the company is already part of.
This matters because most companies' biggest emissions category isn't their own operations, it's Scope 3, the emissions tied to everything upstream and downstream of them, from raw materials to how customers use their products. Scope 3 typically makes up 70–80% of a company's total footprint. Offsetting was never designed to touch that category directly; insetting is.
The catch has always been how to prove this investment, because insetting happens inside a company's own operations rather than through an independent registered project, there hasn't been a consistent way to verify or compare these investments, which is exactly what's changing this year, as new standards start giving insetting the same kind of auditable structure that offsetting has had for years.
The developments in this edition reflect a market that is moving fast, and rewarding the businesses that move with it. If any of this week's stories raised questions about your organization's climate strategy, carbon commitments, or regulatory exposure, CarbonBetter is here to help you work through them. Get in touch with our team and let's talk about where you stand. And if you found this briefing useful, subscribe to our weekly newsletter with the same analysis, business impact guidance, and the sustainability insights your team needs to stay ahead, directly into your inbox.