SE Asia REDD+ prices rise on supply crunch as new issuances loom large

Persistent supply bottlenecks in Southeast Asia's REDD+ market have left buyers awaiting long-anticipated fresh issuances that could ease prices in the medium term, several traders told Platts, part of S&P Global Energy.

Primarily, the scarcity of credits from Indonesia's Katingan Mentaya, widely considered the region's flagship nature-based avoidance project, has raised prices for all existing projects with a high ratings profile.

About 18.5 million credits spanning vintages 2021-2023 are expected to be issued in coming months, notable proponents of the project told Platts earlier. When delivered, those volumes could help absorb "pent-up demand" in the market, according to market participants.

Platts launched new project-specific price assessments for Southeast Asian nature-based credits March 2, underscoring the pricing divergence across the region's legacy projects.

On March 3, Platts REDD Katingan was assessed at $13/mtCO2e, up 70 cents day over day. Platts IFM Kuamut removal credits were assessed at $33/mtCO2e, down $2/mtCO2e day over day, while avoidance credits were assessed at $17/mtCO2e, down 50 cents. Platts WRC Sumatra Merang was assessed at $21/mtCO2e, stable day over day.

"It is very difficult to find viable alternatives [to Katingan]," a New Zealand-based trader told Platts. "Once the Katingan issuances come to the market, we will see how prices for Kuamut behave ... I expect prices to moderate."

These projects, despite their differing Agriculture, Forestry, and Other Land Use (AFOLU) activities, carry high ratings from third-party rating agencies. Large corporations have increasingly centered their procurement decisions on ratings, a trend that emerged in early 2025, according to market participants.

As the preference for BBB- and above-rated projects has become a key criterion for buyers, traders said the supply crunch has made them anxious. Price-sensitive buyers, however, have emerged as takers of projects with a lower ratings profile.

"Buyers are demanding Southern Cardamom and Mai Ndombe because of their low prices and high Sustainable Development Goals alignment," a Europe-based trader said.

The first trader echoed this view, saying that buyers seeking the most competitively priced REDD+ credits would transact in them.

Platts assessed Keo Seima credits at $5.50/mtCO2e and Southern Cardamom credits at 30 cents/mtCO2e on March 3, both stable day over day. Rimba Raya credits were assessed at $3.25/mtCO2e, up 10 cents from the day before.

High ratings, thin liquidity

Registry data at the end of January showed limited availability even for the relatively liquid 2020 vintage.

"It is tough to source even 2,000-3,000 mt of Sumatra Merang," the Europe-based trader said. "There is hardly any supply to meet the demand."

Malaysia's Kuamut Rainforest Conservation Project stands out as the only project to have issued credits for 2022 and 2023, said a Singapore-based trader. As a result, the credits command a vintage premium, alongside a price uplift driven by limited trading inventory.

"All those Kuamut removals have been procured," the Singapore-based trader said, adding that forward structures may be the only way to access fresh supply.

For Katingan, the New Zealand-based trader said buyers are actively seeking to secure offtake agreements for the upcoming supply, while sellers are "rushing to monetize" their holdings.

In the current scenario, the REDD+ segment is a seller's market, with sellers reluctant to discount prices.

Buyers typically follow a five-year rule, favoring the most recent vintages, but tight supply has scrambled that hierarchy. With few high-rated credits available, buyers sometimes prioritize price over vintage recency.

Older vintages such as 2019 and earlier are widely excluded from internal procurement mandates. "Buyers are okay to pay a premium for high-quality projects, say vintage 2019," the New Zealand-based trader said.

However, for lower-rated projects, that willingness may not be as deep, according to the Europe-based trader.

Price-sensitive demand shifts

Persistently higher prices for legacy projects have sidelined some buyers, with more price-sensitive buyers gravitating toward the most competitively priced credits, including Cambodia's Southern Cardamom REDD+ Project and Indonesia's Rimba Raya Biodiversity Reserve Project.

Southern Cardamom, which aligns with 15 of the 17 UN Sustainable Development Goals, is valued at below $1/mtCO2e for vintage 2020, although some buyers resist higher levels. Credits with vintage 2021 were heard offered above $1/mtCO2e.

"Keo Seima has had lots of complications around land rights," the New Zealand-based trader said. "Similarly, Southern Cardamom had run into human rights issues -- participants in the voluntary market would raise concerns even if the project holds 15 SDGs."

Amid this scenario, some buyers are widening their search. Brazilian REDD+ projects are attracting interest, with traders citing fewer project-specific technical issues than some Southeast Asian peers.

With sellers reluctant to budge and buyers cautious at elevated levels, the market is effectively in a holding pattern and awaiting the next wave of issuances.