Current Landscape

ARR (Afforestation, Reforestation, and Revegetation) has long been a cornerstone of carbon offsetting efforts, focusing on the capture and storage of atmospheric carbon dioxide through natural processes. These projects not only contribute to mitigating climate change but also offer additional benefits, such as enhanced biodiversity, improved soil quality, and increased resilience of ecosystems. cCarbon estimates over 500 developers spread across the globe with concentration in Latin America, Africa and Asia

Issuance & Retirement Trends

Issuance of ARR credits increased particularly between 2019 and 2021, when a number of developers rushed to issue credits taking advantage of the temporary boom in the voluntary carbon market. To date, nearly to 80 million ARR credits have been issued, of which around 60% have already been retired.

Investments

Cumulative ‘reported’ investment in ARR projects has grown rapidly since 2020, surpassing $2 billion by June 2025. Equity has emerged as the dominant source of funding, supported by a growing share of grants and debt. The uptick in capital inflows in 2023 and 2024 is driven by strong participation from institutional investors and private equity firms. Due to predictability of performance of ARR projects, debt is increasingly coming into the mix.

The market has also witnessed growth in offtake deal volumes for ARR credits from 2023 to 2025 driven by technology sector buyers part of the Symbiosis Coalition for nature-based removals with cumulative commitments reaching 34.6 million tonnes.

cCarbon Assessment

ARR represents the largest removal category for the immediate term and mid-term. The reported investments in ARR is an undercount, and cCarbon estimates about US$ 10-12 billion deployed in the sector. Projects are ongoing on estimated 25- 26 million hectares. This translates into 8-9 million reduction credits per year: which represents the current capacity of the market. (There are some projects that have an excess issuance of Af/ reforestation projects compared to land allocated i.e. challenges on MRV).

Cost of newer and future projects is going to increase. cCarbon estimates newer projects to provide credits between US$ 50-90 (including harvesting and depending on geography) by the end of the decade for them to make an economic return.

This is because cost of land acquisition is likely to increase. Land will start to become a constraint as will be colored briefly in this document.

The below scatter plot offers a visual comparison of total investments versus project area, both presented on logarithmic scales. The dashed line highlights the upper boundary of investment intensity across the observed area ranges.