CFTC should reinstate carbon market guidance and strengthen oversight, urges CATF
Washington, D.C. – The Commodity Futures Trading Commission (CFTC) has withdrawn its “Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts,” reversing a carefully developed decision intended to strengthen transparency, standardization, and accountability in voluntary carbon markets. In response, Clean Air Task Force has submitted a letter to the CFTC today urging the guidance to be reinstated and calling for robust regulatory oversight of voluntary carbon markets.
“The Commission’s abrupt withdrawal of its carbon market guidance is a step backward for investor protection and market integrity,” said Kathy Fallon, Land Systems Program Director at CATF. “Carbon markets will only grow if investors are confident that they represent real climate mitigation from measurable, additional, and durable emissions reductions or removals. The CFTC guidance provided investors with a baseline expectation of quality in a market where some types of credits have struggled with over-crediting, inconsistent methodologies, and limited transparency. Rolling it back without any public process or justification risks weakening an already fragile market.”
CATF research and prior comments to the CFTC have underscored the persistent challenges facing voluntary carbon markets, including lack of standardization, insufficient transparency, and inadequate safeguards against reversal and fraud. These shortcomings leave investors vulnerable and, without oversight, limit market growth over concerns that credits may overstate or misrepresent their benefits.
Rigorous, transparent guardrails are essential to protect market participants, ensure credible climate outcomes, and prevent voluntary carbon markets from undermining—rather than enabling—progress on emissions reductions. The CFTC should reinstate and strengthen the guidance it withdrew, and CATF also urges Congress to develop and advance bipartisan legislation that establishes durable oversight for carbon markets.
CATF will continue to push for stronger federal oversight to restore market confidence and ensure markets deliver real, verifiable climate benefits.
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About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With more than 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
