CFTC Withdraws Biden-Era Voluntary Carbon Credit Guidance, Impacting Market Regulation

What's Happening?

On September 10, 2025, the Commodities Futures Trading Commission (CFTC) announced the withdrawal of guidance related to the market for voluntary carbon credits. This guidance, initially introduced by the Biden Administration in September 2024, was deemed by the CFTC to provide limited value and to disproportionately focus on a specific class of derivative contracts concerning carbon credits. The CFTC emphasized that a uniform regulatory framework, without specific guidance on carbon credits, would better serve market transparency, expectations, fairness, and integrity. This move aligns with the broader deregulatory agenda of the Trump Administration, which has been actively working to roll back climate change-focused regulations established under the Biden Administration.

Why It's Important?

The withdrawal of the carbon credit guidance by the CFTC is significant as it reflects a shift in regulatory focus under the Trump Administration. This decision could impact the voluntary carbon credit market by reducing regulatory oversight, potentially affecting market participants who rely on these credits for compliance and sustainability goals. The move may also influence the broader climate policy landscape in the U.S., as it signals a continued departure from the climate-focused initiatives of the previous administration. Stakeholders in the carbon credit market, including businesses and environmental groups, may need to adjust their strategies in response to this regulatory change.

What's Next?

The CFTC's decision to withdraw the guidance may lead to further discussions and potential adjustments in the regulatory approach to carbon credits. Market participants and environmental advocates may seek clarity on how the absence of specific guidance will affect market operations and compliance requirements. Additionally, there could be increased advocacy for reinstating or revising the guidance to ensure that the carbon credit market remains robust and effective in supporting climate goals.