Carbon Without Buyers: How Russia Can Build Demand for Verified Units

A market can have credible assets, a functioning registry and growing supply yet still fail to produce meaningful trade. That is the problem confronting Russia's carbon-credit system in 2026. Climate projects are creating verified units, but buyers remain scarce, transactions are thin and most demand still depends on one regional experiment. The result is not merely an environmental-policy puzzle. It is a business-design problem involving product quality, regulation, procurement, investment and access to international markets.

Kommersant reported on August 26, 2026 that 127 climate projects had been registered by August 1, with potential issuance above 109 million carbon units. Some 37.6 million units were already in circulation, while cumulative transactions since 2022 exceeded only 286,000 units. Deals in January through July 2026 covered 74,100 units, down from 126,900 in the same period of 2025. Those figures describe abundant inventory without matching liquidity.

The evidence from Russia offers a wider lesson. A carbon certificate does not become a useful commercial instrument simply because it has been issued. Demand appears when a buyer has a clear obligation or economic reason to acquire it, trusts its integrity, can account for it consistently and expects other parties to recognize the claim. Building those conditions is the real work of market formation.

The headline imbalance is larger than the annual decline

The fall from 126,900 units to 74,100 is important, but the stock-to-flow relationship is more revealing. Tens of millions of units are circulating, and registered projects could eventually issue more than 109 million, yet cumulative trading remains measured in hundreds of thousands. Even allowing for units held for future use, retired directly by project owners or awaiting a suitable buyer, the distance between potential supply and observed exchange is enormous.

Thin turnover creates a circular problem. Buyers hesitate because prices and quality differences are hard to discover in an illiquid market. Developers hesitate to invest in expensive additional projects because expected revenue is uncertain. Intermediaries cannot justify deep research or market-making capacity without regular transactions. Every participant waits for evidence that other participants will arrive, so a technically operational system can remain commercially shallow.

Management teams should therefore resist treating issuance volume as proof of success. A project pipeline measures production capability. A market requires repeated willingness to pay. The distinction matters for capital allocation because a climate project may deliver valuable energy savings or operational improvements even if credit revenue is weak, while a project justified mainly by certificate sales carries much greater demand risk.

Sakhalin shows both the power and limit of mandatory demand

The source identifies the Sakhalin experiment as the key demand driver. It also reports that demand from its participants fell from 124,700 units in 2025 to 68,100 in 2026. The number of companies exceeding quotas declined from twelve to four in 2025, and the volume above quota more than halved. Better compliance can be an environmental success, but it simultaneously reduces the need to purchase units under the existing design.

This is a useful reminder that compliance demand is endogenous. If companies modernize equipment, change fuel, reduce output or improve measurement, their purchasing requirement changes. A market designed around a small set of regulated buyers can contract precisely because the regulation influences behavior. Liquidity cannot safely depend on a permanent assumption that the same companies will repeatedly miss the same limits.

The experiment still provides valuable infrastructure: reporting routines, verification experience, registry records and practical knowledge about settlement. Its next contribution should be evidence about how buyers behave under different prices and obligations. Policy makers and businesses can study which reductions came from investment, which came from operations and which reflected production conditions. That evidence is more useful than celebrating transaction counts alone.

A carbon unit is a claim before it is a commodity

A verified unit represents a measured reduction or removal of greenhouse-gas emissions. Commercially, however, it is also a claim about a counterfactual world: emissions would have been higher without the project. Buyers must trust the baseline, measurement, additionality, permanence and absence of double counting. If any element is uncertain, two units with the same nominal weight may carry very different reputational and regulatory value.

Standard commodities become liquid when products are sufficiently interchangeable. Carbon markets face the opposite pressure. Buyers increasingly want to know the project type, location, methodology, monitoring period, social effects and risk of reversal. Greater transparency improves integrity but also creates segmentation. The market needs enough standardization for comparison without hiding material differences that affect the credibility of a climate claim.

That is why quality assurance is not administrative overhead. It is product engineering. Developers should design data collection, controls and audit trails at the start rather than reconstruct evidence before issuance. Buyers should specify acceptable methodologies and use cases before tendering. Registries should make status, ownership and retirement visible. Each step reduces the uncertainty discount embedded in a thin market.

Regulation can create demand, but poor rules can freeze it

Kommersant notes that approved methodologies become mandatory for climate projects from September 1. Kept partner Vladimir Lukin argued that regulation could move demand out of stagnation if it supports industrial modernization and energy efficiency through carbon-market tools. The condition is crucial. Rules work best when they connect certificates to real investment decisions rather than creating documentation detached from operating economics.

Predictability matters as much as strictness. A factory considering a multiyear efficiency project needs to understand which methodology will apply, how long recognition will last and whether future buyers can use the resulting units. Frequent redesign raises the cost of capital because investors cannot estimate revenue or compliance value. Conversely, rules that never respond to weak evidence can preserve low-quality supply and undermine every participant.

A durable framework therefore needs scheduled review, transition periods and public reasoning. Methodologies can tighten as measurement improves, but projects that followed valid rules need a clear treatment. Buyers also need protection against claims becoming unusable without warning. Regulatory credibility is created when change is transparent, proportionate and linked to demonstrated integrity problems.

Product footprints could broaden the buyer base

The report discussed by Kommersant identifies compensation of a product's residual carbon footprint as a promising long-term source of demand. The sequence matters: companies first reduce emissions through technology and process changes, then use units for the remainder that cannot yet be eliminated economically. Credits used as a substitute for every internal improvement invite criticism; credits used after measurable reduction can support a more defensible claim.

Product-level demand also changes who makes the purchasing decision. Instead of a sustainability department buying units for a broad corporate statement, procurement, product management, export sales and finance must agree on boundaries and evidence. The buyer may want units connected to the year, geography or supply chain of the product. That creates more demanding specifications but also links climate expenditure to revenue and market access.

For suppliers, the opportunity is not simply to sell more certificates. It is to make units usable in customer documentation. Consistent data formats, clear retirement records, assurance statements and understandable project narratives reduce transaction work. A unit that can travel through a buyer's audit, customer questionnaire and export file is more valuable than one that exists only as an entry in a registry.

International recognition is an option, not a shortcut

The source points to international mechanisms as a possible source of larger demand. It cites a forecast of 500 million tonnes of demand under the aviation program CORSIA by 20302035 at prices of $20100 per unit, as well as more than one billion tonnes across national emissions-trading systems such as those of the European Union and China. These are indicators of scale, not guaranteed addressable demand for Russian projects.

Access depends on eligibility, methodology, political recognition, settlement, sanctions exposure and buyer policy. A large global market can remain inaccessible to a specific unit. Companies should model several routes rather than place one heroic export assumption at the center of project finance. Domestic compliance, voluntary product claims and approved international uses need separate probability, price and timing cases.

Russia applied in March for accreditation through the International Civil Aviation Organization so that Russian units could potentially be used against emissions from international flights, according to the Economy Ministry cited by Kommersant. Approval would create an important channel, but preparation should focus on quality and traceability now. Recognition usually rewards systems that are already auditable; it cannot compensate for weak project evidence.

Voluntary demand must survive a skeptical customer

The first retail transactions for individuals appeared in 2026, but the source puts their total volume at only 220 units. The small number is not surprising. Individuals rarely have a standardized reason to buy, and the benefit is intangible unless the certificate supports a specific action such as a journey, event or household footprint. Convenience alone cannot solve the question of credibility.

Corporate voluntary demand faces a similar test at larger scale. A marketing claim can create value only if customers, employees, investors and regulators regard it as honest. Vague language such as carbon neutral can expose a company when boundaries, reductions and retirements are unclear. More modest statements describing what was measured, what was reduced and which residual amount was compensated are easier to defend.

Sellers should therefore avoid promising reputational immunity. They can provide evidence, transparent limitations and retirement infrastructure. Buyers remain responsible for the claim they communicate. The strongest voluntary market will be built by repeat purchasers who integrate units into a measured transition plan, not by one-off campaigns seeking a green label.

Price discovery requires more than an exchange screen

An electronic venue can display bids and offers, but it cannot make heterogeneous units interchangeable or create a reason to trade. Price discovery improves when market participants can compare project attributes, delivery dates, retirement conditions and legal eligibility. Standard contract templates and independent ratings may reduce negotiation costs, provided they do not compress every quality difference into one misleading score.

Regular auctions could reveal demand at defined quality tiers. Long-term offtake agreements could finance projects while giving buyers price certainty. Market makers might support day-to-day liquidity once transaction volume justifies inventory risk. Each instrument solves a different problem. A policy that demands immediate spot-market liquidity from a young, segmented asset class may produce visible quotes without reliable depth.

Companies should track bid-ask spreads, time to execution, traded volume by methodology and concentration among buyers. An average price without these measures can conceal a market where one bilateral deal sets a reference that few others could achieve. Finance committees need liquidity-adjusted revenue assumptions, especially when certificates are expected to repay physical investment.

Project economics should work before optimistic credit revenue

The safest climate projects reduce energy cost, prevent waste, improve yields or modernize equipment even if certificate prices disappoint. Credit revenue can then improve the return rather than create it. Projects based primarily on units may still be valid, particularly removals that lack another revenue stream, but they require stronger contracts and larger risk allowances.

A disciplined investment case separates operating savings, avoided compliance cost, certificate sales and strategic option value. Each component receives its own evidence and probability. Management can see whether the project remains attractive at zero credit revenue, at a conservative domestic price and under an international-access scenario. This prevents attractive headline forecasts from hiding a fragile base case.

Capital should also be staged. Early funding establishes methodology eligibility, baseline data and buyer interest. Construction or full deployment follows only after critical uncertainties are reduced. Stage gates are not hostility toward climate investment; they protect scarce capital and help credible projects distinguish themselves from speculative inventory creation.

Buyers need a procurement standard

Many organizations approach carbon units as an unfamiliar specialist purchase. That encourages either excessive caution or dependence on a seller's explanation. A cross-functional standard gives procurement a repeatable process. Sustainability experts define environmental integrity, legal teams review claims, finance verifies ownership and price, and business units state the purpose for which units will be retired.

Eight questions before purchasing units

1. What exact emission boundary and period does the intended claim cover?
2. What internal reductions occurred before compensation was considered?
3. Which methodology created the unit, and is it eligible for the intended use?
4. How were the baseline, additionality and monitoring evidence independently checked?
5. Could the benefit be reversed, duplicated or claimed by another party?
6. How will title move, and where will retirement become publicly visible?
7. What price premium reflects quality rather than sales presentation?
8. Who approves the final public wording and retains the supporting record?

The answers should be stored with the commercial contract. That archive allows future teams to understand why a unit was accepted and prevents marketing language from drifting beyond the evidence. It also creates useful feedback for developers: recurring buyer objections identify where project design or registry disclosure needs improvement.

Developers must start with a buyer, not an issuance forecast

A project developer can become absorbed in technical potential: hectares restored, methane captured, electricity saved or equipment upgraded. Those numbers are necessary, but marketability begins with a use case. Who can retire the unit, under which rule or claim, during what period, and with what documentation? An answer framed only as companies with climate goals is too broad for investment.

Early buyer conversations may reveal preferences that affect design. An airline may need a recognized methodology and specific vintage. An exporter may require product-chain evidence. A domestic regulated company may prioritize registry eligibility and predictable delivery. Designing around an identified need does not guarantee demand, but it reduces the risk of manufacturing a technically sound asset with no practical destination.

Developers should also disclose uncertainty. Forecast issuance can change after validation, monitoring or operational performance. Conservative delivery ranges and remedies for shortfall create better relationships than maximum-volume promises. In a market with excess supply, credibility and execution can command more attention than another large theoretical pipeline.

Registries are market infrastructure, not filing cabinets

A registry establishes identity, ownership, transfer and retirement. Its interface and data quality influence transaction cost. Buyers need to search units, compare attributes and verify that a serial number has not been used twice. Auditors need durable records. Developers need predictable submission and correction processes. Public observers need enough information to assess claims without exposing protected commercial data.

Interoperability becomes more important if units are used in product records or international programs. Data should move through documented formats while the authoritative status remains clear. Manual re-entry creates errors and makes reconciliation expensive. Application interfaces, standardized identifiers and signed evidence packages can turn the registry into a platform for trustworthy use rather than a final administrative step.

Good infrastructure also reports market health. Issuance, transfers, retirements, concentration, vintages and project types should be visible in consistent series. Policy makers can then distinguish weak demand from delayed settlement, and companies can benchmark liquidity. Transparency will not create buyers by itself, but it reduces avoidable uncertainty.

Banks can connect modernization with future demand

Financial institutions occupy a useful position between project developers and corporate buyers. They finance equipment, understand customer cash flow and can aggregate demand across portfolios. A bank could link an efficiency loan with monitoring requirements and an option for a buyer to acquire resulting units. The structure would connect real modernization to a future certificate without pretending the certificate is risk-free collateral.

Aggregation can also help smaller projects. Verification and contracting costs are difficult to absorb when issuance is modest. Standardized programs can pool similar actions while preserving traceability. The challenge is governance: the aggregator must prevent double counting, allocate revenue transparently and maintain evidence at the underlying project level.

Banks should avoid using balance-sheet strength to mask weak environmental quality. Credit assessment and climate integrity are separate disciplines. A solvent developer can still issue a questionable unit, while a strong project may have a weak sponsor. Financing committees need both analyses and explicit responsibility for each conclusion.

Exporters should treat carbon data as product data

External markets are introducing requirements related to product footprints and embedded emissions. Even when a specific Russian unit is not yet eligible, exporters benefit from knowing the emissions attached to materials, production, power and logistics. The capability supports customer questionnaires, efficiency decisions and scenario planning for future border or buyer requirements.

This data must reconcile with operational and financial records. Estimated factors can start the process, but material product lines need stronger measurement over time. Procurement should request supplier data, engineering should map processes, finance should connect energy and material use to output, and commercial teams should understand what customers actually require. A sustainability report alone is too aggregated for product decisions.

Credits then play a bounded role. They can address a documented residual under an accepted framework, but they cannot repair an unknown footprint. Companies that build measurement first will be ready for several policy outcomes. Those that buy units first may discover that the certificates do not match the boundary, vintage or program demanded by a customer.

Policy should reward retirement and real use, not inventory

Issuance is visible and politically attractive because it demonstrates project activity. Yet a healthy market also needs retirement: the final act that removes a unit from circulation for a stated purpose. Reporting the relationship among issuance, transfer and retirement would show whether units are serving compliance or credible voluntary claims rather than accumulating as speculative stock.

Demand support can take several forms. Regulation may establish obligations; public procurement may recognize verified low-carbon products; modernization programs may let companies monetize measured improvements; export standards may create eligibility pathways. Any mechanism should specify the claim and avoid paying twice for the same outcome. Subsidy, energy saving and certificate revenue can coexist, but additionality rules must be explicit.

The objective should not be maximum trading for its own sake. A smaller market can be effective if it directs money to real reductions at reasonable transaction cost. Conversely, high turnover among intermediaries does not prove environmental impact. Policy metrics should include investment mobilized, verified reductions, retirements, buyer diversity and the cost of achieving each outcome.

A twelve-month agenda for market participants

During the first quarter, developers should map intended buyers and test methodology eligibility before expanding pipelines. Buyers should define acceptable claims and create procurement standards. Registries and policy makers should publish consistent issuance, transfer and retirement data. Financial institutions should identify modernization projects where carbon revenue is supplementary rather than essential.

In the second quarter, pilot offtake agreements can connect a small number of credible projects with repeat buyers. Contracts should address delivery shortfall, methodology change, title, retirement and public claims. Product-footprint pilots can test whether unit data survives an actual customer or export documentation process. Results should be published in aggregated form so the market learns from failure as well as success.

The second half of the year should scale only the mechanisms that demonstrated use. Methodologies can be refined from observed evidence, procurement templates standardized and registry interfaces improved. International accreditation work should continue without becoming the sole demand thesis. The practical goal is a portfolio of domestic and external uses resilient to any single policy outcome.

What boards should measure

Boards financing climate projects need a compact dashboard that separates environmental performance from market performance. Environmental measures include verified tonnes, monitoring exceptions, permanence risk and actual operating savings. Market measures include contracted buyers, concentration, realized price, time to settlement, retirement rate and eligibility by intended use.

Scenario exposure belongs beside those measures. Management should show revenue if international access is delayed, if domestic obligations tighten, if prices fall or if verification reduces issuance. A project that remains viable across several cases deserves a different capital decision from one dependent on a single accreditation date. The discipline is familiar from commodity and infrastructure investment; carbon assets do not repeal it.

Finally, boards should ask whether public claims match evidence. Reputation can be damaged even when title and payment are technically correct. Sample audits of marketing statements, retirement records and product boundaries turn climate governance into an operating control. The aim is not cautious silence but claims that can withstand an informed, skeptical customer.

From a registry of units to a market of purposes

Russia's carbon market does not lack potential supply. The 2026 figures show that its scarce resource is recurring, credible purpose. Sakhalin demonstrates how an obligation can create transactions and how successful adjustment can then reduce them. Product footprints and international aviation may broaden demand, but only for units that meet the required quality, evidence and eligibility.

The next stage should therefore be judged less by how many certificates enter circulation and more by how many useful commercial relationships form around them. Developers need identified buyers, buyers need procurement discipline, registries need transparent data, financiers need conservative cases and regulators need predictable pathways. These pieces create liquidity because they reduce distinct risks, not because they imitate a conventional commodity exchange.

The imbalance reported by Kommersant is a warning, but it is also a diagnostic. It tells participants where the bottleneck sits. Supply has advanced faster than demand architecture. Correcting that gap requires real modernization, defensible claims and contracts built for repeated use. If those foundations emerge, carbon units can become a practical financing and compliance instrument. Without them, impressive issuance will remain inventory waiting for a reason to move.