The hidden costs of last-minute offset purchasing and how early planning saves money, secures quality, and reduces risk
Most companies treat carbon offsetting like Christmas shopping; a December scramble that drives up prices, limits choices, and creates unnecessary stress. But data from the voluntary carbon market reveals some interesting truths. The companies getting the best deals and highest-quality projects are the ones planning their offset strategy right now, in September.
The September advantage: four strategic benefits
1. Budget predictability and cost control
Historical data shows end-of-year upward pressure is more common than autumn price stability, making early planning the safer financial bet. September buyers secure stable baseline pricing, avoid December premium spikes, and gain better cost forecasting for annual budgets, all whilst reducing exposure to market volatility.
2. Supply security for quality projects
Quality projects sell out fast. By December, high-demand project types may be completely allocated, leaving late buyers with older vintages and less choice. September planning provides access to the full range of available projects, time for proper evaluation, and first choice of newer, more desirable vintages. Current market conditions show nature-based credits with stable pricing and high availability, whilst tech-based removal credits face limited availability with rising demand.
3. Due diligence time reduces risk
Early planning allows thorough evaluation of project documentation, developer track records, co-benefits alignment with corporate goals, and geographic diversification opportunities. With fresh CDP scores available, September offers the perfect window for strategic assessment without deadline pressure.
4. Integration with verified emissions data
The biggest mistake in offset strategy? Acting before you know what to offset. September planning allows alignment of offset quantities with verified emissions data from recent CDP submissions and annual footprint assessments, preventing over-purchasing, under-purchasing, and resource waste from poor quantity planning.
Why December becomes a costly scramble
Understanding December’s carbon market dynamics reveals exactly why early planning matters for strategic carbon management.
The pressure cooker effect: With CDP disclosure deadlines in July, September scoring, and most corporate sustainability reports published in Q1, December becomes the critical final window. Companies face mounting pressure to finalise their carbon positions before year-end reporting deadlines, creating predictable bottlenecks in market demand.
Corporate demand surge: Large corporations consistently drive December’s market intensity as they finalise their annual carbon strategies. Major companies across industries follow similar reporting cycles that create concentrated demand in the final weeks of each year. The scale can be substantial. As an example, December 2023 saw 36 million tonnes of carbon credits retired – the largest monthly volume ever recorded, with major corporations like Microsoft, Shell, Salesforce, and HP all executing significant purchases.
The premium penalty: This concentrated demand creates exactly the market conditions that drive up prices and limit choices. When the majority of corporate buyers enter simultaneously, supply tightens and costs rise just when companies need to make their largest annual purchases. Market forecasts typically show baseline pricing in September-October, anywhere up to 10-15% increases in November, and significant premiums for urgent December orders.
The pattern repeats year after year. December becomes a high-stress, high-cost environment where companies compete for limited supply under tight deadlines.
Market timing lessons from compliance systems
Unlike regulated compliance markets, voluntary carbon markets don’t have fixed legal deadlines. However, they follow predictable corporate behaviour patterns that create artificial seasonality.
The EU ETS model: Companies subject to EU ETS requirements often delay purchasing allowances until near deadline, creating predictable demand surges that push prices higher. This compliance-driven volatility illustrates how artificial timing constraints – whether regulatory or self-imposed corporate reporting cycles – concentrate market risk and disadvantage late buyers across all carbon markets.
Voluntary market parallels: Corporate reporting cycles drive similar demand patterns in voluntary markets. Many companies “true-up” their emissions reporting at year-end, creating intense buying pressure in November and December that tightens supply precisely when most companies need to purchase.
Liquidity amplifies volatility: The voluntary carbon market’s limited liquidity means large late-year purchases can disproportionately push up prices. A few major corporate buyers entering in December can create price spikes affecting all purchasers.
Quality considerations beyond timing
Vintage premiums: “Fresh” credits from recent project vintages sell at premiums over older vintages. Early planning locks in availability of newer vintages that may be sold out by December, leaving late buyers with older, less desirable inventory.
Project type trends: While all credits experience seasonal demand patterns, removal credits and high-quality nature-based solutions face additional upward pressure from net-zero commitments requiring permanent carbon removal. This sustained demand compounds typical December spikes, making these premium credit types subject to both seasonal volatility and underlying upward trends.
Supply constraints: With 40% of annual corporate purchasing concentrated in Q4, early buyers avoid the supply bottlenecks that force late buyers into compromise positions on quality and pricing.
Best practices from sophisticated buyers
Forward contracting: Many experienced buyers now move toward September-October purchasing to secure supply and avoid end-of-year premiums, using the post-CDP reporting period for strategic planning.
Split strategies: Some companies adopt hybrid approaches, purchasing 50% early for cost certainty and supply security, then 50% closer to year-end for flexibility. This balances predictability with the opportunity to capture unexpected price movements.
Multi-year planning: Leading companies increasingly treat offset procurement like strategic sourcing, planning 12-18 months ahead rather than scrambling annually.
The bottom line: strategic timing for competitive advantage
The December offset market is a seller’s market. Limited availability, deadline pressure, and seasonal demand favour project developers over corporate buyers.
The September offset market is a buyer’s market. Higher availability, stable pricing, and strategic planning time favour companies with foresight.
The real advantage isn’t just financial; it’s strategic. Companies that start their offset strategy in September position themselves as climate leaders with integrated sustainability programmes, rather than reactive compliance buyers ticking boxes before deadlines.
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Our team can help you navigate market dynamics, secure quality projects at optimal timing, and position your offset investments for maximum strategic value.
Don’t let this September window close without a plan.
Book a consultation to discover how strategic offset planning can transform your carbon procurement from year-end scramble to competitive advantage.
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Sources:
BloombergNEF (Jan 2024). Carbon Offset Demand Hits Record in 2023 Off Huge December.
CDP (2025). Disclosure Cycle 2025 Timeline and Deadlines.
European Union (May 10, 2023). Directive (EU) 2023/959 of the European Parliament and of the Council (Recital 66).
World Federation of Exchanges (WFE) (2023). Unveiling Price Dynamics in the Voluntary Carbon Market: Trends and Insights.
New Private Markets (2023). Data Snapshot: Pricing on the Voluntary Carbon Market.
Veyt (2024). VCM 2023 Recap and 2024 Outlook.
Cloverly (2023). Top 2023 Voluntary Carbon Market Insights for Climate Leaders.
EU ETS Market Analysis. Seasonal Pricing Patterns.
Voluntary Carbon Market Analysis (2023–2024). Corporate Procurement Trends.
A critical note:
The timing dynamics mentioned in the article are most pronounced for carbon removal credits – the permanent CO2 removal technologies and high-quality nature-based solutions that command premium pricing and face the tightest supply constraints. While all credit types experience seasonal patterns, removal credits exhibit the highest price volatility and access limitations due to surging corporate demand for net-zero compliance.
