Two weeks into 2026, the carbon market's most important development was not a price record, though those are coming, but a sentence spoken at a conference in Abu Dhabi: the pipeline of carbon credits carrying a Letter of Authorisation under Article 6 is filling. For a market that has spent years long on frameworks and short on authorised supply, that quiet observation from a registry representative at Carbon Forward Middle East may be the year's first genuinely structural data point.
Authorisations Are the New Bottleneck Metric
A Letter of Authorisation is the moment a host country formally approves credits for international transfer under Article 6, triggering the corresponding adjustments that give those credits their integrity. For two years, the market's standing criticism was that frameworks outnumbered authorised projects by an order of magnitude. A filling LoA pipeline, reported this week by a registry representative, suggests that is beginning to change. It matters because authorisation is the gateway to every premium channel: CORSIA, compliance-linked purchases, and the EU's eventual international credit buying. Watch this metric through 2026. It will tell you which countries are actually open for business.
Europe's Price Story Has a Supply Side
European carbon continued its climb, posting a seventh straight day of gains, and one expert at the Abu Dhabi conference forecast EU ETS prices breaking the €101 record within three months on a looming allowance supply crunch. Forecasts are forecasts, and bullish positioning is stretched enough that analysts also warned of sudden pullbacks. But the structural story underneath, shrinking auction volumes and expanding obligations, is not speculative. Meanwhile the EU and UK confirmed they will open talks on linking their carbon markets, a step that would create a larger, more liquid compliance bloc and another anchor for long-term carbon value.
Buyers Are Getting Specific
The week's most useful demand-side insight came from the Middle East, where experts reported that many large companies remain wary of carbon credits in general but are keen on local projects. Read that carefully: the scepticism is not about offsetting as a concept but about distance, opacity and unfamiliar jurisdictions. Buyers increasingly want supply they can visit, verify and explain. That preference rewards exactly the things serious project developers have been arguing for: proximity, transparency and community-embedded projects. Elsewhere, Armenia joined the queue of countries writing carbon finance into their climate plans, and California's regulator held its emissions ambition steady in proposed cap-and-invest changes even as prices dipped on the news.
What This Means for Investors
Three takeaways. First, the LoA pipeline is the metric that converts policy into investable supply, and it is moving; jurisdictions that authorise early will set the reference prices everyone else clears against. Second, Europe's tightening supply and the EU-UK linking talks reinforce the long-term compliance price floor, even allowing for near-term volatility. Third, buyer preference is narrowing toward credible, well-documented, locally legible projects, which is precisely the supply profile that markets like Indonesia can offer at scale. The pipeline is filling. The question for 2026 is whose credits are in it.
