Carbon credit
A tradable unit issued under a programme, commonly representing one tonne of CO₂e reduction or removal.
Example
The programme's rules govern measurement, issuance and use.
The catch
A credit's label alone does not establish environmental quality.
In more depth
Carbon credit, explained.
A carbon credit starts life as a project registered under a programme's methodology. An independent body validates the design. Once the project runs, the developer monitors results and a separate verifier checks them, and only then does the programme issue serialised credits into a carbon registry. A credit can change hands many times after that, but it delivers a claim only once, when someone retires it.
Quality depends on the project behind the serial number. The reduction has to be additional and measured against a conservative baseline, and no other party may claim the same tonne. Credits based on stored carbon also need protection against reversal, which is where permanence comes in. The ICVCM's Core Carbon Principles set a threshold across these tests, and credits issued under approved programmes and methodologies can carry its label. Reductions and removals are different goods, and the SBTi's net zero standard accepts only removals for neutralising residual emissions.
The claim made with a credit deserves as much scrutiny as the credit itself. Under Directive (EU) 2024/825, a business may not claim that a product has a neutral, reduced or positive emissions impact on the basis of offsetting. Credits can still back a contribution claim that describes the funding and leaves the buyer's own footprint untouched.
In the journal