What are carbon credits?
A carbon credit is one tonne of CO₂ avoided or removed by a verified project — the basic unit of climate finance. Here’s what they are, why they exist, the different types, who issues them, and how to tell a real credit from a weak one.
A carbon credit, defined.
A carbon credit (also called a carbon offset credit) is a tradable certificate representing one metric tonne of carbon dioxide equivalent (CO₂e) that has been avoided or removed from the atmosphere by a verified project. A carbon registry issues each credit with a unique serial number and tracks who owns it, so a tonne can only ever be claimed once. A credit becomes a carbon offset when it is permanently retired against specific emissions.
Putting a price on a tonne of carbon.
Emitting CO₂ is normally free, even though it imposes a real cost on the climate. Carbon credits fix that by creating a market: a project that cuts or removes a verified tonne earns a credit it can sell, and a buyer who can’t yet eliminate a tonne of their own can fund that reduction instead. The result is finance flowing to forests, clean energy, and carbon removal that would otherwise be unfunded — and a price signal that makes avoiding emissions worth something.
Types of carbon credit.
Every credit is either an avoidance or a removal — see how project types map to the UN SDGs.
Earned by preventing emissions that would otherwise occur — protecting forests, capturing landfill gas, or replacing fossil power and dirty cookstoves. Cheaper and plentiful.
Earned by taking CO₂ already in the air and storing it — reforestation, blue carbon, soil, biochar and direct air capture. Scarcer and pricier, and what credible net-zero needs for residual emissions.
Standards set the rules; registries issue the credits.
A standard — such as Verra’s VCS, Gold Standard, or Puro.earth — is the methodology and rulebook a project must follow to qualify. A registry is the public database that issues the serialized credits and records every transfer and retirement. In the voluntary market these are independent bodies, not governments; compliance markets use their own regulated units. See the standards we accept and how we vet them →
Voluntary vs compliance credits.
Individuals and businesses buy by choice — for climate responsibility, brand and ESG goals. Flexible project choice, no legal obligation. This is where most of our credits sit.
Regulated emitters buy or surrender credits to meet a legal cap — emissions trading schemes, or CORSIA for aviation. Eligibility and accounting rules are stricter and scheme-specific.
What makes a high-quality credit.
Six tests separate a real climate contribution from a number on a spreadsheet.
The reduction would not have happened without the carbon finance — the single most important test of a real credit.
How long the carbon stays out of the atmosphere, from years for some avoidance to centuries for geological storage.
An accredited third party measures and audits the project before any credit is issued.
The project doesn’t simply push emissions somewhere else (e.g. logging moving to the next valley).
The year the reduction occurred — recent vintages reflect today’s climate need.
A credit is retired once, in one name, and can never be resold or claimed again.
Criticisms — and how to buy well.
Carbon credits have been criticised, fairly, when projects over-credit, lack additionality, or aren’t permanent. None of that makes the tool worthless — it makes selection everything. Treat credits as a complement to cutting your own emissions, not a substitute.
- ✓ Reduce your own emissions first
- ✓ Buy registry-traceable, recently-dated credits
- ✓ Prefer independently-rated, CCP-aligned projects
- ✓ Use durable removals for residual net-zero emissions
- ✓ Make sure the credit is retired in your name
Common questions.
What are carbon credits?
A carbon credit is a tradable certificate that represents one tonne of carbon dioxide equivalent (CO₂e) that has been avoided or removed from the atmosphere by a verified climate project. Each credit is issued and given a unique serial number by a carbon registry (such as Verra or Gold Standard), and can only be claimed once it is permanently retired.
What is the difference between a carbon credit and a carbon offset?
A carbon credit is the unit — one verified tonne issued by a registry. It becomes a carbon offset only when it is retired against specific emissions. In short: you buy a credit; retiring it is the offset.
Who issues carbon credits?
Independent carbon standards set the rules a project must meet (Verra’s VCS, Gold Standard, Puro.earth, the American Carbon Registry and others), and registries issue and track the serialized credits. They are not issued by governments in the voluntary market, though compliance schemes have their own regulated units.
Are carbon credits worth it / do they actually work?
High-quality, registry-verified credits fund real emission reductions and removals and are a legitimate climate tool — but quality varies, and some projects have been criticised for over-crediting. The fix is rigorous selection: buy credits that are additional, independently rated, recently dated and permanently retired, and reduce your own emissions first.
How much does a carbon credit cost?
Prices range from a few dollars per tonne for some avoidance credits to $100–$1,000+ for durable engineered removals, driven by project type, vintage, co-benefits, volume and registry. At retail, our credits run from about $12 to $350 per tonne.
What is one carbon credit equal to?
One carbon credit equals one metric tonne of CO₂e avoided or removed — about the emissions from driving an average petrol car roughly 4,000–6,000 km, or a single long-haul return flight per passenger.
Ready to put a credit to work?
Browse verified, registry-traceable credits — or learn exactly how they’re created and retired.