top of page

Carbon credits are tradeable certificates or permits representing the right to emit one metric tonne of carbon dioxide or the equivalent amount of different GHGs (“MTCO2e”). Carbon credits typically include the following elements.

Qualified Emission Reduction

The core of a carbon credit is its representation of a specific amount of MTCO2e emissions that have been reduced, avoided, or removed from the atmosphere.

Project Types

Credits originate from various types of projects, such as renewable energy, reforestation, energy efficiency, carbon capture and underground storage (“CCUS”), methane capture and reclamation, and more, each with its own standards and methodologies for calculating emission reductions.

Certification Standards

Carbon credits are often certified under specific standards or protocols that ensure their environmental integrity and quality. Common standards provide guidelines on how to quantify, monitor, and verify emission reductions.

Verification

Projects undergo rigorous verification by an independent third-party verifier (“TPV”) to ensure that the emission reductions are real, measurable, permanent, and additional.

Registries

Registries are registered in a public or private registry that track the creation, ownership, and retirement of each carbon credit, ensuring transparency and preventing double-counting.

Traceability

Each credit has a unique serial number, allowing buyers to trace its origin, verify its legitimacy, and ensure it has not been double-counted or double-sold.

End Use

The end-use of a carbon credit is for offsetting purposes, allowing individuals or companies to compensate for their emissions. Once used for offsetting, a credit is retired in the registry to ensure it is not resold.

Legal and Contractual Aspects

The purchase and sale of carbon credits involve legal agreements detailing terms and conditions, such as the volume of credits, price, delivery date, and payment terms.

Market Value

The market value of a carbon credit is determined by supply and demand dynamics in the carbon market. Factors influencing the value include the type of project, its location, co-benefits, and current market trends.

Co-benefits

Many carbon credits come with additional benefits beyond carbon reduction, such as improving local air quality, preserving biodiversity, or contributing to local communities' sustainable development goals.

© 2025 by Carbon Offset Solutions

bottom of page