8 May 2024
VCM
The Voluntary Carbon Market (VCM) enables businesses, governments, and individuals to purchase carbon credits to offset their emissions. Carbon credits can be seen as a company’s voluntary tax on their emissions, channelling funding into projects that reduce or remove carbon from the atmosphere.
Companies around the world are under growing pressure to reduce their carbon footprint. After lowering emissions, purchasing high-quality carbon credits to offset remaining emissions is an essential strategy for businesses to make a significant contribution to sustainability.
Projects that reduce or remove carbon generate carbon credits. Each credit represents one metric tonne of CO2e.
The emission reductions and removals are verified by a third-party then registered through standards like Verra or the Gold Standard.
Once registered, these carbon credits can be sold directly to an end buyer or to an intermediary who will trade them into the secondary market.
Project developers can fund their activities that reduce or remove CO2e with the revenue generated from selling carbon credits.
Create and manage projects that generate credits
Certification, verification and standardisation to ensure project credibility
Companiesor individuals seeking to compensate for their emissions
Facilitate the buying and selling of carbon credits
The market is projected to grow as more entities commit to net-zero targets and as international cooperation on climate action intensifies. However, ongoing improvements in transparency, standardisation, and verification are crucial to its long-term efficacy and credibility.
Amidst the flurry of media attention surrounding clean cookstove projects, it is essential to consider a full range of standpoints to ensure that we focus on continuously improving the quality and integrity of carbon projects. Scrutiny drives change, and with it, the voluntary carbon market can continue to deliver climate finance to initiatives that go beyond emission reductions and offer meaningful benefits to communities.
With Article 6 developments set to drastically affect views on quality and integrity in the VCM, now more than ever it is essential to gain an understanding of what exactly Article 6 is, how the VCM is involved, and why it is so important.
Voluntary carbon project investment has taken centre-stage over the last eighteen months as secondary market spot trading of carbon credits has become increasingly difficult. From inflated prices on marketplaces to the crowded world of brokered spot transactions, sourcing of carbon credits directly from carbon project investments increasingly offers a reliable alternative to the traditional methods of purchasing carbon credits.