Carbon and energy markets use different instruments with different rules. We explain them briefly so you know exactly what you are buying or being offered.
Three instruments, three different things
At a glance
- What it is
- Issued by independent standards after a project is verified
- Unit
- 1 credit = 1 tonne CO₂ equivalent (by convention)
- Purpose
- Voluntary financing of emission reductions or removals
- Nature
- Voluntary market; not a permit to emit
From project to credit
A generic outline of a carbon credit’s lifecycle; details differ by standard and registry.
- 01
Project
An activity that avoids or reduces emissions, or stores carbon.
- 02
Monitoring
Activity data is measured and documented.
- 03
Verification
An independent body verifies the reported results.
- 04
Issuance
Credits are recorded in a registry with unique serial numbers.
- 05
Trade / retirement
Credits are traded or retired, avoiding double counting.
In detail
- 01
Voluntary carbon credits (verified)
Units issued by independent standards after verification of a project that reduces or removes greenhouse-gas emissions (for example a renewable-energy, energy-efficiency or forestry project). By convention, one credit corresponds to one tonne of CO₂ equivalent. A voluntary credit is not a permit to emit. Organisations use them voluntarily, to finance emission reductions in addition to their own. Quality varies: the standard, methodology, verifier and retirement of the credit in the registry all matter.
- 02
Regulated emission allowances (EU ETS)
Allowances created under European Union law within the EU Emissions Trading System (EU ETS). An allowance entitles a covered installation to emit one tonne of CO₂ equivalent and is used for legal compliance. It is a regulated instrument, distinct from voluntary credits, and the two are not interchangeable.
- 03
Renewable-energy certificates (guarantees of origin / RECs)
Electronic documents showing that a quantity of electricity (typically 1 MWh) was generated from renewable sources. In the European Union these are guarantees of origin; other regions use REC-type systems. They evidence the origin of energy, not an emission reduction in themselves, and are distinct from both carbon credits and EU ETS allowances.
What we do
- 01Information and guidance on these instruments and the differences between them.
- 02Indicative carbon-footprint estimates for companies, individuals and travel (the calculators from the previous website are being relaunched).
- 03On request, quotations for verified voluntary credits, naming the standard and registry.
How voluntary credits are used
From estimating emissions to retiring credits
Offsetting is a voluntary step after reducing your own emissions; it does not replace it.
- 01
Estimate emissions
Establish the organisation’s carbon footprint using a recognised methodology.
- 02
Choose verified projects
Check the standard, methodology, independent verifier and credit serial numbers in the registry.
- 03
Retire the credits
Credits are retired in the registry in your name so they cannot be reused by anyone else.
Frequently asked questions
About credits, allowances and certificates
Short answers to the questions we are asked most often, revised and corrected from the previous website.
Standards and registries
When a service involves voluntary credits, we state the applicable standard (for example Verra VCS or Gold Standard) and the registry where the credit is issued and retired. The names are examples of existing standards only; they do not imply a partnership or accreditation of the company.
Let's talk
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