What is the Carbon Credit Market? 

The carbon market is a tool providing mechanisms that aim to economically reduce CO2 emissions toward the solution for global warming.

1
ton of CO₂

1
ton of CO₂

Carbon credits are issued for each ton of CO2e of the project.  

Carbon credits are issued for each ton of CO2e of the project. Each carbon credit issued has a unique identity, and is made available to be used by different entities to offset their carbon footprint.

Companies use this system to invest in forests & offset their emissions. A carbon credit once sold (retired) can never be traded again.

1
ton of CO₂

=

1
Carbon
Credit

=

1
ton of CO₂

Carbon credits are issued for each ton of CO2e of the project. Each carbon credit issued has a unique identity, and is made available to be used by different entities to offset their carbon footprint.

The carbon market is a tool providing mechanisms that aim to economically reduce CO2 emissions toward the solution for global warming.

Through the years: An exponential rise in carbon credit sales

This graphic shows the amount of VCUs that were retired - i.e. used - to compensate for carbon footprints worldwide on an yearly basis. Each VCU represented is equivalent to the compensation of 1 CO2 Ton by a carbon capture/avoidance project.

This number is record breaking over the past decade, and through the VCS data, it can be determined that 2022 will see a higher number of retirement than the previous year. 

 

This exponential increase can be attributed to new regulations (such as the Paris agreement, COP26) and reports on climate change (such as IPCC), putting unprecedented pressure on companies to achieve the target of Net Zero in 2030, by reducing and eventually offsetting excess emissions. 

2021: Close to 130 Million carbon credits retired  

This graphic shows the amount of VCUs that were retired - i.e. used - to compensate for carbon footprints worldwide on an yearly basis. Each VCU represented is equivalent to the compensation of 1 CO2 Ton by a carbon capture/avoidance project.

2021: Close to 130 Million carbon credits retired  

This number is record breaking over the past decade, and through the VCS data, it can be determined that 2022 will see a higher number of retirement than the previous year. 

 

This exponential increase can be attributed to new regulations (such as the Paris agreement, COP26) and reports on climate change (such as IPCC), putting unprecedented pressure on companies to achieve the target of Net Zero in 2030, by reducing and eventually offsetting excess emissions. 

This year:  Close to 30 Million carbon credits retired by April 

In the first 4 months of 2022, carbon credit retirement saw unprecedented numbers. By mid-april the VCS platform has already retired over 30 million credits globally. 

This is being attributed to the mobilisation of the global economy in 2021, right after the COVID-19 crisis. As expected, in the year 2022, the carbon credit market is set to surpass the numbers of the previous year. 


This graphic shows the amount of VCUs that were retired - i.e. used - to compensate for carbon footprints worldwide in 2022 (accumulated). Each VCU represented here represents the compensation of 1 CO2 Ton by a carbon caputre/avoidance project

FOREST BASED SOLUTIONS CREATE MORE VALUE

Through the years: 
An exponential rise in carbon credit sales

The market shows a growth of newer vintages 

Vintage i.e the age of a carbon credit is determined by the difference between the current year and the credit's  issuance year. Vintages play a vital role in carbon credit pricing, even though, there is currently no regulation that disincentives vintage carbon credits. 

 

The current trend shows a major rise in pricing, as newer vintages flood the carbon credit market. 
This price fluctuation could also be attributed to the rising  demand for high quality carbon credits by companies on their path to sustainability.

This graphic represents the amount of VCUs that have been used, and the ones which are still active - can still be traded - according to their Vintages.

The market shows a growth of newer vintages 

Vintage i.e the age of a carbon credit is determined by the difference between the current year and the credit's  issuance year. Vintages play a vital role in carbon credit pricing, even though, there is currently no regulation that disincentives vintage carbon credits. 

 

The current trend shows a major rise in pricing, as newer vintages flood the carbon credit market. 
This price fluctuation could also be attributed to the rising  demand for high quality carbon credits by companies on their path to sustainability.

Here are the VCUs that were issued - i.e. made available on the certifier to be used for compensation - on the last 36 months

(NOTE: the 2022 index only counts up to March 2022)

This graphic represents the amount of VCUs that have been used, and the ones which are still active - can still be traded - according to their Vintages.

Retirement escalates to match issuance

Carbon credit issuance activity has been at an all time high over the past decade as more governments as well as independent bodies are getting actively involved in sustainability as a means of economic and ecological upliftment of local areas, communities and biodiversity. 
 

However, as more companies are seeking carbon neutrality with co-benefits from projects, especially in the past five years, there seems to be a closing gap between issuance and retirement. 

Carbon credits issued V/S Carbon credits retired

Agricultural Forestry has the highest number of market presence


Forest based projects lead the active VCU list. Due to the huge rise in deforestation in the past decade, increase in unsustainable farming means, there has been a movement among companies to reduce their emissions on this front. 

The huge number of credits could be attributed for companies' need to offset their emissions on their impact areas. 

Forestry also assists companies seeking co-benefits,  directly affecting multiple arrays of impact i.e climate, biodiversity and community


Did you know? 

Reflora has developed a revolutionary technique to assess project co-benefits

Learn about RIQA

Agricultural Forestry has the highest number of market presence


Forest based projects lead the active VCU list. Due to the huge rise in deforestation in the past decade, increase in unsustainable farming means, there has been a movement among companies to reduce their emissions on this front. 

The huge number of credits could be attributed for companies' need to offset their emissions on their impact areas. 

Forestry also assists companies seeking co-benefits,  directly affecting multiple arrays of impact i.e climate, biodiversity and community. 


Agricultural Forestry has the highest number of market presence


Forest based projects lead the active VCU list. Due to the huge rise in deforestation in the past decade, increase in unsustainable farming means, there has been a movement among companies to reduce their emissions on this front. 

The huge number of credits could be attributed for companies' need to offset their emissions on their impact areas. 

Forestry also assists companies seeking co-benefits,  directly affecting multiple arrays of impact i.e climate, biodiversity and community. 


Did you know? 

Reflora has developed a revolutionary technique to assess project co-benefits

Learn about RIQA

Forestry: The most popular carbon credit category

  SAVE THE PLANET, EARN MORE, ACCELERATE YOUR BUSINESS

  SAVE THE PLANET,
EARN MORE,
ACCELERATE YOUR BUSINESS

Common words in the carbon market

Subscribe to Our Mailing List

Thanks for subscribing!

What is a carbon credit?

Environmental projects generate carbon credits by naturally sequestering GHG emissions.These credits are globally recognized certificates allowing individuals and companies to compensate for their carbon (CO2) footprint. The process of credit issuance is long, physical and can take up to 3-5 years, as every single factor of sequestration is considered. 

What does retirement mean? 

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 
 

What are Vintages? 

Carbon credits have an attribute called "Vintage" that represent the year in which the carbon absoption / avoidance happened. This aspect is taken in consideration on carbon credit trading and pricing. But that does not affect how the carbon credits can be used.

What is a carbon credit?

Environmental projects generate carbon credits by naturally sequestering GHG emissions.These credits are globally recognized certificates allowing individuals and companies to compensate for their carbon (CO2) footprint. The process of credit issuance is long, physical and can take up to 3-5 years, as every single factor of sequestration is considered. 

What does retirement mean? 

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 
 

What are Vintages? 

Carbon credits have an attribute called "Vintage" that represent the year in which the carbon absoption / avoidance happened. This aspect is taken in consideration on carbon credit trading and pricing. But that does not affect how the carbon credits can be used.

What is a carbon credit?

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 
 

What does retirement mean? 

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 
 

What are Vintages? 

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 
 

What are Vintages? 

Carbon credits have an attribute called "Vintage" that represent the year in which the carbon absoption / avoidance happened. This aspect is taken in consideration on carbon credit trading and pricing. But that does not affect how the carbon credits can be used.

What are Vintages? 

Carbon credits have an attribute called "Vintage" that represent the year in which the carbon absoption / avoidance happened. This aspect is taken in consideration on carbon credit trading and pricing. But that does not affect how the carbon credits can be used.

What is a carbon credit?

Environmental projects generate carbon credits by naturally sequestering GHG emissions. Credits are globally recognized certificates allowing entities to compensate for their carbon footprint. The process of credit issuance can take up to 3-5 years, as every single factor of sequestration is considered. 

 

What is a carbon credit?

Environmental projects generate carbon credits by naturally sequestering GHG emissions. Credits are globally recognized certificates allowing entities to compensate for their carbon footprint. The process of credit issuance can take up to 3-5 years, as every single factor of sequestration is considered. 

What does retirement mean? 


When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 

What does retirement mean? 

When a carbon credit is purchased, it is taken off the market, never to be traded or swapped ever again. This process is called retirement.

Carbon credits from certified projects have a unique ID that help identify and track the issuance to retirement journey of these credits. 

Common words in the carbon market

Insights

Invest better with Reflora

Stay Informed

Thanks for subscribing!

© Reflora Initiative 2022. All rights reserved. 

Interested in learning even more about sustainability

 Partners & Clients

Interested in learning even more about sustainability?

Sign up to the insights newsletters 

Thanks for subscribing!

Interested in learning even more about sustainability?

Sign up to the insights newsletters 

Thanks for subscribing!

Interested in learning even more about sustainability?

Your comprehensive guide to the movement of the  carbon market

Home

Insights

Insights

Home

The Green Slate: Climate news for everyone

Calculating your footprint

Tourism & Sustainability 

The legislative proposal of the EU

Do you know what it takes to measure your carbon footprint? Learn how to calculate it with Reflora.

Read about the challenges and opportunities the tourism sector faces in achieving carbon reduction.

Learn about what the EU is doing to reach its 2030 target of cutting down emissions by 55%.

There are more articles waiting for you  !!!

Do you know what it takes to measure your carbon footprint? Learn how to calculate it with Reflora.

Read about the challenges and opportunities the tourism sector faces in achieving carbon reduction.

Learn about what the EU is doing to reach its 2030 target of cutting down emissions by 55%.

Tourism & Sustainability 

© 2023 Powered by Reflora Initiative