FAQ

A carbon credit is a tradable certificate or permit that represents the reduction of one metric ton of carbon dioxide (CO₂) or an equivalent greenhouse gas. These credits are used by companies and governments to offset their emissions and meet regulatory or voluntary climate goals. Carbon credits are at the heart of emissions trading systems and are essential tools for achieving net-zero targets.

The carbon credit market allows businesses and individuals to buy and sell carbon credits. Entities that reduce their emissions (e.g., by planting trees or installing clean energy) can generate credits, while those that emit more can buy these credits to offset their impact. The market is divided into two segments: compliance markets (regulated by governments) and voluntary markets (driven by CSR and sustainability goals).

Compliance markets are regulated by laws and international agreements (like the EU ETS or California Cap-and-Trade). Companies under these regulations must reduce or offset emissions. Voluntary markets, on the other hand, are used by organizations and individuals choosing to offset emissions without legal obligation, often for ESG reporting or sustainability branding.

Carbon credits are verified by third-party organizations and carbon registries like Verra, Gold Standard, and Climate Action Reserve. These bodies ensure that emission reductions are real, measurable, permanent, and additional. Verification adds transparency and credibility, which is crucial for buyers and investors.

Carbon credits can be generated by a variety of projects that reduce or remove greenhouse gases. These include renewable energy (solar, wind), reforestation, afforestation, improved cookstoves, methane capture, borehole installations, and regenerative agriculture. Each project type follows specific methodologies for measurement and verification.

Prices vary widely based on the type of project, market (voluntary or compliance), certification body, and location. As of 2024, voluntary credits typically trade between $5–$20 USD per credit, while compliance credits (e.g., EU ETS) can exceed $100 USD. Prices are expected to rise significantly due to tightening regulations and global climate commitments.

Carbon credits help companies offset emissions they can’t yet eliminate, allowing them to achieve carbon neutrality or meet ESG targets. Buying credits can enhance brand reputation, reduce regulatory risk, and attract environmentally conscious investors. For many industries, credits are a cost-effective bridge to net-zero.

Carbon reduction refers to directly lowering emissions (e.g., using electric vehicles), while carbon offsetting involves compensating for emissions by funding reduction projects elsewhere. Both are crucial, but reduction is preferred long-term, and offsetting is used for unavoidable emissions.

Investors can fund carbon credit projects or purchase credits with the intent to sell them at a higher price as demand grows. Some platforms also offer tokenized carbon credits for trading. Profit is driven by increasing demand from companies, governments, and ESG-focused funds.

Blockchain brings transparency, traceability, and accessibility to the carbon credit market. Projects can tokenize their credits, allowing them to be traded on crypto exchanges. This reduces fraud, improves liquidity, and opens the market to global retail investors through digital assets like CRB Coin.

Nature-based carbon credits are generated from projects that use natural systems to capture or prevent greenhouse gas emissions. These include reforestation, forest preservation, wetland restoration, and soil carbon programs. They not only reduce carbon but also provide biodiversity and community benefits.

The lifespan varies by project type, but most are designed to generate credits for 10 to 30 years. Borehole projects, for instance, may be valid for 15 years, generating credits annually. Long-term monitoring and maintenance are often required for continued credit issuance.

Besides emission reductions, carbon projects often provide social, health, and environmental benefits—called co-benefits. Examples include clean water access, job creation, health improvements from cleaner air, and biodiversity preservation.

Additionality means the carbon reductions would not have occurred without the carbon credit project. This is a key principle in ensuring that credits reflect real and impactful climate action. Verification bodies assess and validate additionality.

Credits are issued by recognized registries like Verra (VCS), Gold Standard, Climate Action Reserve, and American Carbon Registry. These organizations review project data, methodologies, and third-party audits before issuing credits onto a public ledger.

Yes, when a carbon credit is used to offset emissions, it is permanently “retired” and removed from circulation. This ensures no double-counting. Retirement is tracked in registries and serves as proof of climate impact for the buyer.

All verified credits are assigned unique serial numbers and tracked on digital registries. These ledgers prevent double-spending and increase transparency. Blockchain technology is increasingly being used for enhanced traceability.

There is no single global authority, but frameworks like the Paris Agreement Article 6 and national ETS programs provide guidance. International standards like Verra and Gold Standard help ensure quality and consistency across voluntary markets.

Registries are platforms that oversee the issuance, transfer, and retirement of carbon credits. They provide transparency, prevent fraud, and record ownership history. Examples include Verra, Gold Standard, and the UNFCCC CDM registry.

Companies often evaluate projects based on credibility, impact, location, price, and alignment with corporate values. Many prioritize verified projects with strong co-benefits, and increasingly favor digital platforms offering traceable, blockchain-based credits.

Cookstove projects distribute fuel-efficient or clean-burning stoves to communities in developing regions. These reduce the need for firewood, lowering deforestation and emissions. Each stove can save tons of CO₂ annually while improving health by reducing indoor air pollution.

Borehole projects provide access to clean groundwater, eliminating the need to boil water over open fires. This reduces firewood consumption, lowering CO₂ emissions. Each functioning borehole can save hundreds of trees and generate hundreds of carbon credits per year.

Risks include regulatory changes, project failure, double-counting, and market volatility. Poorly managed projects may not deliver expected emission reductions. Using verified, well-audited credits and diversifying investments help reduce risk.

Carbon leakage occurs when emission reductions in one area lead to increased emissions elsewhere. For example, protecting one forest may shift deforestation to another area. High-quality projects are designed to minimize leakage through strong monitoring.

These credits are based on preventing emissions that would have occurred otherwise. Examples include protecting forests from logging or replacing diesel generators with solar panels. They differ from removal credits, which physically remove CO₂ from the atmosphere.

Due to global climate targets and stricter regulations, carbon credit prices are projected to rise. Analysts estimate voluntary credit prices could reach $30–$100 per ton by 2030. Compliance market credits may grow even faster depending on policy.

CRB Coin enables fractional ownership and trading of tokenized carbon credits on the blockchain. It increases market access, especially for smaller investors, and ensures traceability. CRB Coin connects sustainable finance with decentralized technology.

Article 6 outlines rules for international carbon trading between countries. It introduces mechanisms for transferring emission reductions (ITMOs) and supports global collaboration. These rules aim to scale carbon markets and enhance climate ambition.

Removal credits come from capturing CO₂ (e.g., reforestation, DAC technology), while avoidance credits prevent emissions (e.g., cookstoves, solar panels). Both are valid but serve different roles in climate strategies. Removal is increasingly prioritized for long-term net-zero goals.

Carbon markets fund projects in vulnerable communities that otherwise lack climate finance. These projects offer jobs, clean energy, and health improvements. By channeling funds from polluting entities to sustainable development, carbon markets can reduce global inequality.

Blue carbon projects focus on coastal and marine ecosystems like mangroves, seagrass beds, and salt marshes. These habitats store large amounts of carbon, and protecting or restoring them generates high-integrity carbon credits with strong biodiversity co-benefits.

Carbon credits support the Environmental (E) pillar of ESG by enabling emissions compensation and financing sustainable projects. Companies use verified carbon offsets to demonstrate climate responsibility and enhance ESG ratings for investors.

Double-counting occurs when more than one entity claims the same emission reduction. It undermines trust in the market. High-quality registries and blockchain solutions like CRB Coin ensure transparency and prevent this issue.

Voluntary standards (e.g., Verra, Gold Standard) are market-driven and used by companies seeking climate leadership. Compliance standards (e.g., EU ETS, CORSIA) are legally binding under governmental frameworks. Both require robust verification.

A carbon footprint measures the total greenhouse gas emissions caused directly and indirectly by an individual, organization, event, or product. Reducing your footprint and offsetting the rest is key to achieving climate neutrality.

The United Nations Framework Convention on Climate Change (UNFCCC) oversees mechanisms like the Clean Development Mechanism (CDM) and Paris Agreement Article 6. It provides global governance, standards, and reporting frameworks for international trading.

Projects often provide jobs, clean energy, water access, education, and better health. For example, clean cookstove or borehole projects reduce respiratory disease, empower women, and improve quality of life while reducing emissions.

The most trusted carbon credit certifiers include Verra (VCS), Gold Standard, Climate Action Reserve, and Plan Vivo. Each has strict methodologies, third-party audits, and public registries to ensure integrity and transparency.

Yes, carbon credits can be traded over-the-counter (OTC), on digital marketplaces, or via tokenized platforms like CRB Coin. This enables price discovery, liquidity, and accessibility for institutional and retail investors alike.

Blockchain ensures transparency, traceability, and tamper-proof tracking of carbon credits. It prevents fraud and double-counting, and allows fractional ownership. CRB Coin leverages blockchain to make carbon credit investing secure, efficient, and globally accessible.

Voluntary carbon credits are purchased by individuals or companies to offset emissions without being legally required. Compliance carbon credits are mandated by government regulations and often trade on formal carbon markets like the EU ETS.

Yes, under Article 6 of the Paris Agreement, countries can trade emissions reductions through Internationally Transferred Mitigation Outcomes (ITMOs). Verified credits from voluntary markets can also be sold globally, subject to local regulations.

You can buy carbon credits through certified brokers, online marketplaces, or blockchain-based platforms like CRB Coin. Choose projects verified by trusted registries, and ensure transparency in pricing and retirement.

Third-party verifiers audit carbon projects to ensure they meet strict criteria for legitimacy, additionality, and measurement accuracy. This adds trust, credibility, and consistency to both compliance and voluntary markets.

In some jurisdictions, purchasing carbon credits—especially for charitable environmental purposes—may be tax-deductible. Companies may also deduct them as part of sustainability or compliance strategies. Consult a tax advisor for details.

Carbon credits compensate for greenhouse gas emissions by funding reduction or removal projects. RECs certify that electricity was generated from renewable sources. Both support sustainability, but they address different environmental goals.

Permanence refers to the long-term effectiveness of a project in preventing or removing emissions. Some projects, like reforestation, face risks like fire or logging. Verification bodies assess permanence and may include buffer pools or insurance.

Some credits, particularly in the voluntary market, may have expiration dates based on certification or project timelines. Expired credits generally cannot be used for offsetting, so buyers should review terms before purchase.

Many carbon credit projects protect or restore ecosystems, enhancing biodiversity. Forest, wetland, and soil carbon projects often provide habitat for wildlife and preserve endangered species alongside reducing emissions.

Retired credits are recorded in public registries with unique serial numbers. You can look up a credit’s status to confirm it has been taken out of circulation and is no longer tradeable. Blockchain platforms add real-time verification.