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Publish: 10 Nov 26Reading Time: 8 Min
The voluntary carbon market is where companies buy and retire carbon credits by choice, not because a law requires them to. A carbon credit is a certificate representing one tonne of CO₂ equivalent reduced, avoided or removed by a project, issued by a crediting programme such as Verra or Gold Standard after independent verification. What credits can support in a claim is now tightly defined: the SBTi does not count them toward reduction targets, and from 27 September 2026 EU consumer law bans claims that a product is climate neutral because of offsetting.
Companies usually come to carbon credits from one of two directions: a commercial team that wants to say "carbon neutral", or a sustainability team that wants to fund action beyond its own value chain. The rules below decide which of those two goals credits can still serve.
A carbon credit is a tradable unit equal to one tonne of CO₂e that a project has kept out of the atmosphere or taken out of it, compared with what would have happened without the project. Each credit goes through the same life cycle:
Two distinctions matter for every later decision. Reduction or avoidance credits come from projects that emit less than a baseline; removal credits come from projects that take CO₂ out of the atmosphere and store it. The SBTi treats them differently, as shown below.
| Compliance market | Voluntary market | |
|---|---|---|
| Why companies take part | A law caps their emissions | Their own choice: targets, claims, contribution |
| Unit traded | Allowances set by the regulator (e.g., in the EU ETS, one allowance = the right to emit 1 tonne of CO₂e) | Carbon credits issued by independent crediting programmes |
| Who sets the rules | Governments (EU ETS covers electricity and heat generation, industrial manufacturing, aviation and, since 2024, maritime transport) | Crediting programmes and integrity bodies such as ICVCM and VCMI |
| What it proves | Legal compliance for the covered installation | Only what the credit's quality and the claim's wording support |
The two worlds are linked by the Paris Agreement. Under Article 6.2, countries can transfer mitigation outcomes (ITMOs) to each other and count them toward their national climate targets (NDCs), with corresponding adjustments so the same tonne is not counted by both countries. Article 6.4 created a UN-supervised crediting mechanism, the Paris Agreement Crediting Mechanism, whose Supervisory Body approved its first credit issuance in February 2026. When a voluntary buyer sees an "Article 6 authorised" or "corresponding adjustment" label, it means the host country has agreed not to count those tonnes toward its own target.
For how compliance carbon pricing reaches exporters, see our posts on CBAM vs EU ETS and on carbon prices paid in third countries.
Two independent initiatives now set the reference points: one for the credit, one for the claim.
ICVCM Core Carbon Principles (supply side). The Integrity Council for the Voluntary Carbon Market (ICVCM) sets 10 Core Carbon Principles in three groups:
A credit can carry the CCP label only if two gates are passed: the crediting programme must be assessed as CCP-Eligible, and the credit must come from a category of credits (methodology type) that the ICVCM has approved.
VCMI Claims Code of Practice (demand side). The Voluntary Carbon Markets Integrity Initiative (VCMI) sets out when a company may make a claim with credits. Before any claim, it must meet foundational criteria, including a public annual emissions inventory and science-aligned near-term targets, and show progress against them. Claims are then tiered Silver, Gold or Platinum depending on how much of the company's remaining emissions it covers with retired high-quality credits, which VCMI links to the ICVCM principles. Credits used for these claims do not count toward the company's own reduction targets.
This is where most rules changed. Three points apply in 2026:
Carbon neutrality vs net zero. "Carbon neutral" usually describes a company or product whose remaining emissions over a period are compensated with credits. "Net zero" in the SBTi sense means cutting value chain emissions to a residual level on a science-based pathway and neutralising only that residual with removals. The two are not interchangeable, and credits cannot turn the first into the second.
Buyers who start from the claim, and then choose the credit, avoid buying credits they cannot use. The questions above are the same ones we answer as project developers: our own projects have avoided 250,000+ tonnes of CO₂ (Safe Water Uganda under Gold Standard and Re&Up under Verra) and 40,000 tonnes of plastic under Verra's Plastic Waste Reduction Standard (PWRS). These are past results, not a commitment for future projects. See how we develop emission reduction projects and plastic credit projects, and our glossary for key terms.
A carbon credit is a certificate that represents one tonne of CO₂ equivalent reduced, avoided or removed by a project, verified by an independent body and issued with a serial number in a registry. It is used for a claim only once, by retiring it.
Not like a compliance market. Integrity is set by crediting programmes and by initiatives such as ICVCM and VCMI, while claims made to consumers fall under consumer protection law, including the EU's Directive 2024/825 from 27 September 2026.
The 2024/825 ban targets product-level claims based on offsetting. According to the European Commission's FAQ, company-level offsetting claims are not covered by that specific ban, but they remain subject to the directive's other rules, and the FAQ treats a generic "carbon neutral" claim as banned unless the trader can show recognised excellent environmental performance. The wording and evidence need legal review in each market.
No. Credits are not counted as emission reductions toward SBTi near-term targets. Under the Net-Zero Standard V2.0, carbon removals are used to neutralise residual emissions at the net-zero year, and voluntary contributions beyond the value chain are reported separately.
It is an accounting entry under Article 6 of the Paris Agreement: when a country authorises the transfer of mitigation outcomes, it adjusts its own emissions balance so that the same tonne is not counted toward two countries' targets.
Book a carbon credit claims review: we check your planned claim and credit portfolio against ICVCM, VCMI, SBTi and Directive 2024/825 and return a list of usable credits and claim wording.
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