What is a carbon credit?
A carbon credit is a transferable unit associated with one metric tonne of carbon dioxide equivalent reduced or removed under a defined carbon-crediting programme.
One tonne, quantified under stated rules
A credit is not simply an estimate or a donation receipt. It is issued under a carbon-crediting programme after the underlying project activity and quantified climate outcome have passed the applicable processes.
For example, the Verified Carbon Standard describes each Verified Carbon Unit as representing one tonne of carbon dioxide equivalent reduced or removed by a project. Other programmes use their own unit names and rules.
The unit begins with work on the ground
Credits are connected to defined project activities. In a safe water project, for example, reliable water access can reduce the need to boil unsafe water using wood or charcoal. The methodology and monitoring evidence determine how that change is quantified.
How safe water credits work →What the unit does and does not tell you
Is every carbon credit the same?
No. Credits can differ by programme, methodology, project type, geography, vintage, safeguards, labels, evidence and intended market use.
What is a vintage?
The vintage identifies the period in which the underlying reduction or removal occurred. It is different from the date a credit was issued or purchased.
What does retirement mean?
Retirement records that a credit has been used for a stated purpose and removes that unit from further transfer in the registry.
Does a credit automatically prove a corporate claim?
No. The credit evidence and the claim made by a buyer are separate questions. Organisations should consider applicable guidance, reporting rules and the wording of any public claim.
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CO2balance can help with verified credit purchases, carbon project development, project investment and carbon management.