Carbon Credits​

Carbon credits represent one tonne of verified carbon dioxide equivalent (CO₂e) reduced, avoided, or removed. They are issued to projects such as forest conservation, renewable energy, or carbon removal facilities and can be traded or retired to offset emissions within voluntary or compliance systems.

Avoidance credits prevent future emissions by protecting forests, improving energy efficiency, or reducing methane release. Removal credits physically draw CO₂ from the atmosphere through biological (reforestation, soil carbon) or technological (direct air capture, biochar) methods. The market increasingly differentiates between them, with removal credits generally commanding higher prices due to permanence and scarcity.

Prices are shaped by multiple factors including project type, location, verification standard, credit quality, and demand from corporates or compliance buyers. Other drivers include policy developments, supply constraints, and credit attributes such as vintage, co-benefits, or independent quality ratings.

Carbon credits are only effective when they represent genuine, measurable, and permanent reductions. Quality assurance depends on credible standards, robust monitoring, and transparent reporting. The market is moving towards higher integrity through initiatives like the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCPs) and Science Based Targets initiative (SBTi) guidance on credit use.

Fastmarkets models long-term supply, demand, and price outlooks to 2050, using economic fundamentals and policy scenarios. Forecasts cover nature- and technology-based segments, helping users understand how regulatory shifts, cost trajectories, and investor demand will shape market value over time.

Fastmarkets Carbon enables users to benchmark project performance, price long-term offtake agreements, identify credible suppliers, and plan procurement against future price scenarios. The platform supports strategic decision-making for sustainability, investment, and risk management teams across multiple sectors.

Emerging trends include consolidation of verification standards, a shift toward removals and high-integrity projects, integration of carbon credits into supply-chain emissions strategies, and growing regulatory oversight. Demand from aviation (CORSIA), heavy industry, and corporate net-zero commitments is expected to drive sustained market growth through 2030 and beyond.