How to choose certified carbon credits

What to consider beyond certification

Choosing certified carbon credits may seem simple: identify a project, verify the standard, and compare the price per metric ton of CO₂ equivalent.

In reality, not all carbon credits are the same.

Behind every credit lies a project, with its own methodology, location, baseline scenario, and results that can vary significantly in terms of climate, environmental, and social impact.

Certification is a fundamental starting point. But choosing high-quality carbon credits means looking beyond the name of the standard and understanding what actually generated that metric ton of CO₂, how it was quantified, and what impact it has over time.

Before choosing a carbon credit, define your objective

The choice should not start with the project, but with the company’s own climate strategy.

What is the organisation’s objective? What role will carbon credits play within its climate strategy? What types of projects are most consistent with the company’s values, activities and stakeholders?

A company may, for example, prioritise nature-based solutions that contribute to the conservation or restoration of ecosystems. Another might seek out projects with a strong social component. Yet another might choose to combine different approaches within the same portfolio.

Geography can also play a key role: some organisations may wish to support projects close to their operations or supply chain, whilst others may prioritise areas that are particularly vulnerable to climate change.

Before building a carbon credits portfolio, it is therefore essential to define what type of impact the company wants to generate and why.

Understand the type of carbon credit you are purchasing

A carbon credit represents one metric tonne of CO₂ equivalent that has been reduced, avoided or removed from the atmosphere. However, the way in which this is achieved can vary considerably.

An important initial distinction is that between carbon removals and emission reductions/avoidance.

Carbon removals

Carbon removals result from activities that remove CO₂ already present in the atmosphere. An ARR (Afforestation, Reforestation and Revegetation) project, for example, can generate removals through the growth of vegetation and the consequent absorption and storage of CO₂.

Progetto di riforestazione Fazenda Boa Vista, Brasile

Emission reductions or avoidance

Emission reductions/avoidance, on the other hand, result from activities that reduce or prevent emissions compared to a baseline scenario. A REDD+ project, for example, can generate credits by avoiding emissions associated with deforestation or forest degradation that would have occurred in the absence of the project.

REDD+ Forest Conservation Project in Selva de Urundel, Argentina

There are also many other types of emission reductions/avoidance projects: improved forest management, carbon farming, clean water, cookstoves, renewable energy, biochar and removal technologies such as DACCS or BECCS.

One type is not automatically better than another. Different technologies and methodologies address different needs and have different characteristics, costs, risks and potential benefits.

The key question, therefore, is: does the credit result from emissions removal or reduction, and what activity generated it?

Verify the certification standard and the integrity of the credit

One of the first things to check before purchasing carbon credits is whether the project follows a recognised international standard, with defined requirements for the quantification, monitoring, reporting and verification of its impact.

In the voluntary carbon market, recognised standards and certification programmes serve as a key benchmark for ensuring transparency, traceability and rigour in the quantification of climate impact. Among the main frameworks used internationally are, for example, Verra’s Verified Carbon Standard (VCS), the Gold Standard and the International Carbon Registry (ICR).

These frameworks set out requirements and methodologies for project development and the quantification of the reductions or removals generated, incorporating processes for monitoring, validation and independent verification.

Certification is therefore a key first step in selecting a carbon credit. However, it is not sufficient on its own to determine their quality.

Two certified projects may, in fact, have very different characteristics and risk profiles. This is why it is important to look beyond the name of the standard and also assess the methodology applied, additionality, the robustness of the quantification, permanence (where relevant) and the specific characteristics of the project.

Would you like to learn more about how carbon credit standards, registries and certification processes work? On September 9th, we’ll explore these topics together with Carbon Credits Consulting in a webinar dedicated to the Italian carbon credit market.

Additionality: would the impact have occurred anyway?

A project must demonstrate, in accordance with the applicable criteria and methodology, that the climate benefit attributed to the intervention is additional to what would have occurred in its absence.

Let’s consider a reforestation project. If the same area would have been reforested anyway, regardless of the project, attributing all those carbon removals to the project could lead to an overestimation of its impact.

Additionality therefore serves to answer a fundamental question: has the project generated a climate benefit that would not have occurred without it?

Permanence: how robust is the impact over time?

For certain types of projects, particularly nature-based solutions, we must also consider what might happen after the carbon has been removed or protected.

A forest can store carbon, but fires, droughts, diseases, extreme weather events or changes in land management can cause it to be released in the future.

This is known as the risk of reversal.

Permanence therefore concerns the ability to maintain the climate benefit generated by the project over time. The standards set out specific requirements and mechanisms to identify, assess and manage these risks.

In the VCS, for example, AFOLU (Agriculture, Forestry and Other Land Use) projects are subject to specific requirements to address the risk of non-permanence.

For those purchasing carbon credits, this means looking beyond the question ‘how many tonnes have been generated?’ and also asking ‘how robust is this result over time?’

Look beyond carbon

Climate benefits remain fundamental, but a project’s impact can extend beyond a tonne of CO₂ equivalent.

A forestry project can contribute to biodiversity conservation, habitat restoration or the rehabilitation of degraded land. A community-based project can help improve access to water, promote health or create economic opportunities for local communities. Wetland restoration, on the other hand, can help to restore ecosystems that are particularly important for biodiversity and water regulation.

These are known as co-benefits: environmental or social outcomes that accompany the project’s primary climate impact. Choosing certified carbon credits ultimately means understanding what lies behind each credit.

How does all this translate into a real-world project? During our September 9th webinar in Italian, we will showcase two concrete examples of carbon projects being developed in wetlands in Italy: Valle Noghera and Valle A.M.A.

Diversifying the portfolio

Choosing high-quality carbon credits does not necessarily mean identifying a single ‘perfect’ project.

Different project types, methodologies and geographical areas have different characteristics and risk profiles. For this reason, an organisation may choose to build a diversified portfolio of carbon credits.

For example, a portfolio may combine emission reductions and carbon removals, or nature-based and community-based projects, spreading the investment across different methodologies and regions. Diversification can help build a strategy that is more consistent with a company’s values and objectives and spread exposure across different types of solutions.

Key Takeaways:

• Start with climate objectives: the choice of carbon credits should be consistent with a company’s strategy, priorities and the type of impact it intends to generate.
• Understand the typology of credit: distinguish between carbon removals and emission reductions/avoidance, and understand the activities through which the climate benefit is generated.
• Assess standards and climate integrity: certification against a recognised standard is a fundamental starting point. It is equally important to consider additionality, quantification, monitoring and verification, together with project-specific risks such as permanence, reversal or leakage, where applicable.
• Consider the impact beyond carbon: biodiversity, ecosystem restoration, territorial resilience and benefits for communities can contribute to the overall value of the project, without replacing the necessary climate integrity.
• Consider portfolio diversification: combining different project types, methodologies and geographical areas can help build a portfolio more aligned with a company’s objectives and diversify exposure across different climate solutions.
• Look beyond the price per tonne: making an informed decision requires assessing how the credit was generated, the quality of the project and which type of climate action you are choosing to support.

Would you like to find out more about the carbon credits market in Italy? 

Join the webinar on September 9th with Green Future Project and Carbon Credits Consulting.

Would you like to develop a climate strategy that includes carbon credits selected to match your company’s objectives and priorities? Discover Green Future Project’s climate solutions.

This article was produced in collaboration with Carbon Credits Consulting.