What is the Voluntary Carbon Market?

The Voluntary Carbon Market (VCM) allows individuals, companies, and organizations to take responsibility for their climate impact by purchasing and retiring carbon credits. Each carbon credit represents the avoidance, reduction, or removal of one metric tonne of carbon dioxide equivalent (tCO₂e) from the atmosphere.

1 tonne of CO₂ is roughly equivalent to:

  • Driving

    A one-way road trip in a typical gas-powered car for 4,000 km (e.g. Montreal to Kelowna)

  • Flying

    Taking a round-trip economy class flight from Vancouver to Toronto

  • Firewood

    Burning about one cubic meter of split logs

Unlike government-regulated compliance markets (such as the EU Emissions Trading System), participation in the VCM is voluntary. This means buyers choose to take action above and beyond legal requirements, helping fund projects that deliver measurable climate benefits and often social and environmental co-benefits as well.

VCM vs. Compliance Markets

  • Compliance Markets are created by government regulation. Companies covered by these systems are legally required to hold allowances or credits equal to their emissions (e.g., EU ETS, California Cap-and-Trade).

  • Voluntary Markets operate outside regulation. Any business or individual can purchase credits to compensate for emissions. The VCM offers more diverse project types (such as renewable energy, forest protection, clean cookstoves, and carbon removals) and provides flexibility in how credits are used and communicated.

In short: compliance markets are mandatory and regulated; voluntary markets are optional but powerful tools for leadership and climate responsibility.

Credits in the VCM are issued and tracked by independent carbon registries, which ensure transparency and prevent double counting. Major global registries include: 

  • Verra (Verified Carbon Standard, VCS) – the largest registry, covering many project types worldwide.
  • Gold Standard – strong focus on sustainable development and social co-benefits.
  • Climate Action Reserve (CAR) – North American focus, with rigorous protocols.

How it Works: Example of Verra

The VCS, run by Verra, is the world’s most widely used carbon crediting program. Here’s how a credit comes to life in their system:

1. Project Design

A developer designs a project (e.g., a reforestation effort) using an approved Verra methodology. They prepare a Project Design Document (PDD) outlining the baseline scenario, expected emission reductions, and monitoring plan.

2. Validation

An independent, accredited auditor (a Verra-approved Validation and Verification Body, or VVB) reviews the project design to ensure it meets the methodology’s requirements.

3. Implementation & Monitoring

The project is implemented on the ground. Emissions reductions or removals are monitored and measured over time.

4. Third-Party Verification

The VVB reviews monitoring reports to confirm the results are real, additional, and measurable.

5. Issuance of Credits

Verra reviews the verification and, if approved, issues Verified Carbon Units (VCUs) into the Verra Registry. Each VCU has a unique serial number.

6. Retirement

When someone purchases and “retires” credits, they are permanently taken out of circulation and recorded publicly in the registry. This ensures transparency and prevents double claiming.

This process ensures every credit sold represents a real, verified tonne of CO₂ reduced or removed.

Reduction vs. Removal Projects

  • Reduction/Avoidance Projects prevent emissions from happening in the first place. Examples: protecting forests from deforestation (REDD+), distributing clean cookstoves to replace open-fire cooking, or renewable energy projects.

  • Removal Projects actively take carbon dioxide out of the atmosphere and store it. Examples: reforestation, soil carbon sequestration, direct air capture, and biochar.

Both are valuable: reductions tackle today’s emissions, while removals help draw down the legacy emissions already in the atmosphere.

Nature-Based vs. Engineered Solutions

Carbon projects can also be grouped by their approach:

  • Nature-Based Solutions (NBS): Projects that harness natural ecosystems to reduce or remove emissions. Examples include forest conservation, reforestation, wetland and mangrove restoration, and regenerative agriculture. They often bring strong co-benefits for biodiversity and communities.

  • Engineered Solutions: Technology-driven projects designed to capture, store, or avoid emissions. Examples include direct air capture (DAC), bioenergy with carbon capture and storage (BECCS), or carbon mineralization. These approaches are crucial for scaling removals in the long term.

A balanced carbon portfolio often includes both nature-based and engineered solutions — delivering immediate climate action while supporting the development of technologies needed for global net zero.

Our Approach