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What Does the New VCMI Code Mean for Carbon Credit Usage?

The carbon credit/carbon offset market has been a topic of both celebration and contention. Purchasing carbon credits can fund climate benefit projects like reforestation that ultimately help the world mitigate climate change. Yet the lack of global regulatory clarity has coincided with confusion, risk, and sometimes even deception within the voluntary carbon market.

However, new rules and universal best practices are emerging in ways that will:

  • Improve quality within voluntary carbon markets
  • Increase businesses’ confidence in funding climate benefit projects
  • Bring clarity to consumers and other stakeholders around companies’ sustainability credentials

One of the most significant developments in this area has been the June 2023 release of the Voluntary Carbon Markets Integrity Initiative (VCMI) Claims Code of Practice. While not a panacea, this code is an important step forward toward companies being able to reliably use carbon credits in ways that are aligned with scientific best practices.

What Is the VCMI Claims Code of Practice?

Following a provisional release last year, the VCMI’s new Claims of Code of Practice specifies how businesses can make trustworthy claims related to the use of carbon credits in ways that are aligned with the Paris Agreement.

The code includes four steps to make VCMI Claims:

1) Comply with VCMI foundational criteria

To start, businesses that voluntarily comply with the code need to meet foundational criteria, such as setting science-based near-term emissions reduction targets, along with publicly committing to reaching net zero by 2050.

However, reducing emissions and reaching net zero isn’t just a matter of buying carbon credits to offset emissions. While there’s flexibility in terms of which net zero framework to use, companies have to disclose “globally recognized sustainability frameworks or guidance” they’re using, VCMI explains.

Under the Science Based Targets initiative (SBTi), for example, carbon credits don’t count as reductions in terms of reaching near-term targets. SBTi’s Corporate Net-Zero Standard also says that most companies need to cut 90% or more of emissions, and then use permanent carbon removal and storage to offset residual emissions.

2) Choose a VCMI Claim

After meeting foundational criteria, businesses can make one of three VCMI Claims. The three levels correspond to companies purchasing and retiring high-quality carbon credits equal to the following percentages of their remaining emissions for the most recent reporting year:

  • VCMI Platinum: 100% or more
  • VCMI Gold: 60% to < 100%
  • VCMI Silver: 20% to < 60%

Again, these credits are not a substitute for emissions reductions; they must be used “to finance additional climate mitigation” while the company also works toward meeting near-term emissions reduction targets, as VCMI explains.

3) Meet Carbon Credit Usage and Quality Requirements

When using carbon credits to make VCMI Claims, companies also need to follow certain requirements. For one, carbon credits will need to be CCP-approved when available, meaning they meet the standards of the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles.

Companies also have to disclose details about the carbon credits they use, like project IDs and methodologies.

4) Get Third-Party Assurance

Lastly, companies will need to get independent, third-party assurance that they’re meeting the requirements for making VCMI claims. This assurance will need to adhere to the VCMI Monitoring Reporting & Assurance (MRA) Framework, which is set to be published in November 2023.

Carbon Credit Usage Carbon Gas Emissions

What Are the Benefits of Making a VCMI Claim?

By following these rules and making VCMI claims, your business can communicate to stakeholders that you’re using carbon credits and working toward net zero in a way that’s aligned with reaching the Paris Agreement goals.

Rather than stating that your business is carbon neutral solely by way of carbon offsets, for example, you might state that your business is VCMI Platinum, signifying that you’re funding climate benefit projects while working toward science-based emissions reductions.

Taking this approach, rooted in climate science, can help win over doubters who are put off by low-quality carbon credits plaguing the voluntary carbon market.

Bad actors can sour the market, but new standards, like those set by the VCMI and ICVCM, are helping to change stakeholder perceptions while supporting important goals, like trying to limit global temperature increases to 1.5 degrees Celsius.

Part of the debate over carbon credits is that some stakeholders see global climate regulation as the only way forward. If countries and companies were aggressively regulated and taxed in order to meet the Paris Agreement goals, then the carbon credit market as we know it might not be necessary.

The reality, however, is that we’re closing in on a decade passing since the Paris Agreement. The climate picture is arguably bleaker than it was then, as evidenced by the most recent IPCC report. The political will to meet these goals in their entirety just doesn’t seem to be there, so supplements like funding climate benefit projects to meet VCMI Claims should be taken seriously.

What Will Happen to Carbon Markets Going Forward?

The new VCMI rules are an important step for carbon markets, and other organizations are also moving forward with related rules around carbon credits and climate claims.

For example, the U.S. Commodity Futures Trading Commission (CFTC) is cracking down on fraud in carbon markets, such as double counting and fraudulent statements about carbon credit terms.

While that might sound negative for carbon markets at first glance, going after bad actors could help bring confidence back to high-quality carbon credits. Highly regulated securities like publicly traded stocks give investors confidence that they’re getting what they pay for when they buy shares, and ideally the same should happen in carbon markets.

New disclosure standards from the International Sustainability Standards Board (ISSB) should also help. As part of these standards (which regulatory agencies around the world could use as a model for future regulation), companies need to disclose how carbon credits fit into any net greenhouse gas emissions targets.

Carbon Credit Usage Industrial Plant

So, these types of frameworks could bring further confidence to carbon markets, as consumers, investors, and others will be able to more clearly understand how carbon credits fit into a company’s operations.

Rather than assuming a company is green washing when using terms like carbon neutral, for example, they will be able to make more informed judgments.

If a business has not been able to cut emissions significantly but still invests heavily in climate benefit projects, that does not mean the business is inherently sustainable. But stakeholders at least have the clarity to decide whether they want to engage with that business vs. others that might be polluting without also giving back as much to climate mitigation efforts.

Meanwhile, businesses that can both cut emissions and fund climate benefit projects, like those that make VCMI claims, can stand out from competitors that lack the same veracity of their sustainability efforts.

Some of these rules and standards will take time to solidify, but businesses that want to get a head start on measuring, managing, and marketing their carbon footprint strategies can do so through Terrapass and our vetted, high-quality partners.

Brought to you by terrapass.com
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The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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