We’re running the most dangerous experiment in history right now, which is to see how much carbon dioxide the atmosphere… can handle before there is an environmental catastrophe.
Last month we launched our Carbon Credit AI, and invited you to submit your questions. Now that this service has been running for a few weeks, it’s becoming increasingly evident that one of the questions you’re most curious about is who issues carbon credits and how, so we decided to write this blog post and give some insights. Hopefully you’ll find this insightful…
What is a Carbon Credit?
Climate change is one of the greatest challenges facing our planet today. The burning of fossil fuels and other human activities have led to an increase in greenhouse gas emissions, which in turn has caused global temperatures to rise. This has resulted in more frequent and severe weather events, rising sea levels, and other detrimental effects on the environment.
Carbon credits represent a unit of measurement for greenhouse gas emissions reductions or removals. Carbon credits enable entities to offset their own emissions by investing in ventures that reduce or remove greenhouse gasses from the atmosphere. This not only helps to reduce overall emissions but also promotes sustainable development and the transition to a low-carbon economy.
Carbon credits support climate change mitigation by providing a financial framework of incentives that governs how companies and organizations match their climate change commitments and reduce their emissions.
When a company or organization reduces its emissions below a certain threshold, it can earn carbon credits. These credits can then be sold or traded on carbon markets.
Understanding the Carbon Market
The carbon market is a system that enables the buying and selling of carbon credits. It operates on the principle of supply and demand, with some companies and organizations seeking to buy carbon credits to offset their emissions, while others seek to sell their excess credits. The carbon market can be divided into two main types:
- Compliance markets
- Voluntary markets.
Trading mechanisms in these carbon markets vary depending on the type of market and the specific rules and regulations in place:
Carbon Credit Compliance Markets
Compliance markets are established by governments and are mandatory for certain industries or sectors. These markets use carbon credits as a means of compliance to ensure that companies meet mandatory targets. Carbon credits in these markets are typically allocated or auctioned off by governments, and companies can buy or sell these credits on a secondary market.
Examples of compliance markets are:
- The European Union Emissions Trading System (EU ETS)
- The California Cap-and-Trade Program.
Carbon Credit Voluntary Markets
Voluntary markets are not regulated by governments and are driven by companies and individuals who voluntarily choose to offset their emissions. Carbon credits for these markets are often generated through projects that reduce or remove greenhouse gasses, and these credits can be bought directly from project developers or through specialized platforms. These markets provide an opportunity for companies to take responsibility for their carbon footprint and demonstrate their commitment to sustainability.
Examples of voluntary markets are:
- The Verified Carbon Standard (VCS).
- The Gold Standard.
How are Carbon Credits Issued?
Carbon credits can be issued for projects that can be proven to reduce carbon emissions or absorb carbon from the environment. These may include, but are not limited to:
- Renewable energy initiatives.
- Energy efficiency programs.
- Afforestation & reforestation projects.
- Waste management schemes.
These projects not only help to reduce emissions but also contribute to sustainable development and job creation. By issuing carbon credits for these projects, governments, international organizations and private enterprises can support their implementation and ensure they are financially viable. Let’s take a closer look at how each of the above projects are leveraged to create carbon credits:
Issuing Carbon Credits from Wind Farms
By generating clean, renewable energy, wind farms help to reduce the demand for fossil fuels and the associated greenhouse gas emissions. The emission reductions achieved by the wind farm can be quantified and converted into carbon credits, which can then be sold on the carbon market. Carbon Credit Capital offers such credits from our renewable energy partners in India.
Issuing Carbon Credits from Afforestation
These projects help to absorb carbon dioxide from the atmosphere and store it in biomass by planting trees. The amount of carbon dioxide absorbed by the trees can be quantified and converted into carbon credits. These credits can then be sold to companies or individuals looking to offset their emissions.
Carbon Credit Capital offers such credits from our forest conservation in Mongolia.
Issuing Carbon Credits from Waste Management
Waste management schemes create carbon credits by implementing methods to reduce carbon dioxide and methane emissions associated with waste, typically through activities such as food rescue, plastic recycling, and landfill gas management. Public and private waste management organizations can generate carbon credits that can be traded in carbon markets. This not only helps in environmental conservation but also provides economic benefits through the sale of these credits.
Carbon Offset Projects’ Auxiliary and Ancillary Benefits
Carbon offset projects provide multiple benefits beyond emission reductions. They often contribute to sustainable development, create jobs, and support local communities. For example, a renewable energy project can provide clean electricity to remote areas that previously relied on fossil fuels. A reforestation project can create employment opportunities for local communities and protect biodiversity.
By issuing carbon credits for these projects, the carbon market provides a financial incentive for their implementation. This helps to attract investment and support the growth of sustainable practices. Carbon offset projects also contribute to the transition to a low-carbon economy by promoting renewable energy, sustainable agriculture, and other climate-friendly activities.
How are Carbon Credits Certified?
The certification process is an essential step in issuing carbon credits and ensuring their credibility and integrity. Certification bodies are responsible for verifying that emission reduction projects meet specific criteria and standards before issuing carbon credits. This process involves a thorough assessment of the project’s methodology, monitoring systems, and emission reduction calculations.
The certification process begins with project developers submitting a project design document (PDD) to the certification body. The PDD outlines the project’s objectives, methodologies, and expected emission reductions. The certification body reviews the PDD and conducts an initial assessment to determine if the project meets the necessary requirements.
If the project is deemed eligible, it moves on to the validation stage. During validation, the certification body conducts an on-site visit to verify that the project is being implemented according to the approved methodology. This includes reviewing monitoring systems, data collection methods, and emission reduction calculations.
Once validation is complete, the certification body issues a validation report and registers the project with a unique identification number. The project can then begin generating carbon credits based on its verified emission reductions. These credits are typically issued in the form of tradable certificates, which can be bought and sold on the carbon market.
Examples of certification bodies include the aforementioned VCS and Gold Standard, as well as the Climate Action Reserve. These organizations have established rigorous standards and guidelines for carbon credit projects and provide independent verification and certification services. By certifying carbon credits, they ensure projects meet the necessary criteria and contribute to real emission reductions.
Carbon Credits Verification
Verification is another crucial step in issuing carbon credits and ensuring their credibility and integrity. Verification bodies such as Det Norske Veritas (DNV), SGS, and TÜV SÜD, have extensive experience in verifying emission reduction projects and ensuring compliance with international standards. By providing independent verification services, they help to build trust in the carbon market and ensure the integrity of carbon credits.
Carbon Credits Verification process
- Verification begins with project developers submitting a verification report including detailed information on the project’s emission reduction calculations, monitoring systems, and data collection methods to the verification body.
- The verification body then reviews the report and conducts an independent assessment to determine if the project meets the necessary requirements.
- Verification bodies may request additional information or conduct on-site visits to verify a project’s data’s accuracy. This includes reviewing monitoring equipment, data collection procedures, and emission reduction calculations. The verification body also checks for any potential errors or inconsistencies in the project’s documentation.
- Once the assessment is complete, the verification body issues a verification statement that confirms the accuracy of the project’s emission reduction calculations. This statement is then used by the certification body to issue carbon credits for the project. The verification body may also provide recommendations for improving monitoring systems or data collection methods to ensure ongoing compliance with standards.
Carbon Credits – Government’s Role
Governments play a crucial role in issuing carbon credits and driving emission reductions. They establish policies and regulations that set emission reduction targets for industries and sectors, and they oversee the allocation and trading of carbon credits. Government agencies are responsible for issuing and monitoring carbon credits, ensuring that they are valid and meet the necessary criteria.
Government policies on carbon credits vary from country to country, but they generally aim to incentivize emission reductions and promote sustainable practices. These policies can include cap-and-trade systems, carbon taxes, renewable energy incentives, and other measures that encourage companies to reduce their emissions. By issuing carbon credits, governments provide a tangible incentive for companies to invest in emission reduction projects.
Government agencies responsible for issuing carbon credits also vary depending on the country. In some cases, it may be a dedicated agency or department within the government that is responsible for overseeing the carbon market. In other cases, it may be a regulatory body or an environmental agency that is tasked with monitoring emissions and issuing carbon credits.
Carbon Credits – International Organizations’ Role
International organizations play a significant role in issuing carbon credits and reducing emissions on a global scale. These organizations work to establish standards and guidelines for carbon credit projects, provide technical assistance to project developers, and facilitate the trading of carbon credits.
One example of an international organization involved in carbon credits is the United Nations Framework Convention on Climate Change (UNFCCC), which oversees the Clean Development Mechanism (CDM), which allows developing countries to earn carbon credits by implementing emission reduction projects. The CDM has been instrumental in promoting sustainable development and technology transfer in developing countries.
Another example is the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which aims to offset the growth in international aviation emissions by requiring airlines to purchase carbon credits from approved projects. This initiative is expected to play a significant role in reducing emissions from the aviation sector.
Another important activity by international organizations is the funding and support for carbon credit projects. For example, the World Bank’s Forest Carbon Partnership Facility (FCPF) provides financial incentives for countries to reduce emissions from deforestation and forest degradation. By issuing carbon credits for these projects, international organizations can help to mobilize private sector investment and promote sustainable development.
Carbon Credits – Private Enterprises’ Role
As mentioned earlier, private entities and companies are key players in the carbon market, both as buyers and sellers of carbon credits.
Private Enterprise Carbon Credit Buyers
Many companies choose to meet compliance requirements, sustainability goals, or corporate social responsibility commitments by electing to offset their emissions through the purchase of carbon credits from projects that reduce or remove greenhouse gasses.
Private Enterprise Carbon Credit Sellers
There are also private companies that specialize in issuing carbon credits. The financial model on which these companies operate involves the development and implementation of emission reduction projects similar to the ones listed above through which they earn carbon credits for the attributable emissions reductions. These credits are then sold at a profit on carbon markets.
Examples of private companies issuing carbon credits may include:
- Renewable energy developers.
- Waste management companies.
- Forestry organizations.
Not only do these companies prove the financial incentive for others to make similar investments, and contribute to the transition to a low-carbon economy, but they also play a crucial role in promoting sustainable practices and educating for emission reductions.
Private Enterprises’ Role in Education
An important aspect of private companies’ involvement with carbon credits is the promotion of carbon credit projects through marketing and communication efforts – Often companies choose to highlight their carbon offset initiatives for branding purposes, as part of their sustainability strategies, or their corporate social responsibility efforts. These activities help raise awareness and encourage others to follow suit. By showcasing the benefits of carbon credits, private companies can inspire others to join the fight against climate change.
Conclusion
Carbon credits are a crucial tool in mitigating climate change and promoting sustainable development. They provide a financial incentive for companies and organizations to reduce their emissions and invest in emission reduction projects. Governments, international organizations, and private companies all play a role in the issuance, certification and validation of carbon credits and thereby driving emission reductions. Certification and verification processes ensure the credibility and integrity of carbon credits, while transparency promotes trust in the carbon market. The future of carbon credits holds great potential for achieving global climate goals and transitioning to a low-carbon economy.
If you’re interested in learning more about carbon credits and their impact on the environment, feel free to reach out to us – We’re always happy to help!
Google announced a major new project: it will support a U.S. power plant outfitted with carbon-capture and storage (CCS) technology. The plant, owned by Broadwing Energy in Decatur, Illinois, will capture about 90% of its CO₂ emissions. The tech giant agreed to buy most of the electricity the plant produces.
By backing this plant, Google aims to help build a reliable, low-carbon power source for its data centers in the U.S. Midwest. It also hopes to speed up the use of CCS technology globally.
The Science of Trapping Carbon: How CCS Works
CCS stands for carbon capture and storage. It involves three main steps:
- Capture: Pulling CO₂ from a power plant or factory.
- Transport: Moving the CO₂, often via pipelines.
- Store: Injecting the CO₂ deep underground where it can’t escape.
This technology is especially important for power plants that burn natural gas or coal. It is also key for factories in heavy industries, like steel and cement, which produce large emissions.
Global experts such as the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) say CCS will play a major role in reaching climate goals.
Google’s deal highlights this role. By linking a power plant deal to its own data center needs, the company is showing how big tech can strengthen the clean energy transition.
Inside Google’s Illinois CCS Project
The Illinois plant will be a natural 5gas power facility built by Broadwing Energy. It will capture up to 90% of the CO₂ it produces. Google will buy the bulk of its electricity output.
The plant is sized at more than 400 megawatts (MW). It will include advanced equipment and a large carbon-capture unit. The deal was announced by Google and infrastructure partner I Squared Capital (through its affiliate Low Carbon Infrastructure).
Google said the project will feed power to its data centers in the region, help reduce emissions, and make clean “firm power” (power available around the clock) more affordable. This is important because many renewable sources like wind and solar have variable output.
Google stated:
“Today we’re excited to announce a first-of-its-kind corporate agreement to support a gas power plant with CCS. Broadwing Energy, located in Decatur, Illinois, will capture and permanently store approximately 90% of its CO2 emissions. We hope it will accelerate the path for CCS technology to become more accessible and affordable globally, helping to increase generating capacity while enabling emission reductions.”
How Big is the CCS Market?
The CCS market has grown rapidly. One estimate values it at $8.6 billion in 2024, with a projected annual rate of 16% through 2034. At that pace, the market could reach $51.5 billion by 2034.
Another estimate places the market size in 2024 at $3.68 billion, with growth to $5.61 billion by 2030. The power generation sector is a major part of the market. One report says 37% of the market was from power generation in 2024.
For data centers and tech companies like Google, CCS offers reliable low-carbon power. Given that global data center emissions may reach 2.5 billion tons of CO₂ through 2030, major tech firms are under pressure to decarbonize.
Experts also project that global CCS capacity will quadruple, reaching around 430 million tonnes of CO₂ per year from today’s 50 million tonnes. Investments of about $80 billion are expected over the next five years. North America and Europe currently lead, holding roughly 80% of growth projects, while China and other regions also scale up.
CCS currently addresses only 6% of the emissions needed for net-zero by mid-century. Experts still see it as key for hard-to-decarbonize industries like cement, steel, and hydrogen production.
Breaking New Ground in Clean Firm Power
This is the first time a major tech company has agreed to buy electricity from a power plant using CCS at this commercial scale in the U.S.
The deal brings several important benefits:
- Google secures “firm” power for its data centers, reducing risks from intermittent renewable supply.
- CCS gives a path to cut emissions from fossil fuel plants rather than shutting them down entirely.
- It creates a business model for future CCS deals, making the technology more accessible and scalable.
For Google, the deal advances its goal of running on clean energy and especially 24/7 carbon-free power by 2030. For the broader industry, it sends a signal that large corporations support CCS and are willing to back it financially.
Hurdles Ahead for Carbon Capture
Despite the promise, CCS still faces hurdles. The upfront cost is high, and many projects require government incentives or strong contracts to make economic sense.
Another challenge is scale. According to a 2024 study, CCS capacity by 2030 may reach only 0.07–0.37 gigatonnes (Gt) CO₂ per year, which is just a small part of what’s needed to meet climate goals.
For Google’s project and others like it to succeed, they will need strong regulation, clear carbon pricing, and reliable storage sites. Also, transparency and long-term monitoring are critical to ensure the CO₂ stays underground.
The Illinois plant is a start. If it runs successfully, it could spawn many more projects in power generation and industry. Corporations, utilities, and governments may replicate the model.
The Big Picture: From Data Centers to Decarbonization
Tech companies are building ever-larger data centers to fuel artificial intelligence, cloud computing, and global connectivity. This drives huge electricity demand. Google’s CCS deal shows one way to manage that demand while cutting carbon.
CCS combined with clean power can help sectors that cannot easily switch to renewables. Power plants that run on natural gas or industries like cement and steel may use CCS to reduce emissions.
For Google, the new deal helps it reach its sustainability targets, supports its data-center operations, and sets an example for other firms. The chart below shows the company’s emission reduction progress. For the climate, it offers a template for building low-carbon power systems at scale.
Final Thoughts: A Pivotal Moment for Clean Power
Google’s agreement signals a shift: clean, firm power is becoming a business reality, not just a promise. By backing a CCS-enabled gas power plant, Google is aligning business needs with carbon reduction goals.
The global CCS market is expanding fast. Estimates show billions of dollars flowing into the technology. But scaling remains challenging — cost, policy, and geology all play a role.
If the Illinois plant succeeds, it may influence how corporations, utilities, and governments design power systems in the future. It could help unlock CCS as one of the tools in the broader energy transition toolbox.
The post Google Invests in First Carbon Capture to Power AI and Cut Emissions appeared first on Carbon Credits.
Bitcoin mining stocks jumped sharply this week after several big companies said they will expand into artificial intelligence (AI). Many miners now plan to use their computers and power systems for AI data centers, not just for Bitcoin.
CleanSpark led the rally after announcing its move into AI. The shift shows how fast the mining industry is changing as companies look for new ways to earn money.
CleanSpark Ignites the Rally
Las Vegas–based CleanSpark saw its shares rise as much as 13% on October 21, 2025. The company said it will build and run data centers made for AI computing, in addition to mining Bitcoin.
CleanSpark also hired Jeffrey Thomas, a veteran with more than 40 years of experience, as Senior Vice President of AI Data Centers. Thomas once led Saudi Arabia’s multi-billion-dollar AI data center program. He has helped create about $12 billion in shareholder value across 19 companies.
Thomas remarked:
“CleanSpark is at a pivotal moment in its journey. Together, we have a tremendous opportunity to deliver exceptional solutions for our customers while creating long-term value for shareholders and positioning CleanSpark at the center of the AI and intelligent computing revolution.”
The company already secured land and extra power in College Park, Georgia, near Atlanta, to build its first AI sites. It is also studying more possible locations in other U.S. states.
The news came as Bitcoin prices climbed back above $110,000, recovering from earlier drops when the price fell from highs above $126,000 in early October.
- SEE MORE: Bitcoin Price Hits All-Time High Above $126K: ETFs, Market Drivers, and the Future of Digital Gold
More Miners Follow the Same Path
CleanSpark is not alone. Many mining companies are now trying to grow beyond Bitcoin. The reason is clear: mining rewards have fallen, and energy costs are rising.
After Bitcoin’s 2024 halving, rewards for miners dropped from 6.25 BTC to 3.125 BTC. This made mining less profitable, pushing companies to look for other income sources.
Companies like Marathon Digital Holdings, Riot Platforms, Canaan, Core Scientific, Bitdeer Technologies, Hut 8, Cipher Mining, and TeraWulf have all announced similar plans. Their stocks also rose:
- Marathon Digital gained 7.97% to $21.13.
- Riot Platforms jumped 11.21% to $22.28.
- Canaan, a hardware maker in China, surged about 28%.
Publicly traded Bitcoin miners raised more than $4.6 billion through loans and convertible notes in late 2024 and early 2025 to fund their AI projects.
The CoinShares Bitcoin Mining ETF, which tracks the sector, has soared 160% this year. Investors are clearly excited about the shift toward AI.
Why Miners Are Betting on AI
The move to AI computing makes sense for miners. They already own powerful hardware, data centers, and energy contracts. These can easily be used for AI instead of crypto.
AI systems need large amounts of electricity and fast processors to train and run models. Bitcoin miners already have this setup. By shifting to AI workloads, they can earn money even when Bitcoin prices are low.
According to the International Energy Agency (IEA), global demand for AI data centers could reach over 1,000 terawatt-hours per year by 2030 — about the same as all of Japan’s electricity use today.
The global AI infrastructure market could be worth $1.3 trillion by 2032, growing around 25% each year. That makes it one of the fastest-growing industries in the world.
For miners, the message is simple: if Bitcoin mining is less profitable, AI computing can fill the gap and create steady revenue.
From Mining Rigs to AI Powerhouses
AI computing and Bitcoin mining use similar technology. Both rely on high-performance processors to handle huge amounts of data.
Miners already operate powerful chips, cooling systems, and strong electricity connections. They can reuse all these to run AI and high-performance computing (HPC) jobs.
CleanSpark plans to build hybrid data centers — some for Bitcoin, others for AI workloads. Likewise, Core Scientific said it will set aside part of its 1.3-gigawatt capacity for AI clients. Other companies are exploring similar plans.
This model could change the industry. Instead of just mining coins, these firms could become “compute providers” — selling power and computing to AI companies, research labs, and cloud platforms.
Investors See Opportunity Beyond Bitcoin
Investors like this new direction. It means miners no longer depend only on Bitcoin’s price swings. They can earn a steady income from long-term contracts with AI firms.
The IEA says global electricity use from data centers could double by 2030, largely because of AI. The U.S. has about 40% of the world’s data center capacity, but new projects face delays due to power and permitting issues.
Bitcoin miners already have access to large power sources. This gives them an edge when building new AI sites. They can repurpose their existing energy deals for AI computing, cutting startup time and costs.
Still, experts warn that running AI data centers is not easy. It needs new software, specialized equipment, and skilled workers. It also takes longer to make a profit compared to Bitcoin mining, which can adjust quickly to market prices.
Energy Use and the ESG Equation
Energy use remains a key concern for both AI and Bitcoin mining. The Cambridge Centre for Alternative Finance estimates Bitcoin mining uses about 120 terawatt-hours of electricity each year, roughly equal to Argentina’s total use.
Mining companies are trying to improve their environmental impact. CleanSpark says it sources most of its electricity from renewable or low-carbon energy. It plans to apply the same approach to its AI expansion.
Switching to AI could also make mining more efficient. Many AI centers use advanced cooling systems and can run on renewable energy more easily than older mining farms.
This could help miners meet environmental, social, and governance (ESG) goals while supporting the growth of clean digital infrastructure.
A New Era of Digital Infrastructure
The rise of AI has opened a new chapter for Bitcoin miners. What began as a niche focused on crypto now looks more like a digital infrastructure industry that powers AI, data analytics, and renewable energy systems.
If the transition succeeds, mining companies could become important players in the global computing market. They would supply power and servers for everything from AI model training to smart grid management.
For investors, this change offers both opportunity and risk. It provides exposure to two fast-growing industries — crypto and AI — but also depends on how well miners adapt.
Analysts say the key will be execution. Building AI centers takes time and money, and not all miners will succeed. But those who manage the shift well could become leaders in clean, high-tech energy and computing. They will shape the next phase of digital infrastructure — one that connects blockchain, AI, and sustainable power.
The post Bitcoin Mining Stocks Hit New Highs on AI Pivot with CleanSpark Leading the Pack appeared first on Carbon Credits.
Carbon Footprint
UN Endorses First Article 6.4 Carbon Credit Methodology, Unlocking Billions for Global Carbon Markets
The United Nations has taken a major step in global carbon markets. A UN panel has approved the first methodology under Article 6.4 of the Paris Agreement. This marks the start of a new era in international carbon trading. The system will help countries and companies offset emissions under one global standard.
A New Chapter for Global Carbon Markets
Article 6.4, also known as the Paris Agreement Crediting Mechanism (PACM), aims to build a global market where countries can trade verified emission reductions. It replaces the old Clean Development Mechanism (CDM) from the Kyoto Protocol, which registered more than 7,800 projects between 2006 and 2020. This new system makes sure carbon credits come from real and measurable emission cuts.
The UNFCCC Supervisory Body met in mid-October 2025 to review new market methods. Their approval of the first one marks a major step for climate finance projects around the world.
The first approved method supports renewable energy projects, especially small wind and solar developments in developing countries. These projects are key to reducing emissions and expanding access to clean energy.
The International Energy Agency (IEA) says renewable energy in developing economies must triple by 2030 to reach global net-zero goals.
What Article 6.4 Means
Article 6.4 is part of the Paris Agreement’s cooperation plan. It lets one country fund emission reduction projects in another country and count those reductions toward its own climate goals. The system aims to:
- Stop double-counting of emission reductions.
- Improve transparency through strict monitoring.
- Build trust between developing and developed nations.
This system will help countries meet their Nationally Determined Contributions (NDCs) faster. The World Bank estimates that NDC cooperation could cut up to 5 billion tonnes of emissions annually by 2030. It could also unlock around $250 billion in climate finance each year, giving investors a clear way to support credible carbon projects.
At COP29 in Baku, world governments agreed on a new global climate finance goal for after 2025. They pledged to scale up funding for developing countries to at least $1.3 trillion per year by 2035 from public and private sources.
Developed nations will lead by mobilizing $300 billion annually, expanding on the earlier $100 billion target. The agreement allows developing countries to count their own contributions voluntarily. It also includes all multilateral development bank (MDB) climate finance. This aligns with expert estimates that developing nations need $3.1–3.5 trillion yearly by 2035 to meet climate investment and adaptation goals.
From Rules to Real Markets
Until now, discussions around Article 6.4 have focused mainly on rules and design. The panel’s decision moves the system from theory to action. It shows that global carbon trading is ready to begin.
Experts predict global demand for carbon credits could reach 2 billion tonnes by 2030, and as high as 13 billion tonnes by 2050. The UN wants to make sure only verified, high-quality credits enter this fast-growing market.
Developing nations stand to benefit the most. Many have strong potential for renewable energy, reforestation, and methane reduction projects. Africa alone could supply up to 30% of the world’s high-quality carbon credits by 2030. These projects could create billions in new revenue for clean growth.
The new methodology allows these projects to earn credits that can be sold internationally, helping communities build clean energy and adapt to climate change.
Ensuring Integrity and Transparency
Old carbon markets faced criticism for weak integrity and unclear reporting. Article 6.4 aims to fix that. Every project must pass strict checks by independent auditors before earning credits. Credits will only be issued if real emission cuts are proven.
The Supervisory Body’s framework includes steps for:
- Setting clear baselines for emissions.
- Measuring reductions over time.
- Monitoring performance using standard tools.
This process will help rebuild trust and attract new investors. Each credit will have a digital record, allowing buyers to trace where it came from and what impact it had.
Countries and companies with net-zero targets will finally have a credible tool to meet their goals. Over 160 nations now have net-zero pledges. Around 60% of global companies already use or plan to use carbon credits to reach their climate goals.
- SEE MORE: High-Quality Carbon Credit Prices Hit Record Levels, Driven by Integrity and Market Shifts
How Business and Finance Are Responding
The approval of the first methodology will draw major interest from the energy and finance sectors. Many firms have been waiting for a reliable, UN-backed system.
The voluntary carbon market was worth about $2 billion in 2023, according to McKinsey. It could grow to more than $100 billion by 2030 as Article 6.4 trading begins. The new system will also pressure companies to buy only verified and transparent credits, cutting down on “greenwashing.”
Regional exchanges and carbon registries are preparing to include Article 6.4 credits once the market launches. Exchanges in Asia, Europe, and Latin America are already aligning with UN rules. This will help stabilize global carbon prices, which currently range from under $5 per tonne in voluntary markets to more than $90 per tonne in the EU system.
More stable prices could encourage long-term investments in clean energy and climate projects. Experts expect Article 6.4 credits to trade at a premium once investors recognize their higher quality.
ESG and Environmental Impact
The new UN system supports Environmental, Social, and Governance (ESG) goals worldwide. Companies that buy Article 6.4 credits can cut their carbon footprint while funding sustainable projects in vulnerable regions.
Renewable energy projects such as solar and wind farms in Africa and Asia create jobs, cleaner air, and better access to power. The International Renewable Energy Agency (IRENA) reports that renewable energy jobs reached 13.7 million in 2024, with strong growth expected in developing countries. These social benefits align with the UN Sustainable Development Goals (SDGs) for clean energy and climate action.
With stronger oversight, the UN aims to stop misuse and deliver real results. As carbon markets expand, credit integrity will define success. A 2024 study found that up to 40% of older offset credits lacked verifiable emission savings. Article 6.4 aims to close that gap.
Toward a Fair, Transparent, and Unified Carbon Future
Challenges remain before the new system reaches full scale. The next step is to approve more methods for areas like forestry, agriculture, and industry. These sectors are complex and need careful rules to avoid overstating emission cuts.
Negotiations between countries will also continue. Some worry that carbon trading may let others delay domestic cuts. Others believe it will open new funding for clean energy and climate adaptation.
The UN says developing countries will need about $4.3 trillion each year by 2030 to meet climate and energy goals. Article 6.4 could help fill that funding gap.
The Supervisory Body will meet again before COP30 in Belém, Brazil, where it may approve more methodologies. Governments and investors are watching closely as the system expands.
The UN system promises a fair and transparent market for everyone. As carbon prices become more consistent, the focus will shift to ensuring projects deliver real benefits for people and the planet.
- FURTHER READING: Carbon Credits Supply to Skyrocket 35x by 2050 – But at What Price?
The post UN Endorses First Article 6.4 Carbon Credit Methodology, Unlocking Billions for Global Carbon Markets appeared first on Carbon Credits.
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