Reforms to the voluntary carbon market (VCM) are largely failing and appear to be limited in scope and potential.
A new deep dive into the VCM in 2024 by Corporate Accountability, an advocacy organisation, showed that over 47.7 million “problematic credits” – those not likely to lead to the promised emissions reductions – were retired through 43 of the world’s largest offset projects in 2024. The 43 projects account for nearly 25% of the VCM.
A carbon offset is an ‘allowance’ that governments, institutions, and corporations – from fossil fuel majors and airlines to fast-food and drinks companies – purchase from environmental projects to count towards their greenhouse gas emissions reductions. They have also been used by companies and brands to claim ‘carbon neutrality’ – a term that is now heavily linked to greenwashing.
Rachel Rose Jackson, director of climate research and policy at Corporate Accountability, said: “The latest evidence calls on policymakers as well as investors and supporters of carbon offsets to reckon with why such liability is being taken to continue to worship the voluntary carbon market, and for what real purpose – if it is not likely to lead to emissions reductions? Who is responsible for the repeated failures of the ‘checks and balances’ that are supposedly plugging the holes of this sinking ship?”
Previous research by Corporate Accountability has poked holes in the carbon credit market, but the latest investigation comes following a period of reflection for those involved in the market, which they have said is leading to new approaches and higher integrity credits.
Verra this week launched the final public consultation on proposed updates to the Verified Carbon Standard (VCS) Program, which will result in version 5. The VCS is a standard for certifying carbon credits to offset emissions. “The updates will ensure that the program continues to advance impactful, equitable, and lasting climate action with strengthened guardrails, benefitting people and the planet,” the organisation said.
However, Verra hosts the largest number of problematic projects in Corporate Accountability’s assessment, retiring 43.6 million problematic offsets through the assessed projects. This suggests that its updated methodologies and measures taken to assure investors may not rectify the flaws, the researchers said.
Three other registries were involved in retiring problematic offsets from these projects, and at least 17 verifiers were involved in approving these problematic offsets for VCM trading, to then be purchased by VCM buyers all around the world.
The 2025 climate change litigation snapshot, published by LSE this week, showed carbon credits were the focus of a “growing number” of climate-washing cases. “Most of these cases challenge the lack of transparency and clarity in advertisements around companies’ use of credits,” the academics explained.
The UK Government is currently consulting on how to ensure the integrity of voluntary carbon and nature market credits and the use of credits. The Government has said it remains “supportive of action to unlock high integrity voluntary carbon and nature markets”.
Wood Mackenzie this week predicted that rising demand, policy evolution, strategic corporate deals, and technological advancements will fuel “steep growth” trajectories for both carbon offsets and carbon capture, utilisation and storage.
Meena Raman, head of programmes at Third World Network, a non-profit, said the Corporate Accountability research “serves as an eleventh-hour warning for supporters and investors of carbon offsets and the carbon market”. Raman said it is time to “reinvest into proven solutions that permanently reduce emissions at source and justly address the root causes of climate change”.
