S&P Global and JPMorgan’s blockchain division, Kinexys, launched a pilot to tokenize carbon credits. They aim to use blockchain and smart contracts to improve voluntary carbon markets (VCMs), make them more transparent, trustworthy, and liquid.
Their initiative is important because the global carbon credit market is worth about $933 billion in 2025, and can grow to over $16 trillion by 2034. This move could unlock major climate finance opportunities by tackling key issues that have held the market back.
From Blocks to Credits: The Digital Carbon Evolution
The voluntary carbon credit market is worth about $4.04 billion in 2024. It could grow to $24 billion by 2030 with an annual growth rate over 35%. However, this market has many flaws. Multiple registries make it hard to compare credits.
Transparency issues continue to raise concerns about fraud and double-counting—when the same carbon credit gets sold or claimed more than once—in carbon markets. Ghost credits, which are fake reductions, hurt market integrity. Overstated impact claims and double-counting also damage investor confidence, as shown in the chart below.
Estimates show that in 2021, hundreds of millions of tonnes of CO₂ equivalent credits faced issues. As the market grows, this number could rise significantly. To improve transparency, organizations are using blockchain tracking and better verification. These efforts aim to cut risks as the VCM grows. By 2030, analysts expect trade around 1.5 billion tonnes of CO₂ equivalent.
Low liquidity turns off big investors. Plus, no central exchange or standard contracts splits the market. This limits growth and makes it hard for institutions to join in.
These weaknesses undermine trust and prevent big capital from entering the market. By tokenizing credits, S&P and JPMorgan aim to fix these problems and transform carbon credits into reliable digital assets.
How Tokenization Changes the Game
The joint pilot combines the Environmental Registry from S&P Global Commodity Insights with JPMorgan’s Kinexys blockchain platform. Together, they can turn carbon credits into digital tokens. These tokens are stored on an unchangeable ledger that everyone can access.
This system performs the following:
- Standardizes credits across different projects—such as reforestation or direct air capture—to make them comparable.
- It ensures transparency by permanently logging the issuance, transfers, and retirement of each credit. This helps tackle fraud and double-counting issues that have affected the market.
- Enables smart contracts that automate tasks. For example, credits retire when purchased, which cuts transaction times from months to minutes.
- Enables cross-chain transfers, which lets tokens move smoothly between platforms and registries. It boosts interoperability and market depth.



Tokenized credits can act more like stocks or bonds by solving issues of fragmentation, trust, and liquidity. This makes them tradable, verifiable, and scalable.
In the JPMorgan and S&P Global partnership, tokenized carbon credits can move more easily between companies, countries, and investors. This allows credits to be part of new climate-related financial products. Examples are tokens that show a share in a reforestation project or investments in carbon removal tech.
By making carbon markets more efficient and trustworthy, tokenization could attract more money into projects that fight climate change. This is a vital step as demand for high-quality, verifiable credits continues to outpace supply.
JPMorgan and S&P Global’s Pilot Program
JPMorgan launched this pilot with Kinexys, its blockchain arm. Kinexys, once called Onyx, has handled over $1.5 trillion in transactions since 2015. This shows it can support large finance systems.
The bank teamed up with S&P Global Commodity Insights and top registries: EcoRegistry and the International Carbon Registry. This partnership aims to get real carbon credit data and test how well blockchain can track credits from issuance to retirement.
Keerthi Moudgal, Head of Product at Kinexys Digital Assets, Kinexys by J.P. Morgan, noted:
“The voluntary carbon market is primed for innovation, and we’re eager to collaborate with participants to develop and implement new blockchain technology. Our shared aim is to establish standardized infrastructure that enhances information and price transparency, paving the way for financial innovation and increased market liquidity.”
Why This Deal Matters for Investors and the Environment
This new digital approach to carbon credits matters for both financial markets and climate action. For investors, tokenization creates a new asset class that is transparent, secure, and easy to trade.
Investors can now track where their money goes and how it helps reduce emissions. It also helps diversify portfolios with climate-related assets. These assets might gain value as climate rules become stricter.
For the environment, a more transparent and accessible carbon market means more funding can go to projects like forest restoration, clean energy, and carbon removal. Notably, removal credits are expected to account for 35% of the voluntary carbon market by 2030.



When it’s easier to see that these projects provide real climate benefits, trust grows. Then, participation increases too. This is crucial for helping companies, especially in tough-to-decarbonize sectors, meet their climate goals effectively.
What This Means for Carbon Trading’s Future
Despite the promise of improving trust and market growth, this pilot still needs to tackle key challenges:
- Regulatory alignment: Different regions (e.g., EU vs. U.S.) have distinct rules on carbon accounting and tokenized assets. Global standards are still being developed. This uncertainty in regulations is a barrier to widespread adoption.
- Integration with existing systems: The tokenized model must link to current registries, such as Verra and Gold Standard. This connection prevents isolation and ensures market-wide interoperability.
- Market adoption: Tokenized credits need backing from investors, corporates, and funds. Without demand, liquidity may remain low, even as the voluntary market is projected to grow fivefold by 2030.
- Avoiding hype cycles: Blockchain projects risk attracting speculative investment. Tokenized carbon must demonstrate real value, not bubble-like behavior.
JPMorgan and S&P aim to resolve these by proving the approach in the coming months. Their success could set a global template for carbon finance.
Together, they are pioneering an important innovation to address transparency, trust, and liquidity problems in voluntary carbon markets. They aim to mix registry data with blockchain tech to create a secure, programmable, and tradable asset for climate financing.