The carbon-credit market came into being with a sole mission to save the planet. The way it is supposed to work is very simple: put a price on emissions and fund climate-friendly projects.
But if you go beyond its grandiose mission statements, you are likely to find that this market has become a murky space. It’s difficult to verify what’s happening on the ground, and easy to manipulate crucial numbers.
In short, the system, as it stands, is imperfect.
Raising The Stakes
In a previous article in the Build on Blockchain series, we cursorily discussed how blockchain could streamline this opaque and fragmented carbon-credit market by tokenising each credit and assigning it a unique digital identity.
This move, we argued, would enable all parties involved to track and verify when the credit was issued, who bought it, and when it was used.
A major step in that direction has been taken by JPMorgan Chase & Co, which is developing a new service to tokenise carbon credits and is partnering with carbon companies for an initial trial, said Bloomberg in a report on July 2.
For the uninitiated, one carbon credit equals one tonne of carbon dioxide emissions, and the buyer of a credit …
The carbon-credit market came into being with a sole mission to save the planet. The way it is supposed to work is very simple: put a price on emissions and fund climate-friendly projects.
But if you go beyond its grandiose mission statements, you are likely to find that this market has become a murky space. It’s difficult to verify what’s happening on the ground, and easy to manipulate crucial numbers.
In short, the system, as it stands, is imperfect.
Raising The Stakes
In a previous article in the Build on Blockchain series, we cursorily discussed how blockchain could streamline this opaque and fragmented carbon-credit market by tokenising each credit and assigning it a unique digital identity.
This move, we argued, would enable all parties involved to track and verify when the credit was issued, who bought it, and when it was used.
A major step in that direction has been taken by JPMorgan Chase & Co, which is developing a new service to tokenise carbon credits and is partnering with carbon companies for an initial trial, said Bloomberg in a report on July 2.
For the uninitiated, one carbon credit equals one tonne of carbon dioxide emissions, and the buyer of a credit is allowed to emit that much CO2.
A credit is typically generated from efforts made towards conserving forestry or supporting renewable energy projects. A tokenised credit would be a digital version of a carbon offset issued on a blockchain.
Although there have been a few companies, such as AirCarbon Exchange, Toucan Protocol, and DeepMarkit, facilitating tokenised carbon-credit trades, JPMorgan’s pilot is one of the most high‑profile initiatives by a major global bank.
It integrates multiple registry systems via S&P Global, EcoRegistry, and the International Carbon Registry, aiming to create end-to-end tokenisation — from issuance to retirement. JPMorgan has made its ambitions clear: it wants to become the “carbon bank of choice”.
JPMorgan isn’t pioneering the concept, but it is raising the stakes for institutional adoption and industry integration.
Taking Buyers For a Spin
The push to tokenise carbon credits isn’t just a hi-fi tech pursuit. It’s about fixing a system that’s quietly falling apart.
Take the infamous Kariba project in Zimbabwe, once the poster child of carbon offsetting. It was run by South Pole, one of the biggest names in the space, and claimed to have saved a forest nearly the size of Puerto Rico or the Indian state of Tripura.
It was indeed a big deal, and brands like Nestlé, Gucci, and McKinsey bought millions of credits from Kariba, believing they were doing right by the planet.
But the math didn’t add up. Follow The Money, an investigative news outlet, revealed in an exposé that the emissions supposedly avoided by Kariba were massively overstated — by as much as 30 times in one estimate.
The credits were technically “valid” under current rules, but they didn’t actually reflect real-world carbon savings. That’s like paying full price for five kilos of wheat and getting just one.
This is where blockchain comes in as a much-needed disinfectant to fix the rot. Tokenising credits makes every transaction transparent and traceable: who issued it, who bought it, and who used it.
In short, no more shady middlemen, no more invisible forests. Just simple, verifiable data on an open book.
Where India Stands
India is gearing up to be a major player in the carbon credit game. The country is putting together a national market for trading credits and plans to switch to a ‘cap‑and‑trade’ system by 2026 — something like what the European Union already does.
The idea is simple: set a cap on emissions and let companies trade pollution permits within that limit.
The system will rely on a central registry and strong checks. That means proper tracking, reporting, and verification. Technologies like blockchain and AI are being adopted to establish its trustworthiness.
According to netzeroindia.org, things are already moving in 2025. Clearer rules and growing global demand are giving India’s carbon credit market a solid push.
In fact, the Power Ministry and the Bureau of Energy Efficiency are working on a proper trading framework to make India a net exporter of carbon credits, powered by our focus on renewable energy and reforestation efforts.
Final Words
Of course, none of this will work if buyers don’t trust the credits. That’s why getting the tech and transparency right from day one is India’s best shot at standing out in a crowded global market.
Moves like JPMorgan’s could give India a real leg-up. As global buyers begin to demand cleaner, tamper-proof carbon credits, Indian projects that tick those boxes will naturally stand out.
Tokenisation could open doors to bigger markets, bring in more funding, and help India’s carbon credit system grow up fast — without first going through the messy, error-prone phase others did.
In a world where companies are getting called out for greenwashing, blockchain could give Indian carbon credits a badge of trust — and maybe even a premium.
This series is brought to you in partnership with Algorand.
