Case study: Carbon markets & offsets integrity – myths vs. realities

Why it matters

Many U.S. organisations include carbon offsets as part of their procurement and supply‑chain decarbonisation strategies. Offsets can finance conservation, restoration and engineered removal projects that would not otherwise happen, bridging the gap between near‑term emissions and longer‑term abatement. Yet the voluntary carbon market has come under fire for delivering questionable climate benefits, prompting some buyers to pause purchases and wait for regulatory clarity. A May 2024 policy statement from the Biden administration and several U.S. agencies aims to rebuild trust by establishing voluntary carbon market principles that emphasise transparency, accountability and enhanced measurement. Understanding the realities behind common myths helps procurement teams source high‑quality credits and avoid reputational and financial risk.

Key concepts and common myths

Myth 1: All carbon credits represent a real tonne of emissions reduction. Reality: A landmark 2025 study examined 47 of the largest offset projects and found that 80 % of retired credits were problematic. Many projects lacked additionality, suffered from non‑permanence or leakage, or significantly over‑credited emissions reductions. Nearly all of these problematic projects were located in the Global South and benefited registries and verifiers headquartered in the Global North. Only three of the 43 projects assessed were in the United States, highlighting the scarcity of high‑integrity domestic supply. Procurement teams must scrutinise project methodologies, baselines and buffer pools to ensure that one credit truly equals one additional tonne of CO₂e reduction or removal.

Myth 2: Cheap offsets are just as effective as premium credits. Reality: Carbon pricing varies widely across project types. According to Sylvera’s 2026 market trends analysis, afforestation and reforestation projects rated BBB+ trade at more than $35 per tonne, while lower‑rated equivalents fetch under $20. Durable removals such as direct air capture can command $180 per credit in forward contracts. Low‑priced credits often reflect lower integrity or higher risk. Quality premiums are structural and buyers should build budgets that reflect the true cost of high‑integrity projects.

Myth 3: Carbon markets operate on a single, transparent price. Reality: There is no universal carbon price. Prices vary by project type, rating, geography and contract structure. Spot prices average around $5.6 per credit, but forward offtake deals for durable removals can exceed $180. Procurement managers need access to reliable market intelligence and should avoid using a single benchmark for budgeting. Understanding price fragmentation helps avoid overpaying for low‑quality credits or underpricing high‑quality supply.

Myth 4: Manual monitoring and verification is sufficient. Reality: Traditional MRV relies on infrequent field inspections and paperwork. KPMG estimates that manual verification delays credit issuance by two to three years and leaves up to 4.8 gigatons of credits stranded. Digital MRV platforms use satellites, drones, sensors and AI to automate data collection and reduce verification costs. Indonesia’s digital MRV pilot covers 800,000 tCO₂e reductions, and India’s Anaxee programme uses a 40 000‑person field force and AI to cut verification costs by 70 % and halve the time required. Procurement teams should favour projects that adopt digital MRV, which provides near‑real‑time data and increases transparency.

Myth 5: Offsets alone can deliver corporate net‑zero. Reality: Carbon credits should complement, not replace, deep decarbonisation. The U.S. Joint Policy Statement stresses that credits must represent emissions reductions beyond what would otherwise occur and calls for strong measurement and verification systems. Most corporates using high‑quality credits are decarbonising faster than those that do not. Procurement teams should ensure that offset purchases align with science‑based targets and integrate credits into broader climate strategies.

Case examples

Evidence of systemic failures: The 2025 Corporate Accountability study found that nearly a quarter of the voluntary carbon market’s retired credits in 2024 were problematic. Over 90 % of these credits were issued by a single registry. Forestry and land‑use projects were among the most problematic, with high risks of non‑additionality, non‑permanence and leakage. For procurement teams, this underscores the need to look beyond registry labels and evaluate project‑level risk assessments.

US policy guidance: In May 2024, the Biden administration released a Voluntary Carbon Markets Joint Policy Statement and Principles that encourage market transparency and integrity. The guidelines emphasise proper measurement, monitoring, reporting and verification, highlight earth observation technology and stress that credits must be high integrity and represent real emission reductions. This policy guidance signals that U.S. regulators expect buyers to conduct due diligence and avoid low‑quality credits.

Digital MRV pilots: Indonesia’s digital MRV pilot with the Gold Standard has created a blueprint for modern crediting systems by covering 800,000 tonnes of reductions. Verra and Pachama are piloting remote‑sensing platforms that use satellite imagery and machine learning to automate forest carbon measurements, while India’s Anaxee programme combines satellites, drones and a large field force to reduce verification costs and timelines. These pilots demonstrate that digital MRV can deliver the data and transparency procurement teams need.

Long‑term offtake programmes: Brazil’s ProFloresta+ is a 25‑year programme that will purchase 5 million high‑integrity credits from Amazon restoration projects. Such long‑term contracts provide predictable revenue streams and reduce market volatility. Similarly, global corporate offtake agreements announced in 2025 totalled US$13.7 billion but will deliver only 78 million credits over the next decade at an average price of $180. Concentrated buyer coalitions, often dominated by a handful of large companies, show that procurement teams can influence supply by aggregating demand and securing high‑quality pipelines.

U.S. earth observation and technology leadership: The World Economic Forum notes that earth‑observation platforms can provide real‑time data on forest conservation projects, measuring canopy cover, biomass and leakage to ensure accurate carbon accounting. The U.S. government encourages these tools to restore trust in voluntary carbon markets and supports their integration into monitoring frameworks.

What’s working and what isn’t

Working: Quality premiums for high‑integrity credits are becoming structural. Digital MRV platforms are reducing verification costs and accelerating issuance. Policy guidance in the U.S. and UK is clarifying how and when credits can be used. Long‑term offtake contracts and buyer coalitions help de‑risk projects .

Not working: Oversupply of low‑quality credits depresses prices and undermines trust. Many large projects still lack additionality and face non‑permanence and leakage risks. Manual MRV slows issuance and increases costs. Buyers lack clear, standardised data on project performance and often rely on registry labels without deeper diligence.

A quick framework for procurement teams

• Define objectives. Clarify whether offsets are being used to meet regulatory compliance, voluntary commitments or supply‑chain engagement. This determines acceptable credit types (avoidance vs. removals) and quality thresholds.
• Assess quality. Use independent ratings and certifications. Check for additionality, permanence, leakage safeguards and co‑benefits. Avoid projects flagged as problematic.
• Evaluate MRV. Prefer projects with digital MRV platforms that provide continuous data. Review issuance timelines and data transparency.
• Consider price and volume. Benchmark spot and forward prices across segments. Budget for premium prices for high‑rated projects and durable removals.
• Review policy and claims guidance. Align purchases with the U.S. Voluntary Carbon Markets Joint Policy Statement and emerging regulations.
• Plan for long‑term supply. Join buyer coalitions or sign multi‑year offtake agreements to secure high‑quality credits.
• Integrate with decarbonisation strategy. Ensure offsets complement emissions reductions and communicate how credits fit into sustainability plans.

Next steps checklist

1. Map current offset spend and identify the proportion sourced from high‑ integrity projects.
2. Engage with rating platforms to understand credit quality, price benchmarks and delivery risk.
3. Pilot digital MRV projects by partnering with developers using earth observation, remote sensing or AI tools to collect real‑time data.
4. Develop procurement policies that reference U.S. guidelines on voluntary carbon markets and set minimum quality thresholds.
5. Explore long‑term agreements or coalition buying to secure supply and influence project development.
6. Communicate transparently with stakeholders about how offsets are used and how they complement internal decarbonisation efforts.

FAQ

How do I tell if a credit is additional? Check whether the project would not have occurred without carbon finance. Look for independent validation, conservative baselines and evidence that emission reductions are beyond business‑as‑usual. Avoid credits flagged as non‑additional in ratings reports.

Why are durable removals so expensive? Technologies like direct air capture and mineralisation require high capital costs and energy inputs. This scarcity and cost explain why durable removals fetch prices around $180 per credit. Over time, costs are expected to decrease as technology scales and policy incentives increase.

Can I buy credits from domestic projects? High‑integrity domestic supply is limited – only a handful of the largest projects assessed in 2024 were located in the U.S.. Domestic projects may be more expensive due to higher operating costs, but they can reduce geopolitical risk and ensure alignment with local regulation.

Key Players

Established Leaders

• Verra — Largest carbon registry with ~63% voluntary market share. 2,000+ registered projects.
• Gold Standard — Premium carbon standard requiring UN SDG contributions. 84M credits issued in 2024.
• S&P Global Trucost — Carbon data and analytics for financial portfolios.
• MSCI — Carbon intensity and emissions data for investment portfolios.

Emerging Startups

• Sylvera — AI-powered carbon credit ratings using satellite data.
• Pachama — Forest carbon verification using satellite monitoring and AI.
• BeZero Carbon — Carbon credit ratings and risk assessments for buyers.
• Carbonplace — Blockchain-based carbon credit settlement network.

Key Investors & Funders

• Integrity Council for Voluntary Carbon Market — Setting Core Carbon Principles.
• Bezos Earth Fund — Supporting carbon market integrity initiatives.
• ICROA — Industry body promoting best practices in carbon offsetting.

Sources

• Corporate Accountability. (2025). Analysis of the World's Largest Offset Projects: Credit Integrity Assessment. Corporate Accountability.
• Sylvera. (2026). Carbon Market Trends: Quality Premiums and Price Fragmentation. Sylvera.
• AlliedOffsets. (2025). VCM Overview: Technical Removals Growth and Offtake Volumes. AlliedOffsets.
• UK Carbon Markets Forum. (2025). Net-Zero Economy Employment and Corporate Buyer Analysis. UK Carbon Markets Forum.
• World Economic Forum. (2024). U.S. Voluntary Carbon Markets Joint Policy Statement Summary. World Economic Forum.
• KPMG. (2024). Scaling Trusted Voluntary Carbon Markets: MRV Delays and Costs. KPMG.
• SustainCERT. (2024). Digital MRV: Improving Reliability and Efficiency. SustainCERT.
• Gold Standard & Indonesia. (2024). Digital MRV Pilot: Automated Measurement of 800,000 tCO2e. Gold Standard.
• Verra & Pachama. (2025). Remote-Sensing Pilot for Forest Carbon Measurement. Verra.
• Anaxee. (2025). Digital Runners Case Study: Cost Reductions and Verification Timelines. Anaxee.