Playbook: Adopting carbon markets & offsets integrity in 90 days

Executive summary

Voluntary carbon markets are in flux. In the United States the value of the voluntary carbon market fell to around US$535 million in 2024, down from more than US$2 billion in 2021, according to government research. Buyers are increasingly sceptical about credit quality and many have paused purchases until standards improve. At the same time, compliance markets in California and the Regional Greenhouse Gas Initiative (RGGI) are generating billions of dollars in revenue and demonstrating rigorous protocols for issuing credits.

This article argues that carbon credits can play a valuable role in corporate decarbonisation strategies when used after ambitious within‑value‑chain reductions and when sourced from high‑integrity projects. The emerging standards from the Integrity Council for the Voluntary Carbon Market (ICVCM), the Voluntary Carbon Markets Integrity Initiative (VCMI) and the U.S. federal joint policy statement provide a clear blueprint: credits must reflect additional, permanent and measurable emission reductions and should complement – not substitute for – internal abatement.

Using examples from U.S. compliance programmes, digital monitoring pilots and innovative data frameworks, this playbook outlines practical steps investors can follow over the next 90 days to start engaging with carbon markets while managing risk. It concludes with a checklist and answers to frequently asked questions.

Why it matters

Carbon markets have the potential to channel billions of dollars into climate action, ecosystem restoration and community development. Done well, high‑integrity credits can finance projects that would not otherwise happen, from avoided deforestation to engineered carbon removal. They can also help companies meet interim climate targets by covering residual emissions, provided the credits complement rigorous emissions reductions in their own operations.

In the U.S. context, two dynamics make a playbook necessary:

• Market contraction and reputational risk. Recent investigations revealed that many credits in the voluntary market lacked additionality or permanence, causing buyers to retreat. The value of the voluntary market dropped sharply to about US$535 million in 2024. Investors need confidence that the credits they buy deliver real climate benefits.

• Emerging policy guidance. In May 2024 the U.S. Treasury and other federal agencies issued a joint policy statement emphasising that credits should be used in addition to science‑aligned reductions and must meet high integrity standards. At the same time, compliance markets like California’s cap‑and‑trade and RGGI continue to raise billions and impose strict protocols for offsets. Understanding these policies is essential for navigating the landscape.

Key concepts and market fundamentals

Voluntary vs compliance markets

Voluntary markets allow organisations to purchase credits on an optional basis to cover residual emissions. They are unregulated, so credit quality depends on standards established by registries (e.g., Verra, Gold Standard) and emerging meta‑standards like the ICVCM’s Core Carbon Principles and VCMI’s Claims Code. In the U.S., voluntary markets operate alongside compliance mechanisms and draw on similar methodologies but are not legally required.

Compliance markets are government‑mandated schemes that cap emissions and allow regulated entities to trade allowances and offsets. The two largest in the United States are:

• California’s Cap‑and‑Trade Program: Covers roughly 76 % of California’s economy‑wide emissions and auctions allowances quarterly. The cap for 2025 is 267.4 million tonnes CO₂e and the average auction price in 2024 was US$35.21 per tonne. Offsets can cover up to 4 % of a company’s compliance obligation (rising to 6 % after 2025) and must follow one of six approved protocols (e.g., U.S. forest conservation, livestock methane, urban forests). California imposes buyer liability for invalidated credits and requires that at least half of offsets deliver direct environmental benefits to California or Tribal communities.

• Regional Greenhouse Gas Initiative (RGGI): Covers power‑sector emissions in 11 Eastern states. The 2024 cap is 69 million tonnes CO₂ and the average allowance price was US$18.06. Offsets may cover only 3.3 % of a power plant’s compliance obligation and only three offset types are eligible (landfill methane, forestry and manure management). As of 2023 only one offset project had been approved, illustrating stringent quality requirements.

Compliance markets provide insights into designing robust offset programs: they set clear rules for additionality, permanence, quantification and verification; they limit offset use; and they provide transparency through public registries.

Integrity criteria: additionality, permanence, leakage and co‑benefits

Additionality means that a project’s emissions reduction or removal would not occur without revenue from carbon credits. U.S. standards and federal guidance emphasise that credits must go beyond existing policies and business‑as‑usual activities. For example, forest carbon projects must demonstrate that land would have been harvested or degraded absent the credit revenue; agricultural soil carbon projects must compare to robust baselines.

Permanence refers to the durability of carbon stored or avoided. California’s protocols require offset projects to commit to 100‑year permanence, and buyers carry liability if an offset is reversed. Investors should examine buffer pools, insurance mechanisms and legal arrangements that backstop permanence claims.

Leakage occurs when emissions reductions in one area cause increased emissions elsewhere (e.g., protecting a forest leads to logging shifting to another region). High‑quality projects conduct leakage assessments and include conservative deductions if needed.

Co‑benefits are social and ecological impacts beyond carbon. California’s programme requires that at least half of offsets provide direct environmental benefits to the state or Tribal communities, recognising that projects can deliver biodiversity, water quality or cultural benefits. Investors should prioritise projects with robust safeguards and equitable benefit sharing.

Data and monitoring, reporting & verification (MRV)

One major barrier to high‑integrity markets is the fragmented data landscape. Project developers spend up to 60 % of their time responding to duplicative data requests, while buyers can take more than a year to complete due diligence. Manual verification can take two to three years, costing developers billions and leaving gigatonnes of credits unissued.

Digital MRV solutions address these issues. For instance, platforms like Anaxee combine a 40,000‑member field force with AI and satellite analytics to deliver near‑real‑time data, reducing verification costs by up to 70 % and shortening verification time from 14 months to 6 months. SustainCERT’s digital platform similarly provides standardized, auditable data streams and near‑real‑time issuance. Initiatives like RMI’s Carbon Crediting Data Framework (CCDF) organise 570 fields across 22 categories to streamline due diligence and enable comparability across projects.

What’s working

Despite headline scandals, several U.S. programmes illustrate how carbon crediting can deliver value when designed carefully:

California’s Offsets Program

California’s cap‑and‑trade scheme demonstrates that offsets can supplement a compliance programme without undermining emissions reductions. By capping offset use at 4–6 % and requiring rigorous protocols for additionality and permanence, California maintains market integrity. The programme has issued more than 267 million offsets (mainly improved forest management) and generates revenue for Tribal and Alaska Native communities; over 61 million credits have been issued to these communities, financing land conservation and new businesses.

RGGI’s conservative approach

RGGI has issued only a single offset project since inception, limiting allowances for offsets to just 3.3 % of compliance obligations. This cautious approach has avoided the integrity controversies seen in other markets and created a predictable, regulated pathway for offsets.

Digital MRV pilots and data frameworks

Digital MRV pilots, such as the Anaxee field network and SustainCERT’s technology platform, show that technology can dramatically reduce the cost and delay of verifying credits. The use of remote sensing, mobile data collection and blockchain enables near‑real‑time tracking and immutable records. RMI’s CCDF provides a blueprint for standardized data reporting and reduces due diligence friction.

Sector diversification

The U.S. voluntary market hosts more than 2,300 active projects, with roughly 30 % focused on removals and more than 400 developers working on carbon dioxide removal technologies. This diversity spans forestry, agriculture, blue carbon, biochar, direct air capture and mineralization, offering investors multiple pathways to decarbonisation.

What isn’t working

Despite pockets of success, several problems persist:

• Integrity scandals erode trust. Investigations into large forestry projects revealed over‑crediting and unrealistic baselines, leading some buyers to pause purchases. When integrity is questioned, credit prices collapse, as seen in the voluntary market’s value decline.

• Long verification timelines and high costs. Manual MRV can take two to three years and cost projects millions. Delays discourage developers and reduce credit supply.

• Data fragmentation and due diligence hurdles. Without standardized data, buyers may spend a year or more assessing projects. The lack of consistent reporting makes comparing credits difficult and slows investment decisions.

• Policy uncertainty. The federal government’s joint policy statement provides guidance but does not create a regulatory regime. Legislative proposals to regulate voluntary markets and digital MRV remain under debate, creating uncertainty for both buyers and developers.

• Supply shortages for high‑quality removals. Durable removals such as bioenergy with carbon capture and storage (BECCS), direct air capture and mineralisation remain expensive and scarce. Offtake agreements command prices above US$100 per tonne and available supply is far below demand, creating a risk of compliance bottlenecks in the long term.

A 90‑day playbook for U.S. investors

This playbook outlines nine steps for investors who want to start using carbon credits responsibly and efficiently over a 90‑day timeframe. Adapt the timeline to your organisation’s capabilities.

Days 1–10: Define your strategy and align with mitigation hierarchy

1. Assess your emissions baseline. Conduct a full greenhouse‑gas inventory and identify near‑term reduction opportunities. Use widely accepted standards such as the GHG Protocol.

2. Set science‑aligned targets. Adopt targets aligned with the Paris Agreement and sector‑specific pathways. High‑integrity credit use is only appropriate for residual emissions beyond these targets.

3. Develop a credit policy. Define internal rules for when and how credits will be used. The policy should prioritise reductions first and specify that credits must meet stringent quality criteria (e.g., ICVCM Core Carbon Principles, VCMI Silver/Gold/Platinum claims).

Days 11–30: Understand standards and policy landscape

4. Learn emerging standards. Familiarise yourself with the ICVCM Core Carbon Principles (CCPs), the VCMI Claims Code and the U.S. Joint Policy Statement. These frameworks provide guidance on additionality, permanence, MRV, governance and co‑benefits.

5. Review compliance market protocols. Study California and RGGI protocols to understand how high‑integrity projects are designed and monitored. Even if you operate in the voluntary space, these rules offer a benchmark for quality.

6. Monitor federal and state policy. Track regulatory developments such as potential federal legislation on voluntary markets, the Commodities Futures Trading Commission (CFTC) oversight of carbon credit derivatives and state initiatives (e.g., Washington’s Cap‑and‑Invest program). Understand how these may affect credit eligibility and demand.

Days 31–45: Build your pipeline and due diligence process

7. Map the market. Identify project types (forestry, agriculture, engineered removals, urban forestry, blue carbon) and registries that align with your policy. Use platforms like AlliedOffsets or CarbonMap to scan active projects; note that over 2,300 projects operate in the U.S. voluntary market.

8. Leverage data frameworks. Adopt standardized due diligence tools like RMI’s CCDF, which organises 570 data fields to streamline comparisons and may reduce due‑diligence time. Require project developers to provide CCDF‑aligned data.

9. Evaluate digital MRV capabilities. Prioritise projects that use digital MRV technologies to reduce verification time and cost. Examples like Anaxee’s field network and AI remote sensing show 70 % cost reductions and 6‑month verification timelines. Ask developers how they collect and store data, and whether the methodology is audited and transparent.

Days 46–70: Negotiate and secure contracts

10. Assess project-level risk and impact. Evaluate additionality, permanence, leakage and co‑benefits. Look for legal protections (e.g., conservation easements, insurance) and community engagement. Check that projects have buffer pools to address reversal risk and that they include social safeguards.

11. Diversify and pilot. Build a diversified portfolio across regions, project types and methodologies. Start with smaller pilot purchases to test processes and build internal expertise. Combine nature‑based projects (forests, soils, grasslands) with engineered removals to balance cost and durability.

12. Negotiate long‑term offtake agreements. For removal technologies, consider pre‑purchasing credits to support scaling. Recognise that durable removals cost substantially more than avoidance credits; a long‑term contract can secure supply and manage price risk.

13. Include integrity clauses. Contracts should allow replacement of credits if integrity issues emerge and require transparent reporting from project developers. Consider specifying minimum standards (e.g., ICVCM CCPs) and digital MRV requirements.

Days 71–90: Monitor, report and iterate

14. Track performance. Use digital dashboards and third‑party registries to monitor credit issuance, retirement and project outcomes. Ensure credits are retired promptly against your emissions inventory.

15. Disclose transparently. Report credit purchases and associated claims in sustainability reports, aligning with the Task Force on Climate-related Financial Disclosures (TCFD) and incoming SEC climate disclosure rules. Use the VCMI Claims Code to signal the proportion of residual emissions covered by credits.

16. Engage with policy and industry bodies. Participate in working groups (e.g., CFTC climate risk advisory, ICVCM working groups) to shape standards. Provide feedback on federal guidance and support initiatives that promote high-quality supply and demand.

17. Review and refine. After the 90‑day pilot, assess outcomes: Did credits meet integrity expectations? Were internal processes efficient? Use lessons learned to refine your credit policy and expand purchasing where appropriate.

Fast-moving segments to watch

Digital MRV platforms. Solutions combining remote sensing, field verification, machine learning and blockchain are rapidly maturing. They offer near‑real‑time data and can reduce verification costs by up to 70 %. Investors should watch for providers partnering with registries and compliance schemes.

Standardisation efforts. The ICVCM’s Core Carbon Principles and VCMI’s Claims Code are set to become de facto benchmarks. In 2026 the U.S. Securities and Exchange Commission may require climate-related disclosures, including emissions offsets; alignment with emerging standards will become critical.

Engineered removals. Biochar, BECCS, direct air capture and enhanced rock weathering are scaling but remain supply constrained and expensive. New U.S. federal tax credits (e.g., 45Q) and Department of Energy procurement programmes may spur growth, but supply will remain tight in the near term.

Jurisdictional programmes. States like Washington (Cap‑and‑Invest) and New York (pending Climate Leadership and Community Protection Act implementation) are exploring their own offset protocols. These may create local high-integrity supply and new investment opportunities.

Action checklist

• Align with science: Inventory emissions and set near‑term reduction targets before buying credits.
• Study standards: Understand ICVCM, VCMI, California and RGGI protocols to set quality benchmarks.
• Prioritise digital MRV: Choose projects using digital monitoring to ensure data accuracy and lower verification costs.
• Diversify portfolio: Combine nature‑based projects with engineered removals and across geographies.
• Negotiate wisely: Secure long‑term offtakes with integrity clauses and maintain the right to replace credits if standards evolve.
• Report transparently: Use standard frameworks to disclose purchases and claims; ensure retired credits match reported emissions.
• Iterate: Periodically review your credit strategy based on policy changes, market developments and internal learning.

Frequently asked questions

Why use carbon credits when the market has issues? Credits should be used only for residual emissions after ambitious reductions. When sourced from high‑integrity projects, credits finance real climate solutions that would not otherwise happen and deliver social and ecological co‑benefits. They are not a licence to pollute and should always complement a robust decarbonisation strategy.

How do I know if a credit is additional? Look for projects validated under rigorous protocols (e.g., California or RGGI) or the Core Carbon Principles. Ask developers to share baselines, demonstrate why the project wouldn’t proceed without carbon finance, and provide evidence of performance monitoring and third‑party audits.

What’s the difference between removals and avoidance credits? Avoidance credits fund projects that prevent emissions from happening (e.g., forest conservation, methane capture). Removals physically remove CO₂ from the atmosphere and store it (e.g., biochar, BECCS, direct air capture). Removals provide more permanent climate benefits but are more expensive and supply constrained.

What happens if a credit is reversed (e.g., a forest burns)? High‑quality projects maintain buffer pools of credits to compensate for reversals and include legal agreements to restore carbon stocks. California imposes buyer liability; if an offset is invalidated, the buyer must replace it.

Are digital MRV methods accepted by regulators? Digital MRV is gaining traction, but acceptance varies. California and RGGI currently rely on field verification, though pilot projects show digital MRV can enhance accuracy and reduce cost. Investors should verify that a project’s methodology is approved by its registry and be aware that regulators may adopt digital MRV standards in the coming years.

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. Independent quality scoring.
• 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 backed by major banks.

Key Investors & Funders

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

Sources

• U.S. Government Accountability Office. (2025). Carbon Credits: Limited Federal Role in Voluntary Carbon Markets. GAO.
• U.S. Treasury et al. (2024). Voluntary Carbon Markets Joint Policy Statement and Principles. U.S. Treasury.
• ICAP. (2025). California Cap-and-Trade: Cap Size, Allowance Prices and Offset Protocols. International Carbon Action Partnership.
• ICAP. (2025). Regional Greenhouse Gas Initiative: Cap, Prices and Offset Policies. International Carbon Action Partnership.
• California IEMAC. (2024). Independent Emissions Market Advisory Committee Report. California Air Resources Board.
• AlliedOffsets. (2025). US Voluntary Carbon Market: Active Projects and CDR Developers. AlliedOffsets.
• RMI. (2025). Carbon Crediting Data Framework: Standardized Data Fields for Due Diligence. Rocky Mountain Institute.
• Anaxee. (2025). Digital MRV for Carbon Markets: Field Force and AI Verification. Anaxee.
• SustainCERT. (2024). Digital MRV and Carbon Markets: Real-Time Issuance and Data Reliability. SustainCERT.
• KPMG. (2023). Market and Regulatory Outlook for Carbon Credits: MRV Delays and Costs. KPMG.