Carbon credits and offsetting for companies: how credits work and what makes a good one

What is a carbon credit?

A carbon credit represents one tonne of CO₂ equivalent that a project has avoided, reduced or removed from the atmosphere, measured against what would have happened without it and verified by an independent body. Credits are issued and tracked in registries. When a company uses one to compensate for its own emissions, the credit is retired, so nobody else can use it. Offsetting means buying and retiring credits for emissions you have not cut.

Avoidance and removal credits

Credits fall into two families:

• Avoidance and reduction credits come from projects that prevent emissions, such as renewable energy, efficient cookstoves, landfill gas capture or protecting forests from being cut down.
• Removal credits come from projects that take CO₂ out of the atmosphere: nature-based ones, such as planting forests and storing carbon in soils, or technological ones, such as direct air capture or biochar, with storage that lasts from decades to thousands of years.

What makes a credit high quality

The price of a credit says little about its quality. These are the criteria that do:

• Additionality: the project would not have happened without the money from credits.
• Permanence: the carbon stays out of the atmosphere, with a buffer against losses such as forest fires.
• A conservative baseline and no leakage: the counterfactual is not inflated, and the emissions do not simply move elsewhere.
• No double counting: each tonne is claimed once, including between countries through corresponding adjustments under Article 6 of the Paris Agreement.
• Independent verification and a public registry where the credit is retired in your name.

Standards and labels

A few programmes and labels set the rules most buyers rely on:

• Verra’s Verified Carbon Standard and the Gold Standard, the largest programmes in the voluntary market.
• The Integrity Council for the Voluntary Carbon Market (ICVCM), whose Core Carbon Principles label marks credits from programmes and methodologies it has assessed.
• France’s Label Bas-Carbone, a state label since 2018 for projects in France, such as forestry and farming.
• The EU framework for carbon removals and carbon farming, Regulation (EU) 2024/3012, which certifies removals in the EU under methodologies set by delegated acts.

Offsetting, insetting and contribution

Insetting means cutting or removing emissions inside your own value chain, for example by paying a supplier to switch to renewable heat. It lowers your own footprint and is not a credit. Offsetting compensates for emissions with credits from outside your value chain. A third approach, often called contribution or beyond value chain mitigation, funds climate projects without claiming that they cancel your emissions; the SBTi encourages it alongside reductions, never instead of them, and accepts only removals to neutralise the residual emissions of a company at net zero.

How to report credits and what you may claim

Under the GHG Protocol, credits are reported separately from your footprint and never subtracted from it, and they do not count towards science-based reduction targets. In the EU, the EmpCo directive bans claims from 27 September 2026 that a product has a neutral, reduced or positive climate impact because of offsetting. You can still say which projects you fund, how many credits you retired and in which registry, as long as you keep that apart from claims about your product or your emissions.

Doing it in Greener Ahead

Greener Ahead does not sell carbon credits. Carbon accounting in Greener Ahead keeps your gross footprint by scope and year, with the emission factor and source behind every tonne, and records offsets apart from it, so the emissions you reduce and the credits you buy are never mixed up. It costs €1,495 per year with unlimited users, and you can try it free for 14 days without a card. Climate strategy, coming soon, adds reduction targets and a plan with an owner for every action. Check the pricing page for current details.

Credit types at a glance

How the main types of credit compare.

Before you buy credits

Credits come after reductions, and only with evidence.

• Measure your footprint and set a reduction plan first.
• Check the standard, the methodology and whether it carries the ICVCM label.
• Prefer removals for any residual emissions you want to neutralise.
• Make sure the credits are retired in your name in a public registry.
• Describe what you fund separately from your footprint and your products.