- Independent information guide. Not an exchange, broker or registry.
- Plain-language explainer
How Carbon Credits Are Bought, Sold and Retired
A clear map of the carbon credit market: who issues credits, who sells them, and what happens when they are used.
Quick answer
How does the carbon credit market work?
In the carbon credit market, projects that cut or remove emissions are checked by independent auditors, and a registry then issues credits with serial numbers. Developers, brokers and retailers sell those credits to companies and individuals. A credit is used up when its owner retires it on the registry, which removes it from trading for good.
- Two markets
- Voluntary and compliance
- Single source of truth
- The registry that issued the credit
- End of the line
- Retirement, which cannot be undone
- Price drivers
- Type, quality, vintage, volume and demand
What is being traded in the carbon credit market?
A carbon credit is a unit on a registry that stands for one tonne of CO₂-equivalent avoided or removed by a certified project, and it can change owners many times before it is finally retired.
Unlike a share or a commodity, a credit has a single purpose. Someone eventually uses it to account for one tonne of their own emissions. Until then it can move between developers, brokers, retailers and buyers, and each transfer is recorded against its serial number.
Trading here simply means buying and selling these units. Most trades happen directly between companies or through retailers and brokers. Some standardised contracts are also listed on exchanges, but the registry entry is always what proves ownership.
How does a carbon credit move through the market?
Every carbon credit follows the same six-stage path, from a project on the ground to a retirement record on a registry.
- 01
Project
A developer runs a project that avoids emissions or removes CO₂, following an approved method.
- 02
Verification
An accredited third-party auditor checks the monitoring data against the method’s rules.
- 03
Registry issuance
The standard’s registry issues one credit per verified tonne, each with a unique serial number.
- 04
Seller or retailer
Developers sell directly, or through brokers and retailers who list credits for companies and individuals.
- 05
Buyer
A company or person agrees the price and quantity, and the credits are transferred to them or held for them.
- 06
Retirement
The owner retires the credits on the registry, naming the beneficiary. Retired credits can never be resold.
What is the difference between voluntary and compliance carbon markets?
Compliance carbon markets are created by law and cover regulated emitters, while the voluntary carbon market is where anyone can buy credits by choice.
| Aspect | Voluntary market | Compliance market |
|---|---|---|
| Who takes part | Companies, organisations and individuals, by choice | Regulated emitters such as power plants and heavy industry |
| Why they buy | Climate targets, customer expectations, personal choice | To meet a legal limit on emissions |
| Main unit | Carbon credits from certified projects | Allowances issued by a government, plus some eligible credits |
| Rules set by | Independent standards such as Verra and Gold Standard | Governments and regulators |
| Examples | Verra, Gold Standard, Puro.earth and Isometric registries | The EU Emissions Trading System; CORSIA for international aviation |
The two worlds are starting to meet. Article 6 of the Paris Agreement sets rules for countries to transfer emission reductions, and some voluntary credits can now carry extra labels for those uses. To follow the buyer’s side in more depth, read this carbon credit buying guide.
What drives the price of a carbon credit?
Carbon credit prices are set by negotiation between buyers and sellers, and they vary widely because credits differ in type, quality, age and how many are available.
There is no single market price for a voluntary carbon credit. Each project’s credits are priced on their own merits, and public price indexes only cover parts of the market. Treat any quoted figure as a snapshot, not a rule.
- Removal or avoidance. Removal credits, such as biochar or direct air capture, usually cost more per tonne than avoidance credits.
- Quality signals. Strong verification, conservative methods and labels such as the ICVCM CCP tend to support higher prices.
- Vintage. Recent vintages are often valued above older ones that used earlier methods.
- Co-benefits. Projects with measured benefits for health, income or nature can attract buyers willing to pay more.
- Volume and timing. Large or forward contracts are priced differently from small purchases of credits available today.
- Demand and policy. Corporate targets and changes in regulation shift how many buyers are looking for each kind of credit.
How can you buy carbon credits as a non-trader?
You do not need a trading account to buy carbon credits; most individuals and companies buy through a retailer in five steps.
-
Know your tonnes
Measure the emissions you want to cover, so you buy one credit per tonne and no more.
-
Choose a channel
Small buyers usually use a retailer. Large buyers may sign contracts with developers or use a broker.
-
Check the registry trail
Ask for the project ID and serial numbers and confirm them on the issuing registry before you pay.
-
Agree the terms
Confirm quantity, vintage, price and whether the seller or you will handle retirement.
-
Retire and record
Make sure the credits are retired with you as beneficiary, and keep the registry’s retirement record.
Retailers sell credits in small lots and handle retirement, which suits most people who are not active in the market.
Browse carbon offsetsWho keeps the market honest?
The carbon market relies on standards that write the rules, auditors who check projects, and registries that track every credit.
-
Standards
Programmes such as Verra (VCS), Gold Standard, Puro.earth and Isometric approve methods and decide when credits can be issued.
-
Validation and verification bodies
Accredited auditors check project design at the start and results over time, before any credits are issued.
-
Registries
Each standard runs or uses a registry that records issuance, transfers and retirements against serial numbers.
-
Integrity bodies
The ICVCM sets the Core Carbon Principles for credit quality, and the VCMI guides how buyers make claims.
-
Governments
Regulators run compliance schemes and, under Article 6 of the Paris Agreement, authorise transfers between countries.
-
Public scrutiny
Registry data is public, so journalists, researchers and buyers can check claims for themselves.
Frequently asked questions
Is carbon credit trading regulated?
Compliance markets are regulated by governments. The voluntary market is mostly governed by independent standards and registries, with growing oversight in some countries and integrity frameworks such as the ICVCM.
Who sets the price of a carbon credit?
Buyers and sellers agree prices for each project or batch. Type, quality, vintage, co-benefits, volume and demand all affect the result, so prices differ widely between credits.
Can individuals trade carbon credits?
Individuals can buy credits through retailers to cover their own emissions. Buying credits to resell for profit is not what the market is designed for, and retired credits cannot be sold again.
What is a carbon credit registry?
A registry is the database that records every credit a standard issues, who owns it, and when it is retired. It is the authoritative record that prevents the same tonne from being counted twice.
What is the difference between a carbon credit and an emission allowance?
A credit is earned by a project that avoids or removes a tonne. An allowance is a permit to emit a tonne, issued by a government under a cap-and-trade scheme such as the EU Emissions Trading System.
What does Article 6 of the Paris Agreement have to do with carbon credits?
Article 6 lets countries cooperate by transferring emission reductions between them. Its rules include adjustments so the same reduction is not counted by two countries, which affects some credits used for national targets.
Can a retired carbon credit be traded again?
No. Retirement is permanent. The registry marks the credit as used for a named beneficiary, and it can never be transferred or sold again.
Is CarbonCredits.trade a place to buy or sell credits?
No. This site is an independent information guide that explains how the market works. It does not hold accounts, list credits or arrange trades.
Ready to take part in the carbon credit market as a buyer?
Buy credits from a retailer that shows the project and registry, and make sure they are retired in your name.
About this guide
CarbonCredits.trade is written and maintained by the editorial team at Agochar Tech LLP, based in Rajkot, India. Facts are checked against the standards bodies and regulators listed under Sources, and the page was last reviewed in .
The guide is independent of any carbon project and does not rate or endorse specific credits. Spotted an error? Email hello@bharatchar.com and we will review it.