Manya Rathore
Research expert covering India
Voluntary carbon markets worldwide - Statistics & Facts
The voluntary carbon market is gaining traction, with the total number of VCM credits issued worldwide reaching 4.6 billion in 2024. As more companies set net-zero targets, a growing number are purchasing carbon credits to offset their emissions and achieve these goals. However, a string of high-profile scandals over the credibility and overall effectiveness of certain credits has seen the value of VCM transactions fall 75 percent since peaking at 2.1 billion U.S. dollars in 2021. With the VCM now facing numerous challenges and increased scrutiny, can it ride out the storm and help meet climate goals, or will the market die out?
Although nature-based projects are the most common offsetting strategies, engineered carbon dioxide removal (CDR) solutions are growing in demand. Many major companies are investing heavily in these technologies. Microsoft, in particular, is a key driver of CDR technology growth, having purchased more than 22 million CDR credits to offset its carbon emissions to date.
The voluntary carbon market (VCM) has the potential to play a key role in combatting climate change. However, it must overcome several challenges to fulfil its potential, particularly with regard to trust issues. This will require urgent reforms, such as increasing federal regulation and assessing and ensuring the quality of carbon credits.
What is the voluntary carbon market?
VCMs trade in carbon credits that are generated through various carbon offset projects, many of which are located in the Global South. These credits, which are equivalent to one metric ton of carbon dioxide (tCO₂) reduced or removed from the atmosphere, can be purchased by companies, non-profit organizations, or individuals on a voluntary basis. Once their benefit has taken place, these credits are “retired” and must then be taken off the market. The four major voluntary offset project registries are Verra (VCS), Gold Standard (GS), American Carbon Registry (ACR), and Climate Action Reserve (CAR). Verra is the largest carbon credit program by far, having issued more than 1.4 billion credits to date.The most popular VCM project types
There are various types of carbon offsetting projects that either reduce or remove CO₂ from the atmosphere through nature-based or engineered solutions. These range from renewable energy and household device projects to those involved in energy efficiency and waste disposal. The most common VCM carbon credits on the market, however, come from forestry and land use projects. REDD+ projects, which aim to curb climate change by preventing deforestation, make up the majority of transactions in this category, with almost 500 million of these offsets cumulatively issued worldwide as of April 2025. REDD+ credits are one of the cheapest options to offset emissions, with prices averaging just six USD/tCO₂ in 2024.Although nature-based projects are the most common offsetting strategies, engineered carbon dioxide removal (CDR) solutions are growing in demand. Many major companies are investing heavily in these technologies. Microsoft, in particular, is a key driver of CDR technology growth, having purchased more than 22 million CDR credits to offset its carbon emissions to date.
Controversies surrounding carbon offsets
Unlike compliance-based carbon pricing markets, such as the EU ETS, VCMs are not regulated by governments and therefore often lack transparency. This has led to increasing scrutiny within the market over the quality of carbon credits, especially with regard to REDD+ projects. Media reports have claimed that emission reductions from these schemes have been largely overstated. Such concerns have contributed to VCM transaction volumes plummeting by more than 80 percent since 2021. In fact, media publications are seen as the most important external factor influencing credit sales.The voluntary carbon market (VCM) has the potential to play a key role in combatting climate change. However, it must overcome several challenges to fulfil its potential, particularly with regard to trust issues. This will require urgent reforms, such as increasing federal regulation and assessing and ensuring the quality of carbon credits.
