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Voluntary Carbon Markets and Offsetting

1. Outline

This report looks at the evidence on the risks and opportunities presented by voluntary carbon markets and ‘offsetting’ to progress to Net Zero in the UK and beyond. Voluntary carbon markets are markets where carbon credits are purchased, usually by organisations, for voluntary use rather than to comply with legally binding emissions reduction obligations. Voluntary carbon markets are growing, driven in part by demand from businesses looking to ‘offset’ their emissions.

2. Key messages

High-integrity carbon credits purchased by businesses can play a small but important role in supporting the transition to Net Zero. But before growing voluntary carbon markets, Government must put in place stronger guidance, regulation and standards to ensure purchase of carbon credits is not used as a substitute for direct business emissions reduction, and to improve the integrity and transparency of carbon credits. In the absence of these measures, there is a real risk that voluntary carbon markets slow progress towards Net Zero or damage other priorities such as climate adaptation and biodiversity.

We make three broad recommendations:

  1. Encourage businesses to support high integrity nature-based and biological solutions and engineered removals, while focussing on achieving direct business emissions reduction.
  2. Continue efforts to protect and raise the integrity of carbon credit projects, in the UK and globally, and to ensure voluntary carbon markets are resulting in lower overall global emissions and positive wider impacts.
  3. Support the modest but useful role voluntary carbon markets can play in the UK Net Zero pathway, in tandem with other measures.