Carbon Credits — Latest ESG & Sustainability News

Understanding the Types of Carbon Credits

Carbon credits come in three types: Reduction, Protection, and Removal. Reduction credits cut emissions at the source, like energy efficiency, but may shift emissions, limiting global impact. Protection credits preserve carbon sinks—forests and oceans—preventing new emissions, offsetting 200 million tons of CO2e in 2024, per Verra. Removal credits actively extract CO2 via direct air capture or reforestation, absorbing 150 million tons in 2024, per Global Forest Watch, offering high impact. Each type supports climate goals differently, helping stakeholders choose credits that balance immediate reductions with long-term atmospheric CO2 removal.

Forest Carbon Credits Are Stumbling: Can They Be Fixed?

Carbon Credits vs. RECs: Key Tools for Climate Action

Carbon Credits and RECs are essential climate tools with distinct roles. Carbon Credits, issued by registries like Verra, represent one metric ton of CO2e reduced, offsetting unavoidable emissions through projects like reforestation. RECs, issued by systems like Green-e, certify one MWh of renewable electricity, promoting clean energy markets. Companies use Credits to offset emissions (e.g., travel) and RECs to claim renewable energy usage (e.g., office electricity). While Credits directly cut emissions, RECs support renewable growth. Combining both helps firms meet net-zero goals, balancing direct reductions with clean energy adoption for broader impact.