There’s no shortage of voluntary carbon market standards and policies to keep track of in today’s market. From the United Nations Framework Convention on Climate Change’s (UNFCCC) Article 6.4 to the Integrity Council of the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles, carbon credit project developers are wrestling to understand what buyers care about and which standards they need to stay on top of to remain competitive, attract buyer attention, and ensure the highest standards of environmental and social integrity.
While adherence to some VCM guidance and policies is voluntary, many carbon credit buyers are searching for projects that align with certain industry standards, making it crucial for project developers to stay on top of VCM policy updates. For example a UK-based commercial real estate company may refer to the UK Green Building Council for guidance on offsetting and carbon credit purchases. VCM buyers’ growing preference for robust, standardized carbon credits reflects an emerging trend toward the reliance on objective data and analytics to justify a project’s selection. As voluntary and compliance markets increasingly converge, this trend not only underscores the importance of transparent, high-integrity frameworks — it also opens new distribution channels and roles for certain types of projects.. To stay ahead of buyer concerns and win in the VCM, here are five key standards and policies that project developers should keep track of:
- UNFCCC’s Article 6.4
- Integrity Council of the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCP)
- International Carbon Reduction and Offset Alliance (ICROA)
- European Union Carbon Removals and Carbon Farming Certification (CRCF) Regulation
- Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)
Understanding and keeping up with the latest voluntary carbon market standards and policies helps developers strategically position their projects, maximize their credibility, and unlock opportunities with sophisticated buyers seeking high-quality carbon credits. It also helps developers to more easily adapt to constantly-changing requirements, giving them a competitive advantage.
Understanding VCM standards: Past and present
The voluntary carbon market started to take shape in the 1990s — just as voluntary investments were launched in the first-ever ‘reducing emissions from deforestation and forest degradation in developing countries’ (REDD) projects. As interest in emissions offset projects piqued the interests of corporate buyers, the Environmental Defense Fund and the Environmental Resources Trust founded the world’s first carbon registry — now called the American Carbon Registry (ACR) — in 1997 to establish a transparent platform for registering verified, project-based emissions reductions and removals. Also in 1997, Plan Vivo Standard — the oldest voluntary carbon market standard — issued its first certificates for a carbon credit project in Mexico. In the earlier days, ACR’s approach to quantifying impact was advanced for its time, involving tracking emissions reductions in terms of metric tons of carbon dioxide equivalent (tCO2e). On the other hand, Plan Vivo initially focused on community- and ecosystem-driven approaches. The development of the ACR and the first VCM standard signalled greater buyer confidence in the carbon markets, as well as a greater appetite for standardization.
Along with the ratification of the Kyoto Protocol, which operationalized the UNFCCC, the 2000s saw greater demand for carbon offsets and the emergence of other carbon registries and standards, including Gold Standard, Climate Action Reserve, and the Verified Carbon Standard. During this time, these standards have continued to evolve to address quality concerns and align with emerging requirements to signal environmental integrity.. At the same time, greater media attention is also being paid to the quality and integrity of voluntary carbon credits, resulting in greater market scrutiny. “To be able to please a wide range of stakeholders, there needed to be more stringent standards on what is and is not a carbon credit,” says Mark Goldman, Climate Science Lead at Cloverly. “That’s why the focus has shifted to looking at key quality pillars, such as what projects are most evidently additional and have the most obvious permanence.”
In recent years, there’s also been signals of convergence between the voluntary and compliance markets, as well as across industries. This has been partly driven by the desire to develop more quality offsets in the VCM, which has also resulted in standard-setters and policymakers focusing on carbon credit project integrity. In the future, these shifts may result in price premiums for carbon credits that are aligned with specific requirements — like CORSIA or Article 6.4 — while projects that cannot access buyers under these markets may have fewer demand channels. “We might see the VCM operating at two speeds. For example, there may be higher procurement demand by airlines for CORSIA-eligible credits,” says Callum Hunt, Climate Solutions Lead at Cloverly. “VCM projects siloed from interchangeability under such frameworks may end up with a different perception around credit quality and face reduced demand dynamics.”
5 key voluntary carbon market standards to keep track of
As buyers demand trustworthy offsets, there are several voluntary carbon market standards and policies that project developers need to stay on top of to maintain relevance and competitiveness.
- UNFCCC’s Article 6.4
At the UN’s 2024 Climate Change Conference (COP29), hosted in Azerbaijan, negotiators approved the UNFCCC’s Article 6.4, which establishes a centralized framework for an international carbon market and supports the trade of carbon credits under the oversight of a supervisory body. The approval of Article 6.4 is expected to heavily influence the VCM by enacting requirements for developers before their carbon credit projects hit the market. Under Article 6.4, credits will be thoroughly validated before they’re issued and protected against double-counting risks.
The approval of Article 6.4 marks the first step toward a centralized system, outlining guidelines for approval of specific methodologies that will be able to issue credits under Article 6.4. The mechanism also has the potential to trigger greater investment in carbon dioxide removal (CDR) projects, elevate demand in the VCM, and allow for the voluntary market’s formal alignment with standards that conform with Article 6.4, including the ICVCM’s CCPs. Article 6.4 is a key policy for project developers to keep track of because it addresses buyers' concerns about double-counting and may drive greater VCM demand by reducing the risk of inconsistencies between corporate and national emissions inventory accounting frameworks..
- ICVCM’s Core Carbon Principles
In November 2024, the ICVCM announced it approved three methodologies for issuing high-quality carbon credits for REDD+ projects. The new methodologies are expected to start issuing shortly, with REDD+ credits expected to be tagged with the Core Carbon Principles (CCPs) label from early 2025 onward. The ICVCM’s 10 CCPs were established in 2023 to set an independent global standard of quality and integrity in the VCM. They fall into three categories — governance, emissions impact, and sustainable development — and touch on several key points, including transparency, third-party validation, additionality, permanence, and more.
While alignment with the CCPs is determined by a developer’s methodology choice, projects with the CCP label, will be easier for buyers to assess the impact of certain carbon credit projects and initiatives. Moreover, the CCPs build on measures of the UNFCCC’s Article 6 as the ICVCM is committed to “aligning with or exceeding” its guidance. For claims made in conjunction with the Voluntary Carbon Markets Integrity Initiative on or after January 1, 2026, companies must transition to buying and retiring CPP-approved credits.
- International Carbon Reduction and Offset Alliance
In November 2024, the International Carbon Reduction and Offset Alliance (ICROA) recommended that crediting programs looking to be ICROA-endorsed connect to the Climate Action Data Trust — a decentralized platform that aggregates all major carbon registry data — to increase global VCM transparency and integrity. Some of the latest standards to be endorsed by ICROA include Riverse — which is focused on European tech circular economy projects — as well as Carbon Standards International and Isometric, both of which have conditional endorsements.
ICROA was set up in 2008 to support carbon management best practices and the use of high-quality carbon credits. Today, its Code of Best Practices aims to define international best practices in the VCM and represents the minimum requirements that all organizations accredited by ICROA must meet. Project developers can voluntarily apply to become accredited by ICROA. Those who do may see greater credit demand from buyers requesting ICROA-accredited projects.
- EU Carbon Removals and Carbon Farming Certification Regulation
In November 2024, the EU Council gave its final stamp of approval to the Carbon Removals and Carbon Farming Certification (CRCF) regulation, creating a voluntary EU-wide framework for certifying carbon removal, farming, and storage projects. It’s meant to facilitate investment in carbon removal and farming solutions, address greenwashing, and accelerate third-party verification and certification processes.
The approval of the CRCF is a significant step forward when it comes to establishing high-quality standards for both permanent and temporary carbon removals in the EU. It also will help to foster transparency and trust in the evolving EU carbon removal market. Once fully implemented, aligning with the CRCF regulation can help enhance their credibility, increase project demand, and ensure compliance if the rule is made mandatory.
- Carbon Offsetting and Reduction Scheme for International Aviation
In September 2024, the East African country Comoros announced its voluntary participation in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), marking a total of 129 states that will voluntarily participate in the policy framework for 2025. CORSIA is the first international, industry-specific measure for reducing emissions. It’s meant to help lead the move away from fragmented VCM regulatory initiatives and standards and will require airlines and aircraft operators to stabilize the aviation industry’s emissions at 2020 levels and reduce net emissions to half their 2005 levels by 2050.
CORSIA is being implemented in three phases — the first two of which are voluntary. For the final phase beginning in 2027, participation will be determined based on revenue tonne-kilometers data. Project developers should stay on top of CORSIA updates since many corporate buyers in the aviation industry will be looking for projects aligned with the standard in the coming years.
Staying on top of the VCM’s evolving standards
Keeping up with changing voluntary carbon market standards and policies can be challenging for project developers — especially since there are near-constant updates to keep track of and fragmented guidance that may sometimes conflict with other recommendations. At the same time, project developers must grapple with managing all the necessary documentation and understanding the policy requirements across different industries and jurisdictions. “As regulations define stricter, and potentially diverging, requirements, it could become more challenging for developers to identify what information they need to gather to demonstrate alignment. For example, meeting new additionality and monitoring, reporting, and verification requirements, as well as justifying their buffer contribution or permanence claims,” Hunt says. “The fundamental point of it is balancing project implementation with those requirements and ensuring that you have integrity.”
To ensure they’re on top of the latest updates, project developers can follow announcements made by the International Emissions Trading Association, the UNFCCC, and other carbon credit registries. They can also reach out to VCM experts, like Cloverly, to understand what’s happening in the market. Staying on top of the latest voluntary carbon market standards and policies is essential for developers that want to demonstrate the integrity of their projects, increase demand, and win in the market.
Using policy to your advantage
While staying on top of voluntary carbon market standards can be challenging, those that do reduce their financial and reputational risks and open themselves up to first mover advantages. For example, keeping track of the relevant policies and standards allows project developers to more easily adapt to ever-evolving requirements, putting them ahead of competitors that are struggling to align their project designs with what’s required.
Additionally, the fragmentation between voluntary and compliance markets, paired with different national carbon pricing schemes, could create arbitrage opportunities for developers. Projects that meet both voluntary and compliance standards could be evaluated for their value in each market, allowing developers to strategically choose where to sell credits based on pricing and demand.
If there’s any standards or policies that contradict one another, it’s important for project developers to understand integrity considerations and look at the demand side of the market to see how buyers are responding. “Project developers are experts of the field that they’re operating in, and they know what is and is not a quality project,” Goldman says. “They can be the arbitrators of quality in that sense, and they are the ones who will ultimately inform ICVCM or a UN ruling on what are good standards and what are not good standards.”
Learn more about voluntary carbon market standards
Cloverly’s purpose-built software helps project developers win deals by simplifying carbon credit management, enabling omni-channel sales distribution, and acting as a single source of truth for buyer interactions. Are you looking to align your carbon credit project with emerging standards and regulatory policies to build trust and credibility in the market? Talk to our team to learn how.
