Market Overview: The Future Of Voluntary Carbon Markets

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Executive Summary

The voluntary carbon market has become re-energized in recent years, as ESG climbs to the top of the corporate agenda. Historically, the market was limited in size and undermined by a lack of confidence in the suitability of voluntary credits as a mechanism for decarbonization. Agreement on Article 6 at COP26 in 2021 has reawakened the market, with the value topping $1 billion in 2021. This report charts the development of the voluntary carbon market, examines the impact of Article 6 and identifies key corporate trends that will shape the market in the years to come. Executives should use this report to inform decarbonization strategies and better understand the current and future path of the voluntary carbon market.

Table of contents

Voluntary Carbon Markets Historically Failed To Gain Critical Mass 
Self-Regulation Enabled Creativity 
Uncertainty Has Inhibited The Scalability Of Voluntary Carbon Markets
New Market Drivers Have Dramatically Increased The Price Of Voluntary Credits 

COP26 Agreement On Article 6 Points Carbon Markets In A New Direction 
Article 6.4 Is A New Mechanism For Mitigation And Sustainable Development
Article 6.2 Creates A Cooperative Carbon Accounting Methodology
Voluntary Market Participants Have Reacted Positively With Innovation And Investment

Market Infrastructure Will Get A Makeover As Larger Players Move In 
Carbon Credit Trading Platforms Bring Price Transparency And Lower Cost Transactions
Technology Solutions To Enhance Transparency And Trust In Carbon Credit Projects 
Carbon Credits Are Becoming Integrated Into Carbon Management Financial Decisions

Net Zero And Energy Transition Strategies Will Determine The Shape Of Future Demand 
Consumer Industries Signal Mixed Demand For Carbon Credits To Meet Different Purposes 
Financial Institutions Launch A Variety Of Carbon Credit Strategies
Emissions-Intensive Sectors Indicate Intention To Buy Large Volumes Of Credits  

Table of figures

Figure 1. Glossary Of Terms 
Figure 2. Carbon Credit Types 
Figure 3. Voluntary Carbon Credit Life Cycle And Purchase Options 
Figure 4. Carbon Credit Purchase Case Studies 

About the authors

Connor Taylor

Senior Analyst
Connor is a Senior Analyst in the Verdantix Net Zero & Climate Risk practice. His current research agenda focuses on carbon management software, climate change consulting services, and the voluntary carbon markets. Connor joined Verdantix in 2021, with prior experience in EHS technology sales and development. He holds a BA from the University of Cambridge in Anglo-Saxon, Norse and Celtic.

Alessandra Leggieri

Industry Analyst
Alessandra Leggieri is an Industry Analyst in the Verdantix Net Zero & Climate Risk practice. Her current research agenda focuses on solutions for GHG emissions and net zero management, covering technologies and services. Prior to joining Verdantix, Alessandra completed an MSc in Environmental Technology at Imperial College London.

Kim Knickle

Research Director, ESG & Sustainability
Kimberly Knickle is Research Director of the ESG & Sustainability practice at Verdantix. Her research areas encompass ESG regulations and reporting, ESG risk, supply chain sustainability, circular economy, social impact, and sustainable finance. Kim has worked for more than 20 years in the IT industry, providing research and analysis to help companies invest wisely in new technologies. Before joining the analyst industry, she held various roles in IT services, engineering and product safety testing, beginning her career at Underwriters Laboratories, Inc. Kim holds an MBA from Boston University and a BS in Electrical Engineering from Cornell.

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