Carbon credits are generated by projects that reduce greenhouse gas emissions or remove carbon dioxide from the atmosphere. One credit typically represents one metric ton of CO2 equivalent. Common project types include renewable energy, methane capture from landfills and farms, clean cooking stoves, reforestation, and biochar production. Major programs like Verra's Verified Carbon Standard recognize activities across 18 sectoral scopes, from energy and waste to forestry and engineered removals. The key distinction is between emissions reduction projects and carbon removal projects. Reductions avoid future emissions against a defined baseline, while removals pull existing CO2 out of the air. Renewable energy and clean cooking are reduction-focused, while reforestation and biochar are removal-focused. Buyers should check the methodology and additionality rules behind each project to understand what the credit actually represents.
