What a Carbon Credit Actually Is
A plain-language explanation of carbon credits, how registries such as Gold Standard and Verra work, what vintages mean, and the difference between purchasing and retiring a credit.
The one-sentence definition
A carbon credit is a tradeable certificate representing one tonne of carbon dioxide equivalent (CO2e) that has been either avoided, reduced, or removed from the atmosphere by a specific project. Buy one credit, and you hold a claim to one tonne of climate benefit.
The word "equivalent" matters. Greenhouse gases other than carbon dioxide (methane, nitrous oxide, and others) are converted into a common CO2e figure using their warming potential, so a single unit can represent the impact of any greenhouse gas.
Where credits come from: the registries
Credits do not appear out of thin air. They are issued by registries: independent bodies that set the rules, review projects, and record every credit in a public ledger. CarbSet lists credits sourced from two of the most established registries.
- Gold Standard: Founded with backing from environmental organisations, it places heavy emphasis on sustainable development and community co-benefits alongside carbon.
- Verra: Operator of the Verified Carbon Standard (VCS), the largest voluntary programme by issued volume, covering forestry, renewable energy, cookstoves, and more.
A registry does four things: it approves the methodology a project uses to measure its impact, it reviews the project's evidence, it issues credits with unique serial numbers, and it retires those credits when they are cancelled. The serial number is the credit's fingerprint. It ties a credit back to a named project, a country, a methodology, and a year.
CarbSet is not a registry. We do not issue or certify credits. We list credits that registries have already issued, and we add a quality assessment on top so you can compare like with like.
All quality assessments on CarbSet are currently provisional. This means scores have not yet been independently verified by an external assessor. A Provisional badge is shown wherever a grade appears.
Vintages: the year the impact happened
Every credit carries a vintage, which is the calendar year in which the emission reduction or removal actually occurred. A 2023 vintage credit represents a tonne of CO2e that was avoided or removed during 2023.
Vintage is not the same as the year you buy the credit. Older vintages are sometimes cheaper but may face more scrutiny, because market expectations of quality have tightened over time. Newer vintages tend to reflect current methodologies. When you compare two credits, always check the vintage alongside the price and the grade.
Purchased versus retired: the difference that defines your claim
This distinction is the single most important thing to understand before you make an environmental claim.
| State | What it means | What you can say |
|---|---|---|
| Purchased | You have bought the credit and hold it. It still exists on the registry under your ownership. | You own credits. You cannot yet claim to have offset anything. |
| Retired | The credit has been permanently cancelled on the registry so no one can ever use it again. | You have offset the corresponding tonnes. The claim is now valid. |
Retirement is the act that turns ownership into an offset. A credit can only be retired once. Until you retire a credit, you have simply bought an asset, in the same way that owning a share is not the same as spending the proceeds.
On CarbSet, your certificate and any embeddable badge always show the true state. A certificate for purchased-but-not-retired credits will never use language implying retirement. This protects you from making a claim you cannot support.
Where to go next
- To understand how we grade credit quality across five dimensions, read Understanding quality scoring.
- For definitions of every term used across the platform, see the Glossary.