Carbon Credit Glossary: Terms for Buyers, Sellers and Airlines

This glossary covers the words that come up on our listings, in seller paperwork and in airline compliance work. Each entry is kept short, with a link where we have a fuller guide. Terms are grouped by theme so related ideas sit together.

The basics

Carbon credit. A tradable unit representing one tonne of carbon dioxide equivalent that has been kept out of, or taken out of, the atmosphere by a specific project.

tCO₂e (tonne of carbon dioxide equivalent). The common measure for greenhouse gases. Other gases, such as methane, are converted to the amount of CO₂ that would cause the same warming.

Voluntary carbon market. Buying and retiring credits by choice, for example to support a company's climate goal, rather than to meet a legal duty.

Compliance market. A market where buying units is required by law or regulation. CORSIA and national schemes fall here.

Offsetting. Using retired credits to balance emissions a buyer has not yet been able to cut.

Project types

Removal. A project that takes CO₂ out of the air and stores it, such as new forest or mangrove planting. See forestry and agroforestry credits.

Reduction. A project that lowers emissions compared with what would otherwise happen, such as a factory capturing waste heat.

Avoidance. A project that prevents emissions that were expected to occur, such as protecting a forest under threat or replacing coal-fired power with solar.

Blue carbon. Carbon held in coastal and marine ecosystems, chiefly mangroves, seagrass and salt marsh. See blue carbon credits.

Biogas. Gas from the breakdown of organic waste, which can be captured and burned for energy instead of escaping as methane. See waste and biogas credits.

Improved cookstove. A more efficient household stove that burns less wood or charcoal. See agriculture and cookstove credits.

fNRB (fraction of non-renewable biomass). The share of wood use that is not being replaced by regrowth. It drives how many credits a cookstove project earns.

Grid emission factor. The average CO₂ released per unit of electricity on a given power grid, used to work out savings from renewable projects. See renewable energy credits.

Quality tests

Additionality. The test of whether the project would have happened anyway. Credits only make sense if the carbon revenue made the difference. See additionality, permanence and leakage.

Baseline. The emissions that would have occurred without the project. Credits are measured against it.

Permanence. How long the stored or avoided carbon stays out of the atmosphere. A concern mainly for forests and soils, which can burn or be cleared.

Leakage. Emissions pushed elsewhere by the project, such as logging moving to the next valley when one forest is protected.

Buffer pool. A reserve of credits set aside from many projects to cover losses if stored carbon is later released.

Co-benefits. Gains beyond carbon, such as cleaner air, jobs or water supply. See SDGs and co-benefits.

SDGs (Sustainable Development Goals). The seventeen UN goals. Listings show which ones a project supports.

Double counting. The same tonne being claimed by more than one party or target.

Standards and documents

Standard (crediting programme). The organisation that sets rules for projects and issues credits. Examples include Verra, Gold Standard and Global Carbon Council. See carbon standards compared.

VCS (Verified Carbon Standard). Verra's main programme. Its credits are called VCUs, verified carbon units.

Methodology. The approved rulebook for a project type, setting out how to set the baseline, monitor results and count reductions.

PDD (Project Design Document). The founding description of a project: location, technology, methodology, baseline and monitoring plan.

Validation. An independent check, before a project starts earning credits, that its design meets the standard.

Verification. A periodic independent check that the claimed reductions actually happened, which leads to issuance.

MRV (monitoring, reporting and verification). The cycle of measuring results, writing them up and having them checked. Used for both projects and airlines.

See project documents buyers receive for what each paper should show.

Registries and transactions

Registry. The official database where credits are issued, held, moved and retired. It, not any seller, is the record of ownership. See registries and serial numbers.

Registry ID. The number a registry gives a project. Use it to look the project up yourself.

Serial number. The unique code for each credit or block of credits, so no tonne can be used twice.

Issuance. The moment a registry creates credits after a successful verification.

Retirement. Permanently taking a credit out of circulation so its benefit can be claimed. See retirement certificates explained.

Cancellation. In CORSIA, removing units against an airline's obligation. Often used interchangeably with retirement.

Beneficiary. The organisation named on a retirement as the one claiming the credit.

Retirement certificate. The registry document confirming a retirement, its serial numbers and beneficiary.

Buying and selling

Vintage. The year the reduction or removal took place. See choosing vintage and volume.

Lot. A defined quantity of credits from one project and vintage, offered at one price.

Spot. Credits already issued and ready to deliver now.

Issued. Credits that exist on the registry; delivery timing is agreed case by case.

Forward. Credits expected from future verification, sold before they exist. See spot, issued and forward credits.

Offtake agreement. A contract to buy a project's future credits over a period. See forward sales and offtake agreements.

Indicative price. A per-tonne price shown for guidance, firm only once confirmed in writing. See how carbon credit prices are quoted.

Due diligence. The checks a buyer runs on a project, its documents and the seller before paying. See what buyers check before buying.

Aggregator. A business that bundles many small projects or sellers into larger lots.

CORSIA and international rules

CORSIA. ICAO's carbon offsetting and reduction scheme for international aviation, adopted in 2016. See CORSIA explained for airlines.

ICAO. The UN agency for civil aviation, which runs CORSIA. Official material is on icao.int.

DGCA. India's Directorate General of Civil Aviation, the national authority for Indian operators under CORSIA.

MTOM (maximum take-off mass). The certified top weight for take-off. Only aeroplanes above 5,700 kg are counted.

Emissions monitoring plan. An airline's approved description of how it will measure fuel and CO₂.

Offsetting requirement. The volume of units an airline must cancel for a compliance period. Try our calculator.

Growth factor. The figure ICAO publishes to translate an airline's emissions into its share of sector growth.

Compliance period. The block of years over which offsetting is totalled and settled. See the compliance calendar.

CORSIA-eligible unit. A unit from an approved programme, in the right vintage window, with any required authorisation. See the eligible units checklist.

CORSIA eligible fuel. Sustainable or lower-carbon aviation fuel whose savings can be deducted from the offsetting requirement.

Article 6. The part of the Paris Agreement that lets countries cooperate, including by trading emission reductions.

Host-country authorisation. A government's formal approval for credits from its territory to be used abroad or in schemes like CORSIA.

Corresponding adjustment. The accounting entry a host country makes so an exported tonne no longer counts towards its own target. See corresponding adjustments made simple.

CCTS (Carbon Credit Trading Scheme). India's national carbon market framework, which covers certain industrial sectors.

Missing a term you came across on a listing? Ask us through the contact page, or browse the full knowledge base for the longer guides.