Skip to content

Different ways to buy carbon credits

Are you looking to purchase carbon credits to reduce your carbon footprint but not sure how to do it? This article will will guide you through the buying process for carbon credits.

As the world progresses to Net Zero, more and more businesses are offsets their carbon footprint by making financial contributions to sustainable initiatives across the globe. What exactly is offset work and what are your options for carbon offsets?

What are carbon offsets? How can I do it? purchasing carbon credits?

Carbon offset refers to the process of buying carbon credits in the carbon market created by CO2 absorption initiatives, to offset an individual or business’s carbon emissions. The first step is to calculate the carbon footprint for your business. For example, suppose a company released 1,000 tonnes in greenhouse gas (GHG) during the course of a year. To reduce the carbon footprint, it would have to purchase 11,000 carbon credits of which is one ton of CO2-equivalent. This accounting method is a easy way to make sure that the earth doesn’t produce more than it absorbs and also provide crucial financing for carbon mitigation initiatives.

When you have a clear idea of your carbon footprint and have made changes such as shifting to renewable power or reducing the consumption of electricity to lower the amount, it’s now time to offset any remaining carbon emissions by buying carbon credits. What are good carbon credits? Or are they bad ones?

There are many ways to purchase carbon credits.

There are many options to purchase carbon credits in order to reduce your carbon footprint.

Purchase carbon credits direct from the developers

The easiest way to buy them is from the source, which is from the company that is that is responsible for the project you wish to help. In this scenario the company could invest in the advancement of the project, with the assurance of a returns in the form of future carbon credits, or purchase what is known as Emission Reduced Purchase Agreements (ERPAs) that are an upfront payment for carbon credits that are given in the event that they are created. This option is more prevalent in cases where the project is in the later stages of development.

There are two benefits to purchasing carbon credits direct from the developer of the project:

It lets you gain greater understanding of the project , and be involved in its management
You can get lower prices than an online retailer

However, this choice isn’t suitable for everyone.

It requires some amount of research and understanding to determine the most appropriate projects. It requires a certain amount of research and knowledge to identify suitable
Carbon credits aren’t immediately available once you buy the credits. They are not immediately available when you purchase

Carbon credits can be purchased through an intermediary

A lot of project developers collaborate with brokers to organize the selling the carbon credits they have. In this instance your company will connect with an agent and provide them with details about the kind of project you’re interested in (location and price.). The broker would locate an opportunity that you like then buy carbon credits on behalf of your company and sell them to you, with a mark-up.

This is more sensible than directly dealing with a project, especially in the case of a significant amount of carbon offsets. As an intermediary the broker is responsible for every carbon credit exchange transaction.

There are a few significant negatives to be considered:

Brokers do not disclose their pricing plans, meaning there is no way to know the cost of the carbon credit and the broker’s fees
In some instances brokers can charge businesses nearly three times what they charge project developers using their position as middlemen and destroying the objective of climate finance.

The Financial Times recently exposed just how the opaque carbon credit brokerages’ methods are. This is not a solution we suggest.