The forest carbon market explained simply: what a credit is, and how it is measured, audited and issued.
Simple. Concrete. Verifiable.
A carbon credit represents the reduction or sequestration of one tonne of CO₂ from the atmosphere. When a forest is preserved or replanted, it absorbs CO₂. That absorption — measured, audited and certified — generates credits that companies can use to offset their emissions. It is a market mechanism in the service of the climate.
Concretely, when a forest project proves it has sequestered or avoided the emission of X tonnes of CO₂, it receives X credits, each identified by a unique serial number recorded on a public registry.
These credits can be bought, retired (used once and for all) or traded. Traceability is complete.
Emissions build up in the atmosphere and warm the climate.
Planted trees sequester carbon in their biomass, year after year.
Satellites, field inventories, then validation by an independent auditor (VVB).
Each verified tonne becomes a credit, with a unique serial number on the public registry.
It buys and retires the credit to offset its unavoidable emissions.
Not all credits are equal
| Code | Type | Description | Duration (yrs) |
|---|---|---|---|
| ARR | Afforestation / Reforestation | Planting new forests on land long unforested. Active CO₂ sequestration. | 30–40 |
| REDD+ | Avoided deforestation | Protecting existing forests threatened by deforestation. Avoids the emission of stored carbon. | 20–30 |
| IFM | Improved forest management | Improving management practices on harvested forests to increase the carbon stock. | 20–40 |
| Cookstove | Improved cookstoves | Distributing low-consumption stoves to reduce wood harvesting and emissions. | 7–10 |
GTZ focuses on the ARR category — afforestation and reforestation.
Companies and individuals buy credits as part of CSR commitments or climate strategy. No legal obligation. Main standards: Gold Standard, Verra. GTZ has chosen Gold Standard exclusively for the rigour of its methodological framework.
Actors subject to legal quotas (aviation, industry). Volume and value growing fast. CORSIA Phase 2 starts in 2027.
The IPCC is unambiguous: limiting warming to 1.5°C requires both a drastic reduction in emissions and massive CO₂ removal. Forests are today our leading carbon-capture technology — operational, at scale, and co-beneficial for biodiversity and people.
Without forest carbon credits, financing this removal at the required scale is simply impossible. It is an imperfect mechanism, but today it is the only one that works.
One tonne of CO₂ roughly equals the emissions of a Paris–New York flight in economy class, or six months of heating for an average European home. It is the reference unit of the carbon market.
Any company or organisation can buy credits on the voluntary market, typically as part of a climate strategy or CSR commitments. Actors subject to regulatory obligations (airlines under CORSIA, for example) buy eligible credits on the compliance market.
Three markers: a demanding certification standard (Gold Standard), an audit by an accredited independent third party (VVB), and registration on a public registry with a unique serial number. Quality labels such as the Core Carbon Principles (ICVCM) add a further layer of assurance.
Offsetting claims the neutralisation of an emission through a retired credit. Contribution funds climate action without a neutrality claim. The market is trending toward the more rigorous language of contribution, especially for companies following SBTi guidance.
Double counting occurs when the same tonne of CO₂ is claimed by two parties — for example by the company buying the credit and by the host country in its national inventory. The Article 6 mechanisms of the Paris Agreement (corresponding adjustments) are designed precisely to prevent it.
They are a transition mechanism: they fund CO₂ removal while the economy decarbonises. In the long run, the priority remains cutting emissions at source. But removal capacity — forests first — will be needed in every IPCC scenario compatible with 1.5°C.
