Carbon credits explained: what is one carbon credit?
What one carbon credit means, compliance vs voluntary markets, avoidance vs removal, additionality, permanence, registries, ICVCM labels and Article 6, in plain words.
What is one carbon credit?
One credit equals one tonne of CO2 equivalent. "Equivalent" means other greenhouse gases, such as methane, are converted into the amount of CO2 that would cause the same warming, using global warming potential (GWP) values published by the IPCC. Verra's Verified Carbon Standard, for example, requires the GWP values from the IPCC Fifth Assessment Report (AR5) for reductions from 1 January 2021 onwards (Verra VCS Program page, accessed 2026).
Each programme gives its credits a different name:
| Programme | Name of the unit | One unit equals |
|---|---|---|
| Verra Verified Carbon Standard (VCS) | Verified Carbon Unit (VCU) | 1 tCO2e reduced or removed |
| Gold Standard for the Global Goals | Gold Standard Verified Emission Reduction (VER) | 1 tCO2e |
| India's Carbon Credit Trading Scheme | Carbon Credit Certificate (CCC) | 1 tCO2e reduced, removed or avoided |
| Paris Agreement Article 6.4 mechanism | A6.4 Emission Reduction (A6.4ER) | 1 tCO2e |
A credit is not the same as a tree, a solar panel or a promise. It is a record that says: "this project, checked by this auditor, under this rulebook, achieved this tonne in this year."
Sources: Verra: Verified Carbon Standard (VCS) Program; Verra: First ICVCM CCP labels now active on the Verra Registry (2024); ICVCM: Core Carbon Principles; ICVCM: Integrity Council approves three cookstove methodologies among latest decisions (2025); Gold Standard for the Global Goals; UNFCCC: The Paris Agreement (2015), Article 6; Ministry of Power / Gazette: Carbon Credit Trading Scheme, 2023, S.O. 2825(E), 28 June 2023 (cited via BEE Detailed Procedure for Compliance Mechanism); CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026
This article was prepared with AI assistance and checked by the GreenEye team against the sources shown in each section.
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