As the world accelerates toward net-zero goals, all businesses, from small and medium-sized enterprises (SMEs) to the biggest corporations, through their sustainability officers, are exploring practical solutions to reduce their carbon footprints. Among the most promising tools available are carbon units (widely known as carbon credits), which allow companies to balance their footprint by supporting projects that reduce or remove carbon dioxide from the atmosphere.
A close-up of a happy farmer standing in his orchard next to an avocado tree. Hongera Reforestation Project, DGB.
One of the most important—and often misunderstood—components of this strategy is carbon pricing. In the dynamic world of voluntary carbon markets, understanding how the price of carbon units is determined can empower businesses to make more informed decisions. Unlike fixed compliance markets, voluntary carbon markets operate on flexible mechanisms shaped by project quality, demand, location, and the structure of the transaction itself.
This guide offers clarity. We break down the differences between carbon credit spot price and carbon credit forward pricing, examine the influence of carbon unit quality, and explain the roles of carbon credit buyers and credits from projects across various sectors. Whether you're building a long-term carbon offset programme, addressing unavoidable emissions, or looking to generate carbon credit revenue through participation in verified initiatives, understanding these fundamentals is key.
We’ll explore how to assess the true value of a tonne of carbon dioxide, navigate the carbon credit market, and make smart, strategic purchases of carbon units. With a focus on integrity, impact, and foresight, this article equips you to maximise both your investment and your company’s environmental impact through the purchase of carbon units—whether via the secondary market or forward agreements.
Let’s dive into how to price, plan, and procure your role in the transition to a low-carbon future.
What is a carbon credit?
A carbon unit represents a measurable, verifiable reduction in greenhouse gas emissions, equivalent to 1 tonne of carbon dioxide or its equivalent in other gases. These credits are generated by certified carbon offset projects that either remove CO2 from the atmosphere or prevent it from being emitted in the first place. Examples include nature-based solutions such as afforestation, reforestation, agroforestry, and energy-efficient cookstoves, or renewable energy projects or energy efficiency projects that reduce fuel use.
A cookstove factory. Hongera Energy Efficient Cookstoves Project, DGB.
In the context of voluntary carbon markets, these credits serve as a flexible and scalable tool for businesses to take responsibility for their carbon footprints and offset unavoidable emissions.
Read more: Carbon project financing: why carbon finance is the smartest bet for future-proof investing
Revenue from the sale of carbon credits becomes vital funding for carbon projects, which deliver community co-benefits such as employment opportunities and educational and health services. Carbon credit revenue helps scale projects, enhance verification systems, and extend benefits to more people and ecosystems. The purchase of carbon credits thus plays a crucial role not just in emissions reduction, but in enabling broader sustainable development goals.
How carbon credit prices vary by project type and region
Understanding why carbon prices differ across project types and geographies is vital for any organisation trying to manage its carbon footprint cost-effectively. In voluntary carbon markets, pricing is influenced by the nature of the carbon offset project, the location, associated co-benefits, and the credibility of the project developer behind it.
Retirement volumes over the past 5 years show sustained concentration in a few project types, highlighting how supply trends influence price differences across project types and regions.
Project type drives value
Not all projects are the same quality or have additional benefits beyond carbon mitigation. Credits from carbon removal projects—such as reforestation or biochar—typically command a higher average price than those from emissions avoidance projects like renewable energy or methane capture. This is because carbon removals physically extract carbon dioxide from the atmosphere, providing a measurable and often permanent benefit to global carbon emissions reduction. They also often have many co-benefits, like job creation and biodiversity restoration.
Read more: DGB’s cookstove projects: How they truly make a difference
Conversely, credits from older or less rigorous projects, especially those with outdated technical specifications, might be available at a lower cost—but they often carry greater uncertainty and reputational risk for the buyer.
Geography matters
Where a carbon offset project is located significantly impacts its pricing. Regional factors such as infrastructure, political stability, and access to forestland or agricultural land all affect a project’s implementation cost and risk profile—and therefore its credit value.
Moreover, countries with ambitious carbon taxes or domestic emissions trading systems may see a spillover effect in their voluntary carbon markets, as corporations look for more cost-efficient alternatives to meet internal emission targets or align with national environmental frameworks.
Read more: Why we need to restore high-priority areas like Africa
Other factors
Beyond project type and region, a range of more technical variables contribute to how carbon credit prices are determined in the market. Additionally, high-quality credits generated from projects with stringent verification standards, robust monitoring, and clearly demonstrated environmental impact are more desirable to carbon credit buyers.
The vintage year, meaning the year the respective carbon unit was created, plays a significant role. Credits from more recent vintages often carry a slight premium, as the market perception is inclined to favour them.
Certification standards also influence pricing. Credits issued under rigorous, third-party verified frameworks like Gold Standard or Verra typically command higher prices due to stronger methodologies, oversight, and buyer confidence.
The co-benefits associated with a credit—such as enhanced biodiversity, community health, or water quality improvements—can further increase value. Buyers increasingly prioritise high-quality credits that demonstrate both environmental and social return on investment.
Finally, transaction structure matters. Whether credits are purchased on the secondary market, through forward contracts, or bundled in a portfolio, the pricing can shift based on volume, timing, and negotiation terms.
A clear understanding of how carbon credit prices vary by project type and region helps buyers select credits that align with both their budget and sustainability priorities.
How carbon credit pricing works
Understanding the mechanics behind carbon credit pricing is essential for any business considering a carbon offset program. In the voluntary carbon market, prices are shaped by numerous variables—not dictated by a central authority. That means every carbon credit purchase is a reflection of a unique set of circumstances tied to the specific carbon offset project, its quality, and the structure of the transaction.
Read more: Cracking the code of carbon pricing: How does it work?
Voluntary vs compliance markets
While compliance markets are regulated and involve mandatory participation (like the EU Emissions Trading System), voluntary carbon markets are open to any organisation choosing to compensate for their environmental footprint. Here, the price of carbon credits is far more fluid. Voluntary markets accounted for roughly 80% of global credit demand in 2024, with 176 million credits retired across registries.
For instance, 1 tonne of CO2 offset might be priced at $5 from one project and $25 from another. Why? Because price is influenced by multiple factors: project type, verification standard, vintage year, location, and associated co-benefits. A renewable energy project in India might offer lower-cost credits, while a reforestation effort with strong sustainable development benefits and risk mitigation measures in Kenya could command a premium due to higher carbon credit quality and impact. Buyers typically paid around $5 more per rating band for higher-rated ARR (Afforestation, Reforestation, and Revegetation) projects, based on 2024 data.
The role of project quality and co-benefits
Carbon credit buyers are increasingly seeking high-quality carbon credits that guarantee permanence, additionality, and verifiability. These often come from individual projects with robust methodologies, transparent reporting, and safeguards like a buffer pool or buffer reserve contributions to address the risk of reversibility. Over 55%–60% of credits retired in recent years have been rated by third parties like Sylvera, indicating a market-wide shift toward rating transparency and credibility.
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Projects that also deliver wider environmental impacts fetch higher prices and are more in demand. In fact, co-benefits are becoming a strategic differentiator for buyers of carbon credits who are under pressure to demonstrate both environmental responsibility and social value. Carbon credits that are certified to deliver additional environmental and social benefits—such as biodiversity conservation, community development, or clean water access—command a significant price premium. According to Ecosystem Marketplace's 2023 report, credits from projects with at least one co-benefit certification had a 78% higher price compared to those without such certifications
Reports show that nature-based compensation units are forecasted to show the greatest increase in the coming years. (Source: https://www.senken.io/academy/pricing-of-carbon-credits)
Other drivers affecting the price of carbon credits include the absence of carbon credit supply in specific sectors, competition in the secondary market, and even the current practices of crediting programmes and their administrative structures. The maturity of the carbon credit market, ease of carbon credit transactions, and availability of futures contracts all contribute to price volatility or stability over time. Despite growing use of pre-purchase agreements, the spot market remains dominant—though still highly fragmented and opaque.
In essence, carbon credit pricing isn’t a fixed number—it’s a reflection of the trust, transparency, and tangible benefits of the carbon offset project behind it.
Spot vs forward pricing
When planning a carbon strategy, understanding the difference between carbon credit spot price vs carbon credit forward pricing is essential for budgeting, strategy, and risk management. These two pricing mechanisms offer different benefits, structures, and implications for carbon credit buyers, especially those managing a growing portfolio of carbon unit purchases.
Carbon credit spot price
The carbon credit spot price refers to the current market rate for credits that are available for immediate delivery and retirement. These credits have already been verified and issued by a recognised carbon crediting programme, and they represent emissions reductions or removals that have already occurred.
Read more: Carbon pricing: global solutions for a global challenge
For many buyers of carbon credits, particularly those offsetting actual emissions from the past year, spot credits are a straightforward solution. Once purchased, these credits can be promptly retired, making them ideal for immediate carbon credit transactions with a high degree of certainty. They also reduce exposure to the risk of project failure, as the environmental benefit has already been achieved.
However, because spot purchases are tied to the current carbon credit market, prices can fluctuate based on availability, seasonal demand, and the reputation of the carbon offset project. For example, a surge in demand for higher-quality carbon credits with verifiable co-benefits—such as those improving access to community health or protecting water quality—can drive up prices on the secondary market.
Carbon credit forward pricing
By contrast, carbon credit forward pricing involves securing credits before they are issued—often while the carbon offset project is still under development or in its early phases. In this setup, carbon credit buyers commit today to a future purchase of carbon credits at a predetermined price, often through futures contracts or similar legal contracts. This approach is particularly appealing for businesses aiming to lock in pricing and plan for long-term emission targets.
One key benefit of forward purchases is that they help stabilise cost forecasts for a carbon project and often come with an agreed-upon discount, protecting against future price hikes. This is especially useful for companies anticipating growth in unavoidable emissions or preparing for potential reduction mandates.
However, forward credits come with specific potential risks, including the risk of reversals, natural disturbance risks, and even double claiming if not properly managed. To address these, most credible projects include mechanisms such as a buffer reserve, buffer reserve credits, or a common buffer reserve—pooled safeguards that provide a minimum guarantee against loss or invalidation.
Ultimately, forward pricing supports the early financing of nature-based solutions, offering critical carbon credit revenue to projects. It’s a strategic choice for those willing to take on some aspect of risk in exchange for greater long-term security, cost benefits, and access to unique individual carbon credits.
Forward carbon credits vs spot credits: which is better for your business?
Choosing between forward carbon credits and spot purchases isn’t about finding the 'best' option universally—it’s about aligning your strategy with your company’s risk tolerance, cash flow, and sustainability roadmap. Both options can play an important role in a resilient, effective carbon offset programme.
Spot credits: flexibility and certainty
Spot credits are ideal for companies seeking quick results with low complexity. When a business purchases units at the carbon credit spot price, they’re buying verified reductions or removals that have already occurred. These credits can immediately be retired to address actual emissions, making them suitable for annual reporting cycles or meeting short-term emission targets.
Spot purchases are especially attractive to SMEs with limited forecasting capacity or those offsetting smaller volumes of CO2. They also have less risk, making them a valuable tool for demonstrating action and impact—without the wait.
Read more: SME carbon footprints: a practical guide
However, relying solely on spot credits may expose carbon credit buyers to market volatility and high spot prices. Sudden shifts in the carbon credit market, limited availability of higher-quality carbon credits, or last-minute scarcity can drive up the price of carbon credits, particularly for in-demand project types like reforestation.
A tree nursery with young saplings in Kenya. Hongera Reforestation Project, DGB.
Forward credits: planning and price stability
In contrast, forward carbon credits offer a strategic way to secure future supply and lock in pricing advantages. These credits are agreed upon in advance, often years before delivery. While the CO2 removals or reductions have not yet happened, the contract guarantees future delivery.
This can be particularly useful for companies scaling up sustainability efforts or committing to multi-year emissions targets. With carbon credit forward pricing, businesses can protect themselves from unpredictable cost increases, ensuring that their carbon credit purchases remain financially viable over time.
Read more: High-quality carbon credits vs regular carbon credits: what sets them apart?
That said, forward purchases come with inherent potential risks. Because the credits are tied to projected outcomes, there is always the risk of reversibility or delays in credit issuance. Mitigation tools—like buffer reserve contributions, robust project-specific risk assessments, and third-party insurance—are critical. Reputable developers address these through formal plans, conservative baseline scenarios, and contributions to a buffer pool or common buffer reserve that can backstop any underperformance.
A hybrid approach: the best of both worlds?
Understanding the differences between spot and forward carbon credit prices can help businesses choose the most strategic path for managing emissions costs and long-term sustainability goals. Many leading carbon credit buyers adopt a blended strategy. For example, a company may secure part of its offset demand through spot purchases—addressing immediate unavoidable emissions—while locking in a longer-term contract for forward carbon credits from an emerging project with strong technical specifications and sustainable development benefits.
Read more: Overcoming sustainability challenges: practical solutions for your business
This strategy helps balance flexibility with foresight, allowing you to benefit from price stability while maintaining access to individual projects that resonate with your brand and stakeholders. It also spreads risk, reducing dependency on a single delivery schedule or market condition.
In short, the right approach depends on your goals. If you value certainty, simplicity, and immediacy, spot credits may be your safest route. If you're building a long-term carbon strategy aligned with multi-year objectives and want to support the early growth of environmentally-positive initiatives, forward credits may be the smarter play.
Factors influencing carbon credit pricing in 2025
As we move deeper into the decade, the dynamics shaping carbon prices are evolving rapidly. For businesses navigating the voluntary carbon market—expected to reach $50 billion by 2030 (up from $4.73 billion in 2025)—it’s critical to stay informed about the variables that affect the price of carbon credits. In 2025, these range from shifts in global policy to market demand, risk perception, and the expectations around what constitutes high-quality credits. Keeping track of the factors influencing carbon credit pricing in 2025, such as market demand, regulatory shifts, and project quality, is essential for making informed purchasing decisions.
Demand surge and net-zero commitments
One of the most significant drivers of carbon prices is the sheer increase in demand. With more corporations committing to net-zero targets, demand for carbon offsets—especially carbon removals—is growing faster than supply. Credit retirements plateaued at ~176 million in 2024, but underlying demand is shifting strongly toward durable removals and high-integrity projects. This has led to notable increases in the average price of credits across both established and emerging project categories.
Read more: Why carbon credits are a smarter investment than Bitcoin
As organisations seek to offset their carbon emissions, the competition for high-quality credits intensifies. This is especially true among carbon credit buyers prioritising credits with strong additionality, permanence, and co-benefits. In 2024, non-anonymous buyers increasingly selected projects with higher Sylvera ratings and lower delivery risks. The market is beginning to reward project developers who can offer not just verified reductions but also measurable environmental impact.
Scarcity of premium supply
In many sectors, there’s a noticeable scarcity of high-quality carbon credits. These are typically generated by projects with robust verification protocols, clear emission targets, and well-funded buffer pool mechanisms to mitigate the risk of reversibility. Buyers anticipate paying $25 to $30 per metric tonne by 2030, with projected price increases likely driven by the growing demand for high-quality credits and concerns over limited supply. Because such credits are in short supply, their sale often happens through forward agreements or closed offtake deals, limiting spot availability on the secondary market.
Graph showing ARR credit spot prices (for projects with price quotes in L12M).
The absence of carbon credit supply in certain categories—like energy efficiency projects or frontier carbon removals—is also contributing to upward pressure on pricing. Buyers seeking to offset large volumes of carbon emissions from hard-to-abate sectors are increasingly competing for a limited pool of trustworthy credits.
Influence of carbon tax and regulatory shifts
The broader policy landscape is also influencing carbon credit transactions. The rise of national carbon taxes and the expansion of compliance carbon markets are pushing some businesses to explore more flexible alternatives in the voluntary carbon markets. Notably, California's Cap-and-Trade market passed $40 per tonne in 2024, influencing voluntary pricing benchmarks. As regulations tighten, organisations are using carbon credit purchases to supplement internal reduction strategies and remain aligned with corporate or jurisdictional environmental expectations.
This trend is particularly relevant in countries where businesses are subject to shadow pricing or internal carbon accounting. As the cost of emitting rises, so does the incentive to invest in carbon offsets—especially those that are competitively priced and carry fewer potential risks.
Forward market sophistication
The increased use of futures contracts for forward purchases is introducing new levels of sophistication into the market. Many carbon credit buyers are locking in prices years ahead, often securing supply from innovative carbon projects still under development. These contracts help stabilise budgets but also depend on the credibility of the project developer and the inclusion of safeguards like a minimum guarantee, buffer reserve contributions, or indexed pricing mechanisms.
More buyers are conducting deeper due diligence, analysing crediting periods, baseline emissions, and even legal elements like exclusive claim clauses to avoid double claiming or double issuance. This evolution signals a move towards more responsible buying practices and a growing awareness of project-specific risk assessment.
Economic conditions and market sentiment
Finally, broader economic factors cannot be ignored. Inflation, geopolitical instability, and rising costs of project implementation influence the carbon credit revenue required to make projects viable. For example, developers in high-inflation regions are raising prices to reflect rising operational costs. If operating costs for a forestry and land-use project increase due to local inflation or disrupted supply chains, the sale of carbon credits must reflect those realities.
Market sentiment also plays a role. If carbon credit buyers perceive a particular sector to be oversaturated or under-regulated, they may shift capital to alternative categories—driving micro-fluctuations in the average price depending on investor confidence.
Understanding the carbon credit market
The carbon credit market is no longer the opaque, fragmented ecosystem it once was. It’s evolving—driven by innovation, digital infrastructure, and growing global urgency around carbon emissions.
In 2025, the emergence of digital registries, dashboards, and trading platforms is bringing unprecedented price transparency to the voluntary carbon market. Tools like Carbon Forward and other specialised exchanges are making it easier to track credit availability, view historical pricing data, and execute carbon credit transactions more efficiently. These platforms also support access to standardised technical specifications and project metadata, helping buyers evaluate carbon offset projects with more confidence.
This is especially important for SMEs and new entrants aiming to reduce their carbon footprint but lacking the resources for in-house analysts. With clearer pathways to assess carbon unit quality, compare offerings, and manage procurement across multiple individual projects, buyers are becoming more informed and selective.
Read more: How to use DGB Group's carbon footprint calculator on your journey to net zero
The rise of a robust secondary market is also giving shape to a more dynamic, liquid ecosystem. Companies can now resell or acquire credits more flexibly—sometimes to adjust for updated emission targets, sometimes to diversify their carbon strategy. This liquidity improves market efficiency and allows for better risk distribution across portfolios.
However, this also introduces complexity. Credit tracking must be airtight to prevent double claiming (where two entities claim the same reduction) or double issuance (where a credit is unintentionally sold twice). These risks underscore the importance of credible, well-audited administrative structures and formal plans that align with the best practices of leading carbon crediting programs.
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The role of the project developer is more critical than ever. As expectations for high-quality credits rise, developers are being asked to improve transparency, ensure timely reporting, and communicate how their projects contribute to broader environmental impact and carbon removals.
A close-up of a person weighing firewood during kitchen performance testing for DGB’s cookstoves. Hongera Energy Efficient Cookstoves Project, DGB.
These developments help businesses hedge against volatility, better manage budgets, and plan for future credit issuances without exposing themselves to unnecessary project-specific risks.
Risks and mitigation in carbon credit transactions
Even in a maturing carbon credit market, investing in carbon offset projects comes with potential risks. Understanding these risks—and how to mitigate them—is essential for carbon credit buyers aiming to protect both their budgets and their environmental claims.
Key risks
The most common concerns include the risk of reversibility, where stored carbon dioxide is later released (eg, in a wildfire), and the broader risk of project failure due to poor management, governance issues, or unforeseen events. Individual projects can also underperform if technical specifications are weak or management plans aren’t followed.
Additional concerns include double claiming, double issuance, or the absence of carbon credit delivery if standards are not rigorously applied—all of which can threaten the credibility of a carbon project.
How to mitigate them
To address these issues, leading carbon crediting programmes like Verra and the Gold Standard require safeguards like buffer reserves, buffer pool contributions, and third-party audits. These measures act as a guarantee against reversals by compensating for underperformance or loss.
Other smart practices include conducting a project-specific risk assessment, reviewing baseline scenarios, and ensuring the project developer has a strong track record in financial management practices and compliance.
Ultimately, the safest approach is to choose high-quality credits from reputable project developers backed by credible mechanisms.
The DGB commitment: leading with quality
For organisations serious about achieving real, measurable impact, prioritising high-quality credits is essential. These credits don’t just represent CO2 mitigated—they embody impact, rigour, and accountability.
Look for projects with robust verification frameworks, conservative baseline scenarios, and a minimum guarantee of permanence. The best projects adhere to strict technical requirements and deliver tangible benefits.
Offsetting emissions isn’t just about accounting—it’s about accelerating meaningful change. In a complex and evolving carbon market, it takes more than compliance to make a difference. It takes intention, strategy, and a focus on outcomes that extend beyond the metric tonne.
At DGB Group, we connect carbon markets with holistic sustainability strategies. Through our portfolio of high-quality carbon units and ESG-aligned investment products, we help organisations meet their emission targets while driving real environmental impact and social progress.
Local community members and DGB team during the seedling distribution. Hongera Reforestation Project, DGB.
As a publicly listed company on Euronext, DGB is committed to delivering verified nature-based solutions that restore ecosystems, enhance biodiversity, and generate long-term value. Our large-scale reforestation and community improvement projects are designed not only to offset carbon emissions but to preserve nature and support livelihoods.
You can buy carbon units directly from DGB either at the spot price or through forward contracts, depending on your business needs and strategy. All our carbon units are certified by Verra or the Gold Standard, ensuring their quality and impact. When you compensate for your emissions with us, you get an impact report, communication package, and a compensation certificate and badge, so you can share your positive contribution with confidence.
In choosing DGB, you are doing more than addressing your carbon footprint—you are helping to create a greener, cleaner, and more sustainable world.
