Carbon neutral: How to buy carbon credits (Part II)


As mentioned in the previous article, carbon exchanges and independent carbon credit providers are mushrooming as alternatives for businesses to obtain carbon credits. This section will focus on the differences between these trading platforms and the international standards that allow them to distinguish themselves in the voluntary market.

Carbon exchange

A carbon exchange, acting as a trading channel that does not necessarily involve the development of carbon credits, does not have its own methodology but follow the concept of the Verified Carbon Standard (VCS) or Gold Standard (GS) mentioned in the previous article. In other words, carbon credits purchased on the exchange fulfill these international standards and can be used as offsets by companies as well. The table below provides a comparison of the common carbon exchanges AirCarbon and Climate Impact X.

Table 1. Comparison of carbon credit exchanges


Climate Impact X


Singapore, United Arab Emirates


Medium of exchange

Virtual currency, contract

Carbon credits are currently traded through auctions and will be traded on an exchange in the future (spot carbon credits).

Project type

Nature-based solutions, Renewable energies, Household energy efficiency

Nature-based solutions

Standard adopted



Average price of carbon credits


(Prices vary by project, e.g. US$79/tonne for carbon capture projects, US$8.7/tonne for household projects)


(According to 2021 auction price)

Trading commissions

US$5/1,000 tonnes

5% per transaction

Scope of application

Applicable to corporate carbon offsets. The standards adopted by these exchanges are internationally recognized. Companies only need to retire their virtual currency or contract (registered with the exchange) when they want to offset emissions.


The difference between purchasing credits through global standard platforms and carbon exchanges is that the former will charge companies for account registration and various applications. An exchange, on the other hand, allows companies to obtain carbon credits from the standards under a single account, which saves time and cost. However, there are still drawbacks to using an exchange. Companies will still be subject to commission charges, which vary from one exchange to another. To purchase carbon credits from an exchange, companies should evaluate their own purchase volume and select the most suitable commission calculation method.

Independent carbon credit provider

In addition to the voluntary standards and exchanges mentioned above, many companies also act as carbon credit providers, which offer opportunities to participate in projects and purchase carbon credits through their websites. Companies that require a large amount of carbon credits can also contact carbon credit providers, such as Native Energy and Cool Effect, to get the cheapest price on market and more room for bargaining. However, this comes with a high risk of receiving carbon credits of poor quality or even being subject to fraud. Therefore, companies that purchase from independent providers should check whether the credits are certified, attached with the International Carbon Reduction and Offsetting Alliance (ICROA)[1] label, or backed up by a tracking system, which ensures that every transaction is recorded and avoids re-purchases.

Challenge of voluntary carbon market

The voluntary market is still controversial. The concept of voluntary carbon credits refers to reduction allowances; and reduction, according to one of international definitions, should involve additionality. In other words, carbon reduction will only happen if actions such as conventional stove improvement are taken. However, since no one can prove that the assumption will occur or not, it is better not to use this kind of stove. Therefore, there is still room for development in the voluntary market, and more precise definition and regulatory are to be amended.

With more and more carbon exchange established, there will be more channels for companies to obtain voluntary carbon credits. The process will also be simpler as carbon trading and offset (retirement) can be conducted once an account is created. When the purpose of using carbon credits is to fulfill corporate social responsibility, special attention must be paid to the type of application. It is suggested to use carbon credits verified by international standards. In addition, enterprises should plan their carbon reduction pathway as early as possible and should not rely entirely on carbon credits to offset emissions, otherwise carbon neutral will lose its purpose.

[1] The International Carbon Reduction and Offsetting Alliance (ICROA) is a non-profit organization that promotes the practice of voluntary carbon markets. Members come from Europe, the Americas, and Asia, and are required to submit annual reports to prove their compliance with the organization's guidelines. The ICROA label represents sources from third-party verified carbon offset suppliers.

Related Topics
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Carbon neutral: How to buy carbon credits (Part I)
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