Carbon markets channel funding to verified climate projects by putting a price on carbon. Here's how the voluntary and compliance markets work, how they differ, and how to participate — whether you're buying, selling, or building.
A carbon market is a trading system where carbon credits — each representing one tonne of CO₂e reduced, avoided, or removed — are bought and sold. Companies and individuals use these credits to compensate for emissions they cannot yet eliminate, directing funding to independently verified climate projects around the world.
Created by regulation. Governments set a legal cap on emissions for covered industries and issue tradable allowances under cap-and-trade systems such as the EU Emissions Trading System (EU ETS), the UK ETS, and California’s cap-and-trade program. Participation is mandatory for the companies these laws cover, and the cap tightens over time — making it progressively more expensive to pollute.
Open to everyone. Companies and individuals choose to buy verified carbon credits to take responsibility for their emissions. Credits are issued by independent registries — such as Verra, Gold Standard, Puro.Earth, ICR, and EcoRegistry — after third-party verification, with market integrity anchored by standards like the ICVCM’s Core Carbon Principles. Increasingly, this market is driven by international commitments, such as Net Zero, that organizations sign onto to support greenhouse gas mitigation and removal initiatives globally.
The two markets increasingly interact: Article 6 of the Paris Agreement lets countries trade emission reductions across borders and is drawing voluntary credits into compliance frameworks — one reason credit quality and traceability matter more every year. Additionally, hybrid compliance/voluntary markets provide avenues for organizations to, for example, offset a portion of their carbon tax using carbon credits from the VCM.
A developer designs a project that avoids, reduces, or removes emissions — reforestation, methane capture, biochar, or engineered removals — and documents it against an approved methodology.
An independent third party audits the project and verifies the climate benefit is real, additional, and measurable.
A carbon registry — such as Verra, Gold Standard, Puro.Earth, ICR, or EcoRegistry — issues one credit per verified tonne of CO₂e.
Credits are bought and sold through marketplaces, brokers, or directly from developers. Transparent marketplaces show the price, project details, and available supply up front.
The buyer retires the credit — claiming the environmental benefit — permanently removing it from circulation. Only a retired credit supports an offset claim — retirement is what turns a purchase into climate action.
Prices vary widely by project type — from under $1 per tonne for renewable-energy credits to several hundred dollars for engineered removals. See carbon credit prices in 2026 for current ranges, and what retirement really means for why the final step is the one that counts.
Buyers — from enterprises with net-zero commitments to individuals offsetting a flight — purchase and retire credits from 0.001 tonnes upward.
Project developers and credit holders list and sell credits across marketplace, API, and direct-sales channels — or issue new credits through Carbonmark Direct.
Platforms and AI agents embed carbon retirement into their own products through the Carbonmark API and the x402 endpoint for agents.
Three forces are reshaping the market. Integrity standards — the ICVCM’s Core Carbon Principles are concentrating demand on high-quality, independently verified credits. Digital infrastructure — tokenization and registry integrations are making credits traceable from issuance to retirement, reducing double-counting risk and enabling real-time trading. Carbon removals — demand is shifting from avoidance toward durable removals such as biochar, mineralization, and ocean-based approaches.
Forecasts suggest the voluntary market could exceed $10 billion by 2030, with analysts projecting average credit prices to rise substantially by 2035 as quality standards tighten and demand grows.
Compliance markets are created by law: governments cap emissions for covered industries, and companies trade allowances under systems like the EU ETS or California's cap-and-trade program. The voluntary carbon market is open to anyone — companies and individuals choose to buy verified carbon credits to take responsibility for their emissions. The two increasingly interact through hybrid compliance/voluntary markets where carbon credits can be utilized for things like national carbon taxes.
Compliance markets are by far the larger segment, turning over hundreds of billions of dollars a year across systems like the EU ETS. The voluntary carbon market is smaller — measured in the low billions annually — but forecasts suggest it could exceed $10 billion by 2030 as integrity standards mature and demand for verified carbon removals grows.
Carbon markets put a price on emitting CO₂. Compliance systems make polluting progressively more expensive under a shrinking cap, while the voluntary market channels private funding to projects that avoid, reduce, or remove emissions which would often not be financially viable otherwise (this core concept in the carbon market is known as 'additionality').
The carbon offsets market is another name for the voluntary carbon market: the buying and selling of credits used to offset — compensate for — emissions. Each credit represents one tonne of CO₂e avoided, reduced, or removed by an independently verified project, and it must be retired to support an offsetting claim.
Buyers can purchase and retire verified credits in minutes on a marketplace like Carbonmark, starting from 0.001 tonnes, paying by credit card or bank transfer. Credit holders can list and sell credits for free, developers of new carbon removal technologies can issue credits through Carbonmark Direct, and software platforms or AI agents can integrate offsetting through the Carbonmark API and our x402 endpoint.