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Carbon credit: definition and how it works

A carbon credit represents one tonne of CO2 equivalent avoided or sequestered by a project (reforestation, renewables, etc.). It is traded on the voluntary market.

How it works

A certified project generates credits, bought by companies to finance emission reductions elsewhere. Quality is crucial: additionality, permanence, verification and no double counting. Not all credits are equal.

Using them well

Credits serve to finance the transition and neutralise residual emissions, after reduction, not instead of it. UltraCarbon prioritises measurement and reduction; offsetting is a complement, never an alibi.

Frequently asked questions

Carbon credit and allowance, the same?

No. A credit belongs to the voluntary market; an allowance (EU ETS) belongs to a regulated market mandatory for certain sectors.

Does buying credits make you neutral?

Not on its own. A credible claim first requires strong reduction; credits only cover the residual.

Measure your footprint with UltraCarbon

Free estimation, ISO 14067-compliant certificates, data hosted in France.

Read next

Carbon assessment: definition, method and obligations →ISO 14067: the carbon footprint of products →Understanding Scopes 1, 2 and 3 →CSRD: the European sustainability reporting directive →Emission factor: definition and sources →Life-cycle assessment (LCA): principles and method →SBTi: science-based climate targets →BEGES: the regulatory GHG emissions assessment (France) →GHG Protocol: the global carbon accounting framework →Carbon neutrality: definition, limits and best practices →Environmental labelling: what is changing for products →Decarbonisation plan: from measurement to action →Carbon offsetting: how it works, quality and limits →Digital carbon footprint: measure and reduce →CBAM: the carbon border adjustment mechanism →Industrial carbon assessment: challenges and method →Food industry carbon assessment: challenges and method →Textile and fashion carbon assessment: challenges and method →Construction carbon assessment: challenges and method →Transport and logistics carbon assessment: challenges and method →E-commerce carbon assessment: challenges and method →Tech, SaaS and startup carbon assessment: challenges and method →Hospitality and catering carbon assessment: challenges and method →Healthcare and hospital carbon assessment: challenges and method →Cosmetics carbon assessment: challenges and method →Wine and spirits carbon assessment: challenges and method →Banking and finance carbon assessment: challenges and method →Retail and distribution carbon assessment: challenges and method →Local authority carbon assessment: challenges and method →SME carbon assessment: where to start →Business travel: measuring and reducing the carbon footprint →Commuting: calculating and reducing the carbon footprint →Business energy: electricity, gas and carbon footprint →Tertiary buildings: carbon footprint and energy regulations →Waste management: carbon footprint and reduction →Responsible purchasing: reducing upstream Scope 3 →Event carbon assessment: method and reduction →Carbon accounting software: how to choose well →Cost of a carbon assessment: how much does it cost? →Doing your carbon assessment yourself or with a consultancy? →How to calculate Scope 3: a practical guide →How to collect data for a carbon assessment →How to reduce your company's carbon footprint →How to prepare for the CSRD: key steps →ISO 14064: the standard for quantifying greenhouse gases →The Bilan Carbone® method: origin and principles →FDES and EPD: product environmental declarations →PEF: the European Product Environmental Footprint →CDP: climate reporting for investors →EcoVadis: CSR assessment of suppliers →Double materiality: definition and method →EU green taxonomy: principles and criteria →Green Claims Directive: regulating environmental claims →Duty of due diligence (CSDDD): what to know →SNBC: France's national low-carbon strategy →The 15 Scope 3 categories explained →Scope 2: market-based or location-based? →Base Empreinte (ADEME): the emission factor database →Greenhouse gases: CO2, methane and CO2e →Carbon dioxide equivalent (CO2e): definition and calculation →The Paris Agreement and the 1.5°C target →TCFD: climate risks and financial reporting →GRI and SASB: sustainability reporting standards →Eco-design: reducing impact from the design stage →Carbon budget: definition and purpose →Net Zero: definition and difference from carbon neutrality →The Low-Carbon Label: financing projects in France →Carbon market and EU ETS: the European allowance system →Carbon pricing: tax, market and internal price →Greenwashing: definition and how to avoid it →The IPCC: role and climate reports →Global warming: causes and consequences →The ACT method: assessing climate strategy alignment →Carbon footprint: definition and calculation →Key climate and emissions figures →Carbon assessment glossary: the essential terms →