The opinions expressed by Trellis expert contributors are their own, not those of Trellis.
Almost every climate compliance system in the world lets regulated companies meet a portion of their mandated emissions reductions with high-quality carbon credits. So why does the voluntary system exclude credits?
All options need to be on the menu. Global greenhouse gas emissions hit 58 billion metric tons in 2024, up 2.3 percent from the year before and more than four times the average annual growth rate of the 2010s. Our job right now is to deliver as much mitigation as possible, as fast as possible, with the best tools we have — including qualified credits.
In June, the Science Based Targets initiative finalized version two of its Corporate Net-Zero Standard. The rules include a new voluntary “ongoing emissions responsibility” program that rewards companies that cover a share of their emissions with credits or spending on other climate programs.
The standard is a real step forward. But the first question companies always ask about credits is “do they count towards my target?” Under the new rules, progress toward targets is based on measured emissions reductions across Scopes 1, 2 and 3, together with the use of environmental attribute certificates that are tied to supply-chain projects. This is necessary and important, but credits generated by projects outside a company’s value chain are explicitly excluded.
The case for credits
I think that’s a mistake, and I think it’s fixable. My proposal: allow a portion — say 30 percent — of a company’s target to be met with carbon credits that carry an appropriate quality label, such as the Core Carbon Principles from the Integrity Council for the Voluntary Carbon Market (ICVCM), or approval from a compliance program.
The limit on credit use ensures the majority of the work stays inside the value chain, driving investment into the new technologies and internal transformation that is so important. The rest of the effort mobilizes finance for the Global South, for nature and for abatement that never touches a corporate supply chain — which, it turns out, is some of the most cost-effective and impactful near-term action we can take.
Every major compliance system in the world uses a similar design. Under California’s scheme, which covers major users of fossil fuels, credit use is limited to 6 percent of the compliance obligation, with at least half of those credits required to deliver environmental benefits in the state. In Singapore, the limit is 5 percent of taxable emissions. Even the European Union, which long took the hardest line on credits, agreed last December that high-quality international credits can be used to meet up to 5 percent of national emission reductions.
Every system keeps the emphasis on direct, domestic abatement. Every one caps credit use. And every one treats a capped share of high-quality credits as a way to raise ambition rather than dilute it.
5 reasons this is good for the climate fight
Cost and scale matter. The marginal cost of abatement varies enormously across companies, sectors and geographies. In an emergency, we need to do more than incentivize companies to invest in cleaner and more expensive technologies — we also need to steer money toward the cheapest, fastest reductions on the planet.
Critical approaches are not scaling. Achieving global net zero will require hundreds of billions of dollars of additional investment in protecting and regenerating natural ecosystems, as well as a huge increase in our capacity to remove carbon dioxide from the atmosphere using biochar, direct air capture and other mechanisms. Allowing nature-based projects and other removals to count toward targets gives wealthy companies a reason to sign the long-term offtake agreements that will scale those mechanisms.
This is voluntary. Oh, how I wish we were designing a regulatory system with binding enforcement. We aren’t. Companies off track on voluntary targets don’t shut down product lines or forgo growth — see the AI energy arms race, for example. Instead, they miss their targets or quietly drop them. Allowing credit use strengthens the voluntary system by keeping more companies inside it.
Climate equity matters. The Global South disproportionately bears the impacts of a crisis it did least to cause. Properly structured carbon finance is one of the most effective mechanisms I’ve seen for getting money directly to affected communities and ecosystems. This ensures those funds will flow.
This isn’t yesterday’s carbon market. As of November 2026, the ICVCM has approved 45 methodologies and 13 crediting programs against the Core Carbon Principles, creating a global, science-based rule set. We’ve learned a lot over 20 years of building methodologies for intervention accounting — emissions accounting speak for measuring the effect of a specific action. Have we got it all figured out? Nope. Will we ever get it perfect? Highly unlikely. Does that mean we give it up? It does not.
A new voluntary playbook
The critics are correct in saying that this market has had integrity failures, and that credits can’t become a permission slip to stop decarbonizing operations. A cap, a quality bar, a declining glide path and transparent, separate reporting of physical reductions versus credits are non-negotiable.
But a perfect inventory doesn’t do the atmosphere any favors if the companies holding it never set a target, or quietly abandon those they have set because they’re too difficult or too expensive to deliver. Every regulator I’ve ever worked with figured out that capped flexibility raises ambition and increases participation and system durability. The voluntary world can figure it out too.
SBTi took a meaningful step with ongoing emissions responsibility. The next step is letting a capped, high-quality slice of credits count where it matters most — toward the targets themselves. The compliance world already wrote that playbook; SBTi, the next revision is your move.