Forest credits are the largest family of nature-based credits, but they do not all earn their tonnes in the same way. A tree-planting project and a change in how a timber forest is harvested produce very different credits, with different baselines, timing and risks.
ARR credits pay for new trees on land without forest; IFM credits pay for keeping more carbon in forests that are already managed for timber. This article explains how each type earns credits, how the newest methodologies set their baselines and which questions to ask before you buy. Forest protection, REDD+, works differently again and has its own explainer.
Three types of forest credits
ARR | IFM | REDD+ | |
|---|---|---|---|
What changes | trees planted or regrown on non-forest land | management of an existing working forest | deforestation or degradation is prevented |
What is credited | CO2 absorbed by new biomass and soil | extra carbon kept in the forest compared with normal harvesting | emissions avoided |
Credit type | removal | mostly avoided emissions, partly removals | avoided emissions |
When credits come | years after planting, as trees grow | from the first monitoring period | from the first monitoring period |
Main risk | survival, fire, plantation quality | baseline (how much would have been harvested) | baseline and leakage |
How ARR credits work
ARR stands for afforestation, reforestation and revegetation. Under the UN definitions still used in many methodologies, afforestation is planting on land that has not been forest for at least 50 years, reforestation is planting on land that was forest but was cleared, and revegetation covers woody vegetation that does not meet the definition of a forest, such as shrubland.
A project measures the carbon stored in trees, roots, dead wood and sometimes soil over time. The increase above the baseline, minus project emissions and leakage, becomes a removal credit. Because trees grow slowly at first, the first credits usually come several years after planting, and the volume rises as the forest matures. Verra issues credits only after a monitoring period has been verified, so an ARR project sold early is usually a forward contract, not a delivered credit (offtake agreements).
The baseline has changed. Verra’s VM0047 methodology, which replaces the old CDM reforestation methods, offers an area-based approach that compares the project with matched control plots monitored by satellite: if similar land nearby regrows on its own, that regrowth is deducted. A census-based approach counts individual trees for projects that plant on farms or in small numbers without changing land use (Verra VM0047). The dynamic baseline is stricter, but it is far harder to inflate than a fixed assumption that nothing would have grown. The first credits under VM0047 were approved in April 2026: 230,120 credits for Brazil Cerrado 1 (Verra project 5511), a reforestation project across three Brazilian states (Verra).
How IFM credits work
IFM applies to forests that are already managed for timber. A project earns credits by changing practice so the forest holds more carbon than it would under normal management. Common activities:
extended rotation: harvesting trees later, so stands hold more carbon on average;
logged to protected: stopping commercial harvesting in a forest that would otherwise be logged;
reduced-impact logging: harvesting with less damage to the remaining forest.
The baseline decides almost everything in IFM, because nobody can observe the harvest that did not happen. Older methods modelled what a typical owner would cut, which left room for generous assumptions. Verra’s VM0045 replaces that model with a dynamic matched baseline: each project plot is paired with similar plots from the national forest inventory, and the baseline follows what actually happens on those plots over time. The ICVCM approved VM0045 for the CCP label in August 2025, and the first CCP-labelled IFM credits were issued in December 2025 to the American Forest Foundation’s Family Forest Carbon Program: 18,326 credits from family-owned forests in Central Appalachia (Verra). VM0045 currently applies only to the conterminous United States, so most IFM credits outside the US still use older methods.
Permanence and leakage
Both types store carbon in living forests, which can burn, die or be cut. Standards deal with that through a buffer pool: every project sets aside a share of its credits, based on a risk assessment, to cover future losses (carbon credit permanence). Under SBTi’s Corporate Net-Zero Standard V2.0, ARR counts as a short-lived removal, storing carbon for decades to centuries (carbon dioxide removal explained).
Leakage is the second risk. A reforestation project on former farmland can push farming onto forest elsewhere; an IFM project that harvests less can shift logging to other forests. Credible methodologies deduct an estimate of that displacement from the credits.
What buyers should check
Methodology and version. VM0047 and VM0045 are CCP-approved, as are ARR and IFM methods from ACR and the Climate Action Reserve’s Mexico forest protocol (Core Carbon Principles). A project on an older method is not automatically worse, but ask how its baseline was set.
Delivered or forward. Ask how many credits have been issued and how many are expected, per year.
Species and land. Native mixed forests on degraded land carry more biodiversity value than monocultures, and land rights must be clear (co-benefits).
Additionality. Commercial timber plantations that would pay for themselves are a weak case for credits (additionality).
Buffer and monitoring. Check the buffer contribution, the monitoring interval and whether satellite data is used.
Tip from Bernard de Wit, Founder of Regreener: “With ARR, ask for the survival rate of the trees planted in the first years, not only the hectares planted. A project that plants a million trees and keeps half of them alive will deliver half the credits in its sales deck.”
Prices follow quality. High-rated ARR credits averaged USD 28.55 in the first half of 2026, according to Sylvera, well above lower-rated forest credits (carbon credit prices). For named ARR and IFM projects, see our forest carbon credit types and projects.
“A good forest portfolio is about balance. ARR gives you tonnes you can count as the trees grow. IFM can be just as valuable, but it rests on a harvest that never happened, so the baseline method is the first page we read.”
Bernard de Wit, Founder of Regreener
Looking for forest credits you can defend?
See the reforestation and forest projects in our portfolio, with their methodology, issuance history and buffer details.
