Most companies that buy carbon credits never trade them. They buy once and retire. But the price they pay, the credits they can get and the risks they carry are all set by the trading that happens before their purchase. Knowing how that market works is the cheapest protection a buyer has.
Carbon credit trading is the buying and selling of carbon credits between project developers, intermediaries and end buyers, mostly in bilateral over-the-counter contracts and partly on exchanges. Each credit stands for one tonne of CO2 equivalent (tCO2e) avoided or removed. It can change hands several times in its registry, and the trading stops when someone retires it.
This article explains how credits change hands, how prices form, which contracts are used and what a corporate buyer should check. It covers the voluntary market. Trading of EU emission allowances is a different market, explained in EU ETS explained.
Primary and secondary market
The primary market is the first sale: a project developer sells newly issued credits, or future credits, to a first buyer. That buyer can be an end user, a trader or a provider that builds portfolios. Primary deals are often negotiated per project and are frequently signed before issuance, as a forward contract or a multi-year offtake.
The secondary market is every resale after that. Traders and brokers buy credits in bulk, hold them, bundle them and sell them on. A credit can pass through several accounts before an end buyer retires it.
For a corporate buyer, the distinction tells you where the money goes. In a primary deal with a developer, more of the price reaches the project. In a secondary purchase you pay for access, availability and convenience, and you depend on the seller’s due diligence.
Over the counter or on an exchange
Over the counter (OTC) means a bilateral deal: buyer and seller agree on project, vintage, volume, price and delivery, and record it in a contract. Most voluntary credits change hands this way. OTC deals allow project-specific choices, which is what a buyer with a quality policy needs. The downside is that prices are private, so comparing quotes takes work (why carbon credit quotes differ).
Exchanges trade standardised contracts. Instead of one project, a contract defines a pool of eligible credits, and the seller can deliver any credit that meets the criteria. Xpansiv’s CBL, for example, lists contracts such as the Nature-Based Global Emissions Offset (N-GEO), and CME lists futures on it: each contract covers 1,000 offsets from forestry and land-use projects under Verra’s VCS with CCB certification, physically delivered (CME Group).
Exchanges add price transparency and quick execution. They rarely let you choose the project.
Why benchmark prices tell a buyer little
This is the most common misunderstanding about carbon credit trading. Because a standardised contract lets the seller deliver any eligible credit, sellers deliver the cheapest credits that qualify. The benchmark price therefore tracks the bottom of the eligible pool.
The numbers show it. On 6 February 2026, the December 2026 N-GEO futures contract settled at USD 0.64 per offset (NYMEX daily environmental report). In the same year, high-rated reforestation credits averaged USD 28.55 in the first half (Sylvera) and high-quality forest protection credits started around €7 (carbon credit prices in 2026).
Both are “nature-based credits”. The difference is project selection. A buyer who uses an exchange price as a reference for a quote on a rated, recent-vintage project will think every quote is too high.
Tip from Bernard de Wit, Founder of Regreener: “When a CFO shows me a screen price under a dollar and asks why our quote is twenty times higher, I ask which project the screen price delivers. Nobody knows, and that is the point of the contract. You are paying for the right to choose the project, and for the checks behind that choice.”
How a trade works step by step
Whether OTC or on an exchange, the mechanics of a voluntary trade are similar:
Specification. Standard, methodology, project (or eligible pool), vintage, volume, and any label or rating requirements such as the CCP label.
Price and terms. Agreed per tonne, with payment and delivery dates. Forward deals fix the price today for credits issued later.
Contract. Primary sales from developers often use an Emission Reduction Purchase Agreement based on IETA templates. Secondary trades can use the ISDA Verified Carbon Credit Transactions Definitions, first published in 2022 and now in their third version, which standardise physically settled spot, forward and option trades.
Delivery. The seller transfers the credits from its registry account to the buyer’s account at Verra, Gold Standard, Puro.earth or another registry. Buyers without an account ask the seller to retire on their behalf.
Retirement. The end buyer, or the seller on its behalf, retires the credits with the buyer named as beneficiary. The retirement statement is the evidence for any claim.
The full life of a credit before it reaches trading is described in how carbon credits work.
Spot, forward and offtake
Most trading falls into three contract forms:
Spot: issued credits, delivered and paid now. Simple, but you buy what is in stock.
Forward: a fixed price today for credits delivered at a set future date, often from a known project.
Offtake: a multi-year agreement to buy a share of a project’s future issuance, usually at a fixed or indexed price. Common for durable removals with scarce supply.
The trade-off is price certainty and access against delivery risk. A forward or offtake buyer carries the risk that the project issues less, later or not at all. Contracts handle this with delivery schedules, replacement clauses and price adjustments. Our comparison of spot vs forward vs offtake pricing and the guide to offtake contract terms go deeper.
Who is in the trade
Role | What it adds | What to watch |
|---|---|---|
Developer | primary supply, project knowledge | one project, concentration risk |
Broker | finds counterparties, earns a fee | rarely holds or checks the credits |
Trader | holds inventory, takes price risk | margin depends on buying cheap |
Exchange | standardised contracts, transparent price | no project choice |
Provider / portfolio manager | due diligence, portfolio design, retirement and reporting | check its quality criteria |
Each role has a place. What matters is that you know which one you are dealing with and what it is paid for. The differences are set out in brokers, marketplaces and developers, and our comparison of carbon credit traders names the main companies.
Risks in carbon credit trading, and how to avoid them
Unclear title. You pay for credits the seller does not hold yet, or holds through another party. Ask for the serial number range and the account they sit in before you pay.
Double selling. The same credits offered to several buyers. Registry transfer or retirement in your name closes this risk; a certificate PDF does not.
Quality drift in a bundle. A “portfolio” quoted at one price can contain very different projects. Ask for the project list per delivery.
Delivery risk in forwards. Projects issue late or less than expected. Agree what happens if they do: replacement credits of equal quality, a refund, or a price adjustment.
Claim risk. Credits bought cheaply on the secondary market may come from projects you would not want to name publicly. Since EU consumer rules on climate claims apply from 27 September 2026, the project behind a contribution claim matters more than ever (EmpCo carbon neutral claim ban).
“The trading question most buyers skip is: whose account are my credits in today? If the answer is 'ours, after you pay', you are funding someone’s inventory purchase. That can be fine, but you should know it and price it in.”
Bernard de Wit, Founder of Regreener
Voluntary credits vs compliance allowances
Carbon trading also refers to compliance markets such as the EU Emissions Trading System, where companies covered by law trade emission allowances on regulated exchanges. Allowances traded around €84 per tonne in August 2026, far above most voluntary credits. A company outside the ETS cannot use allowances to compensate its emissions in the same way, and buying them to cancel is a separate strategy. The differences are covered in voluntary and compliance carbon markets.
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