Blue Carbon Credits Explained: How Coastal Ecosystems Earn Carbon Credits

Coastal ecosystems store carbon in a way that differs from forests. Mangroves, tidal marshes and seagrass meadows take carbon from the water and the air, bind it in plant tissue, and bury it in waterlogged sediment where oxygen is scarce and decay is slow. Much of the stored carbon sits underground, often well below the surface. Scientists call this 'blue carbon', a term popularised by a 2009 report from UNEP, FAO and the UNESCO oceanographic commission. Blue carbon credits are issued for projects that protect or restore these ecosystems and can show that the carbon stored there is real, additional and kept in place.

Two kinds of project. Avoided loss projects protect a coastline that would otherwise be cleared, drained or converted, for example to shrimp ponds or charcoal production. The credits represent emissions that do not happen. Restoration projects replant mangroves, re-establish seagrass or re-flood degraded marsh. The credits represent carbon that accumulates over time. The two are not equivalent. Restoration starts from a degraded baseline and can take years before carbon builds up, while avoided loss depends on showing that the threat was real and specific.

How carbon is measured. Most of the carbon in a mangrove or marsh sits in the soil, so measurement starts with soil cores taken at set depths and spread across the site. Aboveground biomass is estimated from plot measurements and allometric equations, which convert tree size into biomass, and remote sensing tracks how the extent of the ecosystem changes. Methodologies set the rules: how deep to sample, how many cores to take, which carbon pools may be counted, and how the baseline is built. Verra's methodology for tidal wetland and seagrass restoration, known as VM0033, is one example. Sediment sampling costs more than a forest inventory, and that cost is part of why blue carbon projects are monitored less frequently than many buyers would like.

Additionality is harder to prove on the coast. A project must show that the ecosystem would have been lost or stayed degraded without the credit revenue. That is difficult where national law already protects mangroves. A credit for protecting a mangrove that a government is legally required to keep is weak, because the protection would have happened anyway. The baseline must reflect the most likely land use, and the evidence for that threat, such as permit applications, aquaculture development plans or charcoal supply chains, should be on file.

Leakage is a common blind spot. If a project stops clearing a mangrove stand, the clearing may simply move to a neighbouring stand the project does not cover. Shrimp farms and charcoal producers are mobile in this sense. The methodology should assess displacement across the wider coastline, not only inside the project boundary. This is the same logic that applies to forest projects, but coastal land is often more connected, so displacement can cover longer distances along the shore.

Permanence. Coastal carbon faces threats that inland forests mostly do not. Storms can strip standing biomass in a single event. Erosion can remove soil, and sea level rise can drown a marsh that has nowhere to move inland. Pollution and changes in freshwater flow can also kill seagrass. Registries therefore require a buffer, a share of credits held back against reversal, and most methodologies require monitoring after the project period. A buffer covers the expected losses on average, but a single severe storm can be larger than the buffer for one project.

Communities and benefit sharing. Many mangrove and seagrass areas are used for fishing, firewood, timber and coastal protection by people who live nearby. A project that restricts access without consent creates conflict, and buyers increasingly ask for evidence of free, prior and informed consent, clear land rights and a written benefit-sharing arrangement. Co-benefits such as fish nursery habitat, wave protection and water filtration are real and worth reporting, but they do not add to the carbon count. They should be presented separately from the credit volume.

What buyers should ask. Before buying blue carbon credits, check whether the project is avoided loss or restoration and what evidence supports the baseline. Ask which soil depths and sampling density the methodology requires, and whether the sampling was done by the project or by an independent party. Find out how the buffer handles a storm loss and who holds the land rights. Finally, ask whether leakage was assessed across the coastline or only inside the boundary. Clear answers to these questions say more about credit quality than the headline tonne figure.