In 2024, the voluntary carbon market (VCM) shattered previous records, pulling in a staggering $16.3 billion in investments, according to a recent report from Abatable. This marks an explosive 18-fold increase compared to the total value of carbon credit retirements, signalling a long-term commitment from companies, investors, and governments to tackle nature-related challenges head-on.
The surge highlights how carbon credits have become essential tools for corporate sustainability strategies. Throughout 2024, regulatory pressures intensified, particularly in the European Union, where the Carbon Border Adjustment Mechanism (CBAM) imposed stricter tariffs on carbon-heavy imports. The result? A sharp rise in demand for verified, high-quality carbon credits as businesses scrambled to future-proof their operations.
Corporations led the charge in purchasing carbon credits last year, with many focusing on addressing Scope 3 emissions—those indirect emissions from supply chains and third-party operations. The aviation sector emerged as a notable driver of demand, thanks to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). By 2026, the program could boost demand for up to 182 million tonnes of credits, accounting for 37% of the market’s total retirements.
Tech giants and global corporations ramped up their sustainability pledges as well. Microsoft committed to purchasing millions of tonnes of carbon removal credits, while Amazon doubled down on forest conservation projects aimed at reducing its operational footprint.
One of 2024’s most significant trends was a clear investor shift toward carbon removal projects. These initiatives—ranging from direct air capture (DAC) technologies to large-scale afforestation efforts—have gained popularity due to their ability to offer measurable, permanent carbon reductions.
Older avoidance credits, particularly those under the REDD+ framework, faced declining prices over concerns about their reliability. Yet, newer REDD+ projects adhering to stricter standards saw renewed investor interest. Meanwhile, blue carbon credits, generated from coastal ecosystems like mangroves and seagrasses, gained momentum for their dual environmental and community benefits.
The voluntary carbon market’s credibility saw substantial improvements in 2024. Half of all retired credits met the high-quality benchmarks set by the Integrity Council for the Voluntary Carbon Market’s (IC-VCM) Core Carbon Principles (CCPs)—a significant leap from 29% in 2021.
Technology played a key role in driving transparency and accountability. Blockchain-powered tracking and advanced digital measurement, reporting, and verification (dMRV) systems helped curb fraud risks and prevent double counting, reassuring investors and boosting market confidence.
Despite rising demand, an oversupply of older credits contributed to price drops last year. Yet, high-quality removal credits like biochar held strong, trading between $200 and $1,200 per tonne.
Experts suggest that the market’s future will favour premium, high-integrity credits. With evolving financial tools like forward contracts and pre-financing agreements, businesses will have more flexibility and certainty as they aim to meet increasingly stringent sustainability regulations.
As the demand for reliable carbon credits continues to rise, companies must act now to stay ahead. Discover how our cutting-edge solutions at DGB Group can help integrate nature-based carbon credits into your sustainability strategy—start your journey toward meaningful environmental action today.