Nearly a quarter of carbon credits retired in 2024 came from ‘problematic’ projects

An analysis of the carbon credits retired in 2024 has found that 47.7 million of them came from 43 “problematic” projects, meaning they are not likely to lead to the promised emissions reductions.

These 43 projects alone account for nearly one-quarter of the voluntary carbon market, but the study published by Corporate Accountability suggests that 80% of the offsets retired last year could be considered “problematic”.

With the research, the NGO is casting a shadow on current efforts to improve the integrity of the carbon market through initiatives like VCMI and ICVCM after years of controversies around the actual impact of carbon projects.

“This research serves as an eleventh-hour warning for supporters and investors of carbon offsets and the carbon market,” said Meena Raman, Head of Programs at Third World Network. “The implications are clear – it’s time to shift away from carbon markets, which have failed to deliver emissions reductions for decades, and reinvest into proven solutions that permanently reduce emissions at source and justly address the root causes of climate change. These problematic offsets have no role in the climate action plans of countries or corporations. These pollution allowances have commodified the climate crisis and erased real action. As a result of these sham approaches, millions of lives are now being traded so polluters can profit.”

VCM reform still underway

But while integrity initiatives started several years ago, their effects are only now starting to be felt: the ICVCM is still assessing carbon reduction methodologies under its Core Carbon Principles label, and very few CCP credits were available to purchase and retire last year. Many more of these high-integrity credits will be issued in 2025.

In the latest State of the Carbon Market report, Ecosystem Marketplace noted that “we’re seeing a winding down of a legacy market from older methodologies, and the scaling up of a new phase of the VCM,” but that “supply from new project types takes time to ramp up to meet the needs and demand of this new phase”.

In total, 207.8 million carbon credits were retired in 2024.

Problematic offsets and projects

Projects labelled as problematic in the study are those rated BBB or lower by carbon ratings agency BeZero, meaning they have a “moderate” to “lowest” likelihood of “achieving 1 tonne of CO₂e avoidance or removal”.

According to Corporate Accountability, nearly all (or 93%) of the projects retiring problematic credits are located in the Global South, including five projects in Brazil, the upcoming host of the COP30.

Forestry and land use projects had the largest number of problematic projects (23), and carbon registry Verra is home to the largest number of problematic projects, with 43.6 million problematic offsets retired last year.

It worth noting that the problematic projects listed in the study were developed using old methodologies that have not even been submitted for review by ICVCM: so far, two Verra methodologies for forest-based carbon credits have been approved: VM0048 Reducing Emissions from Deforestation and Forest Degradation v1.0, and Jurisdictional and Nested REDD+ Framework v4.1.

The second most problematic category was renewable energy projects, which have also been excluded from the CCP integrity label.