11 July 2025
As background context for the specific responses provided below, it is notable that the voluntary carbon market has reduced in size significantly since 2021, and that this is in large part due to on-going concerns with the integrity of the credits that are sold in the market. Within this overall trend there are examples of certification standards that have aimed for higher integrity credits, e.g. Gold Standard, and these segments of the market are growing. The key point is that integrity is essential for the voluntary carbon and nature markets to grow, and integrity should be the key focus for the UK government’s interventions in these markets. With this context in mind, the following identifies two key aspects of the government’s proposals that do not align with achieving integrity and therefore require alternative approaches.
1. Treatment of Permanence
Emissions of CO2 perturb the atmosphere for millennia [1], and for CO2 removal and storage activities, or avoided emissions activities with storage (e.g. avoided deforestation), to genuinely offset the temperature change caused by CO2 emissions, the CO2 needs to be stored out of the atmosphere for an equivalent length of time, i.e. millennia. Storage for shorter durations can still have value, e.g. for shaving peak temperature change, or as a temporary offset that must be replaced with a permanent offset, but it is not equivalent to permanent mitigation [2][3][4], and cannot be used on its own to make permanent offset claims.
The proposal in the consultation document is to recognize the ICVCM’s Assessment Framework, which requires a monitoring period of 40 years, after which reversal emissions are not monitored and no compensation for reversals is required. This will to lead to companies making false offset claims, which will undermine integrity and therefore demand in the market, and financial flows in the VCM will not scale (as seen with recent trends).
Response to question 9: The UK government should not endorse the ICVM’s Assessment Framework. Instead, the UK government should provide guidance on the appropriate use of credits that involve non-permanent storage, e.g. such credits must be replaced with permanent mitigation credits at the end of the monitoring period, or be used for making alternative (not offsetting) claims, e.g. contributing to ‘peak shaving’. See Brander and Broekhoff [2] for more discussion on this issue.
2. Corresponding Adjustments or Alternative Claims
The fundamental requirement for an offset is that is achieves an outcome that compensates for the impact/harm that is ‘offset’. In the case of carbon offsetting the purchase of a credit must reduce emissions (or enhance removals) below what would happen anyway, otherwise no compensatory outcome has occurred, i.e. there is no offset. However, if offset project activities count towards country targets they do not achieve lower emissions than would happen anyway (if the country would have achieved the same target level of emissions, e.g. through the implementation of alternative policies and actions). See Brander, Broekhoff and Hewlett [5] for a more detailed analysis of this issue. As with the permanence issue above, if this issue is not addressed companies will make false offset claims, which will undermine the integrity of the market, and financial flows via the VCM will not scale.
One solution to this issue is to require corresponding adjustments for credits that are used for making offset claims, as this avoids the interaction effect/double-counting with the host country’s emission reduction targets. A different solution is to move away from the use of credits for making ‘offset’ claims, and for companies/purchasers to make ‘contribution’ claims instead, i.e. to have contributed to the fulfilment of the host country’s targets.
Response to question 1. The UK government should not recognise VCMI’s Claims Code as representative of international best practice, as this code does not require corresponding adjustments for offset claims and does not represent best practice. Instead, the UK government should recognize Gold Standard’s guidance on this issue, which represents higher integrity and best practice: https://goldstandard.org/sites/default/files/documents/gs_guidance_correspondingadjustments_feb2021.pdf.
It is worth noting that the UK government’s own guidance on environmental reporting recognizes precisely the problem described above. The government’s guidance on the use of Woodland Carbon Units states that:
“Woodland Carbon Units (WCU) quantify CO2 sequestration due to woodland creation in the UK. They are another option to carbon credits from projects overseas. They are certified to the Woodland Carbon Code, but are not termed offsets or carbon credits because they do not meet all aspects of “additionality” requirements, in common with all domestic emissions reduction projects. (This is related to UK government policy towards reducing emissions under UNFCCC agreements), This does not mean that it is inappropriate to finance domestic projects; indeed doing so helps the UK to meet its targets efficiently.” [6].
Response to question 38. The UK government has an opportunity to show leadership in the implementation of corresponding adjustments for credits used for voluntary offset claims by demonstrating how implementation can be done. It is worth highlighting that there are potential benefits for host countries, particularly developing countries, in managing the issuance of corresponding adjustments. For example, the host government can direct VCM project developers to high cost abatement activities that the government is not planning to use towards its own NDC (by only agreeing to issue corresponding adjustments for such projects). Agreements for corresponding adjustments can also be used to establish share-of-issuance or share-of-proceeds arrangements between project developers and host governments, providing revenue to the host government. The UK government can play an important role in developing and disseminating best practice in this area.
The approach currently proposed in the consultation document is to leave it to the “discretion of private sector buyers whether to purchase units with, or without, corresponding adjustments” (p64). In the absence of clear guidance, buyers will be uncertain whether corresponding adjustments are needed for offset claims, and this uncertainty and the reputational risk from making false claims will impede the growth of the VCM.
It is a notable feature of the VCM that many market participants, including the ‘integrity’ councils, continue to opt for low integrity despite on-going evidence that integrity is what the market requires.
References
[1] Archer D, Eby M, Brovkin V, et al. Atmospheric lifetime of fossil fuel carbon dioxide. Annu Rev Earth Planet Sci37, 117–134 (2009).
[2] Brander M, Broekhoff D. Methods that equate temporary carbon storage with permanent CO2 emission reductions lead to false claims on temperature alignment. Carbon Management, 14(1) (2023).
[3] Matthews D, Zickfeld K, Koch A, Luers A. Reimagining tonne-year accounting to capture the climate benefit of temporary carbon storage [Internet].
[4] Streck C, Minoli S, Roe S, et al. Considering durability in carbon dioxide removal strategies for climate change mitigation. Climate Policy. (2025).
[5] Brander M, Broekhoff D, Hewlett O. The Future of the Voluntary Offset Market: The Need for Corresponding Adjustments [Internet].
[6] Defra. Environmental Reporting Guidelines [Internet].
Matthew Brander
Personal Chair of Carbon Accounting, University of Edinburgh Business School