While “carbon credits” and “carbon offsets” are sometimes used interchangeably, they have different meanings. Carbon credits can be purchased by organizations to compensate for their emissions of carbon dioxide or equivalent gases. When a credit is used for this purpose, ideally only to address residual or beyond value chain emissions, it becomes a carbon offset. It’s moved to a registry for retired credits (making it unavailable for future sale) and is no longer tradeable. Companies can participate in the voluntary carbon market (VCM) individually or as part of an industry consortium such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
