Read more in the September 19 edition of Invert Insights.
A recent webinar, and accompanying whitepaper, from Renoster, a leading carbon credit rating agency, aims to answer the question at the very heart of the voluntary carbon market: does one tonne of C02e claimed by a project truly equal one tonne removed or avoided?
500M+ NBS Credits Reviewed: Lessons for Carbon Markets takes a deep dive into the dataset of over 200 projects across seven registries and three primary project types: Avoided Deforestation (AD); Afforestation, Reforestation, and Revegetation (ARR); and Improved Forest Management (IFM), revealing that registry and project type alone are not synonymous with quality. Additional due diligence to identify projects that go beyond base level requirements is necessary for buyers to identify the projects delivering on the 1:1 promise.
Renoster’s analysis revealed a significant quality gap in the market, with their Mercury rating system revealing that a large portion of projects are currently underperforming. In applying a transparent, criteria-based rubric to evaluate projects, and assigning quality ratings across methodologies and registries, Renoster highlights variations in additionality, permanence, leakage risk, and community co-benefits.
The ratings distribution shows that over 60% of the projects assessed (rated as “Poor” or “Suspect”) deliver less than half of their claimed tCO2e benefits per credit. Nearly half of all projects (rated “Poor”) are likely delivering less than 25% of the claimed impact, meaning a single credit might represent as little as 0.24 tonnes of CO2e avoided or removed. In contrast, only 32% of projects (rated “Good” or “Excellent”) meet or exceed the 0.75 tCO2e per credit threshold, with “Excellent” projects surpassing full climate equivalence (≥1.0).
The report also provides a comparative analysis of project quality across different carbon registries, showing that the quality of projects they certify varies widely:
Verra: The largest registry in the Renoster dataset with 80 projects, Verra showed the broadest range of outcomes. While 25 projects were rated “Excellent” or “Good,” a significant number (36 projects) fell into the “Poor” category, indicating a mixed performance profile.
Climate Action Reserve (CAR): With 55 projects reviewed, CAR has a strong emphasis on Improved Forest Management (IFM). Nearly half of its portfolio (25 projects) earned “Excellent” or “Good” ratings, demonstrating a positive track record of delivering real climate benefits.
EcoRegistry: With 29 out of 38 projects rated “Poor,” this registry struggles with quality. Though some projects did achieve “Good” or “Neutral” ratings.
ACR: ACR’s 27 projects are heavily dominated by IFM. The projects lean toward weaker outcomes, with only four projects achieving “Excellent” or “Good” ratings.
Gold Standard: This registry shows a stronger distribution, with almost half (8) of its 18 projects rated “Excellent” or “Good,” and only one falling into the “Suspect” tier.
The transparency afforded by carbon credit ratings agencies addresses one of the most pressing challenges in the VCM: buyer confidence. With billions of dollars flowing into NBS projects, reliable ratings and credible partners are critical to ensure climate impact and safeguard the market’s reputation.
💡The Mercury ratings reinforce what many in the market have long suspected: not all carbon credits are created equal. Even within the same category, project quality can vary dramatically. This differentiation is not a niche concern, it’s becoming a central driver of pricing and market demand. For buyers, this means that credit selection is shifting from a volume-driven exercise to a quality-first procurement strategy. High-scoring projects can command premium pricing, while low-rated projects risk being left on the shelf or discounted heavily. For developers, this trend underscores the need to proactively invest in the scientific rigor, data transparency, and community engagement practices that boost project scores. In short, the market is moving toward a world where quality, not just quantity, defines value.
💡 Renoster’s analysis also highlights clear differences in the average quality of projects across registries. While methodologies provide the technical backbone of carbon accounting, registries act as the gatekeepers for integrity, setting standards for monitoring, reporting, and verification. Buyers are increasingly aware that a registry’s reputation can influence how credits are perceived, sometimes even more than the project itself. As a result, procurement strategies are evolving. Corporate buyers looking to protect their climate claims will increasingly favor registries with stronger safeguards, robust oversight, and transparent disclosure practices. For registries, this creates competitive pressure to strengthen methodologies, adopt more conservative baselines, and enforce rigorous ongoing monitoring. Registries are no longer neutral platforms, they are becoming brands whose credibility directly impacts project demand.
💡 The report makes evident that methodologies are not static documents, they are living frameworks that must evolve with science, technology, and market expectations. Some of the lowest-scoring methodologies suffered from outdated assumptions about deforestation drivers, overly generous baselines, or insufficient safeguards for permanence and leakage. Newer or revised methodologies that integrate satellite-based MRV tools and dynamic baselining scored notably higher. For project developers, alignment with emerging best practices in MRV is no longer optional. For buyers, they should scrutinize not only what methodology was applied but also when it was last updated and whether it incorporates modern tools for accuracy. This shift suggests a bifurcation in the market: legacy methodologies may struggle to find buyers, while adaptive, science-based approaches set the new standard.
