Understanding carbon credits is an essential step in addressing climate change and promoting sustainable practices. These credits serve as a market-based mechanism to offset greenhouse gas emissions by allowing businesses and individuals to invest in environmental projects. Whether you're new to carbon credits or looking to trade them, this guide will break down what they are, how they work, and the steps to buying and selling them effectively.
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What are Carbon Credits?
Carbon credits, often referred to as carbon offsets, represent verified reductions in greenhouse gas emissions achieved through certified climate action projects. These credits work by reducing, removing, or preventing emissions. Buying a single carbon credit grants the purchaser the right to emit one metric ton of carbon dioxide, effectively balancing their environmental impact. Carbon credits can either be exchanged in a carbon market voluntarily or as part of a regulatory framework. A company purchasing carbon credits is funding projects that remove carbon dioxide from the atmosphere. This offsets the company's emissions. Essentially, the company that purchases the carbon credits is balancing out its emissions by funding projects that reduce carbon dioxide. Many companies are setting net-zero targets, meaning they are offsetting 100% of the carbon they are emitting.
How Much is a Carbon Credit Worth?
Carbon credit value or price fluctuates in voluntary markets depending on the supply and demand of the economy. Current rules permit the international transfer of carbon credits. Supply and demand variances across countries will cause price variations. In 2025, a carbon credit trades for around $40 – $60 per metric ton of carbon dioxide stored. To put this into perspective, a farm or ranch land can absorb a wide range of amounts of carbon dioxide. The amount absorbed depends on location, soil type, and the tree canopy. This can range from 0.5 to more than 5 tons per acre per year. As more companies commit to net-zero goals, demand for carbon offsets will likely rise. This could lead to an increase in the cost of carbon offsets. This means that it's possible to make as much as $1,000,000 per year on one thousand acres of land by 2030!
Verified Carbon Credits & Carbon Credit Value
When it comes to compensation for carbon credits, buyers differ in their preference. Verified carbon credits are generally more attractive than unverified ones. Would you let a surgeon operate on you if they had never been to medical school? Hopefully not. You can think of carbon credit verification the same way.Â
Rather than buying carbon credits that just claim to offset emissions, verified carbon credits guarantee that the emissions will be offset. This means the carbon offsets will have the environmental impact they claim to have. Carbon credits are verified using careful data and analysis (LandGate does not verify carbon credits). The quality of a carbon credit is determined by how carefully it has been verified. The higher the quality, the more a buyer will trust it and be likely to invest.
You may also hear the term 'certified carbon credit.' Carbon offsets that are certified are generated under the Clean Development Mechanism (CDM) and are called Certified Emissions Reductions (CERs). The CDM assists emissions reduction projects that generate CERs. CERs can be bought and traded by participants in mandatory compliance schemes around the world to meet their emissions targets. The main difference between carbon credit certification and other processes is that it is regulated. It is designed to offset a project's emissions and meet government requirements on carbon emissions.
LandGate assists landowners in selling their carbon credits from their land through our marketplace, where they can list their land for lease for carbon credits at no cost. It is the carbon credit developer/ investors responsibility (not the landowner or the buyer) to have carbon credits verified when trading carbon credits on LandGate’s carbon marketplace. To find out what your land is worth for carbon offsets and create a free listings, start by finding your property on LandGate's map to generate your free Property Report:
How Landowners Can Sell Carbon Credits From Their Land
Landowners have the opportunity to sell carbon credits by managing their land in ways that capture and store carbon dioxide, a critical process in combating climate change. This can include practices such as reforestation, afforestation, improved forest management, or adopting sustainable agricultural techniques. These activities help sequester carbon in trees, soil, and other ecosystems, which can then be quantified and verified to produce carbon credits.
The carbon credits that a landowner can sell from their land depends on the type of land that they own, but all types of land can store carbon! Landowners are eligible to receive carbon credits at the rate of one per every ton of CO2 their land sequesters.
They can sell carbon offsets on what are called 'voluntary carbon markets.' These carbon credit buyers are purchasing carbon credits as an investment or are businesses trying to meet internal standards for carbon footprint reduction.
In contrast, a cap-and-trade market consists of companies trading allowances. Caps, or limits on pollution, are set by the government and generally apply to an entire industry. The government regulates adherence to these caps and hands out penalties for failure to comply. Companies that cut pollution at a faster rate can trade their allowances with companies that emit more carbon and therefore need additional allowances to meet the mandated caps.
How to Buy Carbon Credits
Carbon credits can be purchased from a variety of sources, including online carbon marketplaces, brokers, and retailers. LandGate is an online platform that specializes in providing carbon offset solutions for businesses and individuals by connecting them with landowners who manage sustainable land-use projects.
Here are the general steps to follow when buying carbon credits through LandGate:
Determine the amount of carbon credits you need to purchase. This will depend on the amount of carbon emissions your business or organization produces.
Visit the LandGate website and create an account.
Browse the available carbon credit projects on the LandGate platform. The land for lease for carbon credits may include reforestation, avoided deforestation, and methane capture projects.
Choose the project that best fits your sustainability goals and budget.
Contact the landowner associated with the project to purchase the credits. You will typically need to provide information about the amount of credits you need, the type of credits you want, and any other lease stipulations you would like to include.
LandGate provides the land and data necessary for the creation and verification of carbon credits. Once you have purchased the credits, you will receive a certificate or other documentation that verifies your ownership of the credits. You can use this documentation to show that you have offset a certain amount of carbon emissions. If you are an energy investor looking to access this carbon data, learn more about our Carbon Data Solutions.
