Voluntary Carbon Market Insights & FAQs

AlliedOffsets uses a Pricing Model, which aggregates and analyzes real market offers collected from participants across the ecosystem. The algorithmically derived prices are based on over 17,000 price inputs per year, updated 3x per week. These include developers, brokers, and marketplaces who share data with us daily, weekly, or monthly depending on existing partnerships.

The result is a continuously updated view of carbon credit pricing that reflects both current offers and broader market sentiment.

Carbon projects differ widely by project type and methodology.

For example:

• Removal vs. Avoidance: Removal projects (like afforestation/reforestation) physically remove CO2 from the atmosphere, making their credits more valuable to many buyers compared to avoidance or reduction projects (like renewable energy or cookstoves).
• Cost and Risk: Forestry and other nature-based projects involve long-term land management, higher setup costs, and ongoing verification risks. In contrast, renewable energy projects are generally cheaper to implement and more predictable.
• Co-Benefits: Community-focused projects, such as cookstoves, can offer strong additional benefits besides the carbon reduction or removal that can influence prices.

In short, removal credits tend to command higher prices due to permanence and climate impact, while avoidance projects are often lower-priced but may offer other valuable co-benefits. Geography further amplifies these differences, local policy, labor costs, and verification expenses all impact prices.

Our platform tracks an extensive dataset of over 49,000+ individual price points, representing actual transactions.
We also maintain 13 price indices, with new ones in development, including:

• Biochar Index (active)
• Superpollutant Index (upcoming)

These indices provide tailored views across different project types and methodologies. 

We archive each model run and update, allowing users to access historical price estimates and track how our pricing model evolved over time.

This makes it possible to analyze trends, volatility, and long-term market cycles across methodologies and indices.

Carbon prices are highly dynamic and respond to sentiment, demand shifts, and policy signals. After a strong surge in 2021, market prices declined through 2022, stabilizing in 2023-24. Today, prices are rising again for high-quality credits, especially in:

• Carbon Dioxide Removal (CDR)
• New Afforestation/Reforestation (ARR) methodologies
• Biochar and other durable removal projects

For the latest pricing data, see our pricing page here.

Generally, credit prices increase with the permanence and cost of carbon removal:

• Technology-based avoidance (e.g., renewable energy) – lowest prices
• Nature-based removals (e.g., forestry, soil carbon) – moderate prices

Technology-based removals (CDR) – highest prices, reflecting the innovation and scalability challenges of these solutions.

Forward and offtake agreements help bring cost certainty and financing stability to project developers. By locking in future delivery prices, buyers enable expensive emerging technologies (like DAC or biochar) to scale.

These instruments also signal market confidence and help set expectations for future spot prices.

Yes, the voluntary carbon market is generally less regulated and more diverse, leading to a broader range of prices.

In contrast, compliance markets (like the EU ETS or UK ETS) operate under strict policy caps and trade allowances rather than project-based credits.
For reference:

• EU ETS and UK ETS prices hover around $80 and $50 per tCO2, respectively.
• CDR project costs span a wide range, from about $20 to over $1,000 per ton, depending on the specific removal approach and its level of technological maturity.

Each market serves different purposes and buyer profiles but increasingly influences one another.

We maintain strong relationships with developers, brokers, registries, and market platforms to access verified pricing information. Every data point is cross-checked and standardized before inclusion in our models to ensure accuracy and comparability.

Carbon credit prices are expected to rise over the long term, though with short-term fluctuations as the market matures.
Several key factors are shaping this outlook:

• Corporate demand for verified offsets continues to grow, tightening supply and putting upward pressure on prices, particularly for projects with strong additionality and verification standards.
• Article 6 developments are gradually linking voluntary and compliance markets, which may lead to higher baseline prices as regulated demand enters the VCM.
• Increased focus on high-quality, durable carbon removals (such as biochar, enhanced weathering, and DAC) is driving a clear price premium for permanence and verifiability.

At AlliedOffsets, our Forecasting model provides forward-looking insights into supply, demand, and pricing trends up to 2050, segmented by sector, region, and project type.

This enables users to explore how policy shifts, corporate commitments, and technology costs could influence future carbon prices globally.