Carbon credits and carbon removal: what is it and when does it make sense?

Climate blog 5/5 (Last)

In summary

• A carbon credit represents one metric ton of CO2 equivalent that has been avoided, reduced, or removed from the atmosphere somewhere else.
• Credits do not count as reductions: they come on top of your own reductions, not in place of them.
• Avoidance and removal are fundamentally different. For emissions you truly cannot eliminate, choose removals.
• Since September 27, 2026, you can no longer call products “carbon neutral” based on offsetting (EmpCo Directive).
• Choose quality over price, keep credits separate in your reporting, and talk about contribution, not neutrality.

“And what do we do with the rest?”
Your baseline is in place, your transition plan too, and your measures are underway. Still, some emissions remain that you won’t be able to eliminate in the coming years. Then the question comes, from your director or from a client: can’t we just offset the rest? The short answer: you can, but it is not the same as reducing, you are no longer allowed to say whatever you want about it, and not every credit delivers what it promises. In this final blog, we explain what carbon credits and carbon removals are, and when they do make sense.

Where we are in this series
In [blog 1] we saw why you need to act today, in [blog 2] how a climate resilience analysis helps you map your risks, and in [blog 3] how to draw up a transition plan with realistic targets. [Blog 4] covered the foundation: calculating your emissions. In this fifth and final blog, we look at what remains once you have reduced everything you can.

What is a carbon credit?
A carbon credit is a certificate for one metric ton of CO2 equivalent that has been avoided, reduced, or removed from the atmosphere outside your own organization. A project, such as a forest conservation project or an installation that captures CO2, is verified by an independent party. A standard then issues the credits and registers them. When you buy a credit, you have it retired in your name, so no one else can use it.
There are two markets. In the compliance market, such as the EU Emissions Trading System (EU ETS), large emitters surrender allowances for their emissions. In the voluntary market, companies buy credits of their own accord. This blog is about the voluntary market.

Avoidance, reduction, or removal
Not every credit does the same thing. Broadly speaking, there are two types:

There is also a difference between nature-based and technological solutions. Trees, soil, and peat are often cheaper, but the storage is vulnerable: a forest can burn down. Technological solutions store CO2 for centuries, but they are more expensive and still in limited supply. The longer the storage, the better the credit in the eyes of many stakeholders.

What makes a credit reliable?
Investors, banks, and boards increasingly ask: how do you know your credits are sound? That is a fair question. Researchers at Vrije Universiteit Amsterdam looked at forest conservation projects and could demonstrate real emission reductions for only a fraction of the credits issued. Four questions will help you:

• Would the project happen without your money? If so, your purchase adds no extra climate benefit.
• How long does the CO2 stay out of the atmosphere? Ten years is something different from a thousand years.
• Is the ton not double counted? By the seller, another company, or a country.
• Who verified it? And can you look that up yourself in a public registry?

Guidance is also emerging. This year, the European Commission adopted the first methodologies for certifying permanent carbon removals, and international quality labels help you choose.
A well-known example is Gold Standard. Together with Verra, it is one of the two largest standards for carbon credits, with extra attention to local benefits for people and nature. Still, a label like that no longer tells the whole story on its own. So also check whether a credit carries the CCP label from the Integrity Council for the Voluntary Carbon Market (ICVCM), which assesses each methodology separately.

The Dutch carbon market
The Netherlands has developed its own market as well. The Dutch Carbon Market Foundation (Stichting Nationale Koolstofmarkt, SNK) was founded in 2019 as a follow-up to the Green Deal National Carbon Market and certifies projects not yet covered by existing policy. SNK works with fixed methodologies, independent verification of project plans and results, and a public registry. SNK is not a trading platform itself: you buy through the project or an intermediary. The government is buying too: with funding from the Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN), the Nationaal Groenfonds purchases certificates for long-term carbon storage in biobased building materials. In addition, a European framework is on its way and will be implemented in the Netherlands through a new bill. In July, the Commission also adopted methodologies for carbon farming in agricultural soils, peatlands, and new forests. Dutch credits are close to home and easy to verify, but often more expensive than international ones.

Buying or selling credits?
Most companies only think about buying. If you buy, check the registry, have the credits retired in your name, and document why you chose this project.
But you can also be on the other side. If you store CO2 yourself, for example as a farmer, landowner, or company in the biobased construction chain, you can sell credits. For that you need a recognized methodology, verification costs, and registration.

• Note: if you sell a credit, the buyer claims the climate benefit. You can then no longer include that same ton in your own footprint or communication.

Credits do not count as reductions
“What have you actually reduced, and what have you offset?” Clients and customers increasingly want to see those two kept separate. The principle from blogs 3 and 4 still applies: credits do not belong in your footprint and nowhere count as reductions. They play no role in the CO2 Performance Ladder (CO2-Prestatieladder): your certificate, and therefore your advantage in tenders, revolves around reduction. EcoVadis likewise looks at your footprint, targets, and demonstrable reductions. B Corp sees credits only as a last step for what remains, and under the CSRD you report them separately, alongside your emissions. In compliance systems such as the EU ETS and CBAM, voluntary credits do not count at all.
The CSRD now applies only to the largest companies, but you will feel its effects through your clients: “Can you provide the climate data we need?” So always keep credits out of that data.

Communicating about credits: what is still allowed?
“Can we still say we are carbon neutral?” Research by the Netherlands Authority for Consumers and Markets (ACM) shows that half of consumers see little or no difference between carbon reduction and carbon offsetting. Since September 27, 2026, claims such as “climate neutral” or “carbon neutral” for products are prohibited if they rely on purchased credits. This applies to communication aimed at consumers, but business clients are also becoming more critical.
So what should you say instead? Shift from offsetting to contributing:

• Not: “This product is carbon neutral.” Instead: “We are halving our emissions by 2030 and are also financing 500 metric tons of carbon removal per year.”
• Not: “Delivered climate neutral.” Instead: “In addition to our own reductions, we contribute to a certified Dutch peatland or biobased construction project.”

Five practical tips

1. Give credits a place in your transition plan. Decide whether they can play a role, work with a budget instead of “offsetting everything,” and set down your quality requirements.

2. See whether you can sell credits yourself. If you use biobased materials or store CO2 in your soil or products, you may be able to have credits certified and sell them.

3. Choose quality over price. Ask your provider which standard the project follows, how long the CO2 will be stored, and where you can find the credits in that standard’s public registry. And always have them retired there in your name, so no one else can claim the same ton. To align with your company story, you can also choose carbon credits that fit your business activities. A supermarket, for example, could invest in carbon credits from farmers in its own supply chain.

4. Keep credits separate and tell an honest story. Always report your emissions without credits, and list your credits on a separate line.

5. Check your claims. Search your website, packaging, quotes, and annual report for words such as “carbon neutral,” “climate neutral,” or “offset.” If you call a product or service neutral based on purchased credits, that has no longer been allowed in consumer communication since September 27. Such claims are risky in other communication too, so adjust them before a client or the ACM asks about them.

How can TOSCA help you?
TOSCA supports you with, among other things:

• Claim check
• Credit strategy in your transition plan
• Business case for buying or selling credits
• Procurement support
• Reporting and communication

In conclusion
We started with urgency, showed how a climate resilience analysis helps you map your climate risks, how to draw up a transition plan with realistic targets, and how a solid baseline lays the foundation. Carbon credits are the finishing touch, not the starting point: reduce first, and only then contribute to what remains.
Wherever you are on your climate journey, TOSCA can help you move forward: from climate resilience analysis and transition plan to your carbon footprint, the CO2 Performance Ladder, CSRD reporting, and a well-considered use of credits. Want to know more? Feel free to get in touch.

Author: Christien Pennings | christien@toscatribe.nl