New Analysis Reveals How Unsuccessful The 'VCM 2.0' Reform Is To-Date

Scoop

5 days ago

Boston, Massachusetts, 24 June 2025 – Today new research released by Corporate Accountability provides a deep dive into the largest carbon offset projects in the voluntary carbon market (VCM) in 2024, and explores how successful the 'VCM 2.0' reform is to-date at improving the integrity of the voluntary carbon market, as well as whether it is any more likely to reduce global emissions.
A carbon offset is an 'allowance' that governments, institutions, and corporations—from fossil fuel majors and airlines to fast-food and tech giants—purchase from environmental projects to supposedly count towards their respective greenhouse gas emissions reductions. Millions of these offset credits, which are linked up through a global carbon market called the VCM, are purchased by these actors annually and counted towards their emissions reductions, often in lieu of other emissions-reducing activities. Despite decades of failing to lead to global emissions reductions, the VCM remains one of the most widely supported forms of climate action, promoted by world governments, industry actors, corporations, and policymakers alike.
The analysis underscores the inherently problematic nature of increasing corporate and governmental investment in a scheme that remains fundamentally flawed and which is likely to continue to fail to reduce carbon emissions, all while distracting from meaningful climate action and even likely causing harm. The researchers conducted analysis of data on AlliedOffsets database as well as from industry ratings agencies like BeZero, and revealed that many of the world's largest offset projects in 2024 are unlikely to deliver global emissions reductions. Key findings include:
More than 47.7 million problematic offsets credits were retired through 43 of the world's largest offset projects in 2024, meaning they are not likely to lead to the promised emissions reductions. These 43 projects alone account for nearly one-quarter of the VCM.
Eighty percent of the offsets assessed in this analysis were problematic.
Nearly all (or 93%) of the projects retiring problematic credits are located in the Global South, countries that have historically contributed the least to climate change. This includes five projects that are in Brazil, the upcoming host of the U.N climate talks later this year.
Verra hosts the largest number of problematic projects and retired 43.6 million problematic offsets through the assessed projects, suggesting that its updated methodologies and measures taken to assure investors may not rectify the flaws.
Yet the approval and promotion of problematic offsets unlikely to lead to emissions reductions spreads much further than Verra. Three other registries were involved in retiring problematic offsets from these projects, and at least 17 verifiers were involved in approving these problematic offsets for VCM trading, to then be purchased by VCM buyers all around the world.
Forestry and land use projects had the largest number of problematic projects (23), followed by renewable energy projects (15), household devise projects (4), and chemical processes/industrial manufacturing projects (1).
All 37 projects assessed in greater detail had a legitimate risk of having at least one fundamental failing that rendered the projects unlikely to deliver—totaling nearly 40 million credits. These projects either had a legitimate or high risk of non-additionality (23), non-permanence (14), leakage (17), or over-credited (19).
The research suggests that despite ongoing reforms, the VCM 2.0 continues to largely fail, enhancing the likelihood of global climate action failure. Any advances through this reform appear to be limited in scope and potential, posing the question of why VCM supporters and investors continue to take on the liability of such great risk, and who is liable for these failures.
'This research serves as an eleventh-hour warning for supporters and investors of carbon offsets and the carbon market,' said Meena Raman, Head of Programs at Third World Network. 'The implications are clear—it's time to shift away from carbon markets, which have failed to deliver emissions reductions for decades, and reinvest into proven solutions that permanently reduce emissions at source and justly address the root causes of climate change. These problematic offsets have no role in the climate action plans of countries or corporations. These pollution allowances have commodified the climate crisis and erased real action. As a result of these sham approaches, millions of lives are now being traded so polluters can profit.'
The voluntary carbon market (VCM) has come under increased scrutiny thanks to multiple investigations by experts around the world revealing how these carbon trading schemes appear to give corporations cover to continue polluting while not actually reducing emissions, and even likely spurring significant harm. In 2023, a joint Guardian and Corporate Accountability investigation poked significant holes in carbon trading schemes seen to give permission to countries and corporations to continue burning fossil fuels.
According to Rachel Rose Jackson, Director of Climate Research & Policy at Corporate Accountability, 'The latest evidence calls on policymakers as well as investors and supporters of carbon offsets to reckon with why such liability is being taken to continue to worship the voluntary carbon market, and for what real purpose—if it is not likely to lead to emissions reductions? Who is responsible for the repeated failures of the 'checks and balances' that are supposedly plugging the holes of this sinking ship? And why are we trying to solve a global crisis with a scheme that is yet again condemning the planet, not catalyzing the meaningful action urgently needed?'
The failures of the VCM are likely much more vast than this research reveals, given that this research only provides one snapshot of problematic projects and fundamental failures that are likely to be more prevalent across the VCM as a whole. This suggests that critical reflections need to happen on the legitimacy of the VCM more broadly.
'The problem isn't just one bad actor; it's baked into the system even among those considered most reputable. And it is not limited to merely one actor or verifier in the carbon market ecosystem,' said Erika Lennon, Senior Attorney, Climate and Energy Program at Center for International Environmental Law. 'With mounting evidence, it's past time for major emitters to stop outsourcing their responsibility to the Global South and commit to a full fossil fuel phaseout – full stop, no loopholes. Clinging to carbon markets not only delays climate progress but also increases legal risks for companies betting on the credibility of these schemes instead of reducing their own emissions. Relying on and promoting offsets to address the climate crisis puts the planet's and all its inhabitants' future at risk and is as smart as relying on the arsonist to fight the fire.'