Overview of the Voluntary Carbon Market in 2021

2 min read
November 4, 2022 at 11:27 AM

Published in August 2022, the report The Art of Integrity: The State of the Voluntary Carbon Markets, Q3 Insights Briefing, conducted by the NPO Ecosystem Marketplace, a Forest Trends’ initiative, provides an overview of the voluntary carbon market (VCM) at the global level. It details and analyzes the various elements leading the expansion of this market currently peaking at $2Bn in December 2021.


A growing market fueled by higher prices and a focus on nature-based solutions. The VCM breaks a new record of 500M carbon credits traded during the year 2021. Alongside this increase in traded volume, a price increase of nearly 60% between 2020 and 2021 has been observed. As shown in the graph below, the VCM has experienced its most striking expansion since 2005.

Voluntary Carbon Market size

It is important however to bring more precision and nuance to the VCM’s development. If carbon credits’ prices increased across nearly all offset project categories, the traded volume varies greatly depending on the category. Forestry and land use and renewable energy project types are by far the largest and the fastest growing. They respectively represented 57.8M and 93.8M MtCO2e in traded volume with a value of $315.4M et $101.5M in 2020. In 2021, they respectively represent 227.7M and 211.4M MtCO2e in traded volume with a value of $1,327.5M and $479.1M. By comparison, the traded volume of fuel switching projects has plummeted from 30.9M to 10.9M MtCO2e between 2020 and 2021.


Project types with non-carbon benefits rise in price and gain in popularity. If companies’ efforts are focused on reducing their GHG emissions, projects with co-benefits (i.e. environmental and social benefits outside carbon emission reduction) are becoming increasingly popular despite their higher price. The projects certified by the Community & Biodiversity (CCB) standard, the most used non-carbon benefits’ certification standard, have seen their traded volume skyrocket with a 277% rise despite a price increase from $4.57 to $5.25 per ton of CO2 between 2020 and 2021. Integrity is a criterion that increasingly trumps the price.


A large diversity of carbon credits traded between 2020 and 2021. More than 170 types of projects are currently available on the VCM. Firms use this diversification to select credits aligned with their goals and preferences, especially projects with non-carbon benefits. Amongst the 170 project-specific types of credits, 21 of them are forestry and land use offset projects, which is an exponentially growing category. It quadrupled its traded volume and significantly increased its market share from 28% to 46% from 2020 to 2021.


The voluntary carbon market is thus promising. Nature-based solutions, projects with additional social and environmental benefits as well as a more diversified set of carbon credits are the main drivers of the voluntary carbon market in 2021. The ClimateSeed Team is actively working to combat climate change, notably by offering access to our 30+ project portfolio with various co-benefits to reach all Sustainable Development Goals. Contact us to discover them.


Source: Forest Trends’ Ecosystem Marketplace. 2022. The Art of Integrity: State of the Voluntary Carbon Markets, Q3 Insights Briefing. Washington DC: Forest Trends Association.