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The voluntary carbon market (VCM) is one of the fastest-evolving areas of climate finance, and it can be a lot to get your head around. Whether you're new to the space or looking for a refresher on how the market works heading into 2026, this piece covers the fundamentals, what the VCM is, who participates, and what's driving it right now.
What is the voluntary carbon market?
The VCM allows organizations to purchase carbon credits on a voluntary basis to compensate for their greenhouse gas emissions. Each credit represents one ton of CO2 equivalent that has been reduced, avoided, or removed from the atmosphere.
Unlike compliance carbon markets, such as the EU Emissions Trading System or California's cap-and-trade program, the VCM is not mandated by regulation. Companies participate to support their climate strategies, meet net-zero commitments, or address residual emissions that cannot yet be eliminated through operational changes alone.
The market operates through independent standards and registries that oversee how projects are verified, how credits are issued, and how they are tracked once retired. Major registries include Verra and Gold Standard. In total, transaction data is currently available across 35+ global registries covering all project types.
Who participates?
The VCM involves a range of participants. Project developers design and operate carbon projects across methodologies and geographies. Corporate buyers purchase credits as part of their climate strategies, these are the companies that have been active in the VCM by transacting carbon credits, whether through direct ownership or as the beneficiary of a retirement. AlliedOffsets currently tracks over 28,000+ corporate buyer profiles, with supplementary data including headquarter location, sector, and where applicable, internal carbon pricing and parent company information.
Brokers and traders play a different role, acting as intermediaries on behalf of the ultimate beneficiary of the credit. This can involve sourcing credits, executing purchases, or retiring credits through their own registry accounts. In some cases, brokers also retire credits on their own behalf, the distinction between buyer and broker activity is an important one when analyzing market trends.
Financial institutions are increasingly active, both as investors and as participants developing carbon-linked financial products. Consultants and advisors support organizations with strategy and credit selection.
What is driving the VCM in 2026?
A few things stand out heading into this year.
Corporate net-zero commitments remain the primary demand driver. Thousands of companies have set emissions reduction targets that include a role for carbon credits, and understanding which companies are likely to enter the market and why, is becoming increasingly important for the supply side. AlliedOffsets' latest report, The Future Buyers in the Voluntary Carbon Market, estimates that future corporate demand could reach approximately $2.27 billion, with sectors like aviation, energy, technology, and financial services among the most likely participants.
Regulatory developments are increasingly influencing voluntary market activity. CORSIA is creating compliance-adjacent demand for airlines, while disclosure standards from the ISSB and regulations such as the CSRD are pushing companies toward greater transparency around credit use. These developments are also driving demand for better emissions data, AlliedOffsets currently tracks emissions figures for over 1,000 companies, drawn directly from sustainability and annual reports.
Quality scrutiny is tightening. Integrity initiatives are raising the bar for what constitutes a credible credit, and the composition of the market is shifting toward higher-quality projects and a growing share of removals.
Learn more
If you're looking to go deeper on any of the topics covered here, the AlliedOffsets Carbon FAQs cover commonly asked questions.
For a detailed look at where corporate demand is heading and which sectors are most likely to drive the next wave of VCM participation, you can download AlliedOffsets' latest report, The Future Buyers in the Voluntary Carbon Market.
If you'd like to learn more about AlliedOffsets' data, you can book a meeting with the team.