The voluntary carbon market is a rapidly evolving and growing sector that allows companies and individuals to offset their greenhouse gas emissions by purchasing carbon credits from projects that reduce, avoid, or remove carbon emissions. In recent years, the market has experienced significant growth and increased interest from a wide range of stakeholders.

According to the State of the Voluntary Carbon Markets 2023 report by Ecosystem Marketplace, the voluntary carbon market reached a transaction value of just under $2 billion in 2023.

Many companies, including major corporations, have made ambitious climate commitments, such as achieving net-zero emissions by a specific target year. To meet these goals, companies are increasingly turning to the voluntary carbon market to offset their unavoidable emissions. This has led to a surge in demand for high-quality carbon credits and a greater focus on the benefits of carbon projects, such as a reduction in the carbon footprint of agriculture, biodiversity conservation, and community development.

Nature-based solutions, such as reforestation, land use, and soil carbon sequestration, accounted for almost half of the market share at 46%. From 2021 to 2022, the average price of these types of credits increased significantly and there has been a notable surge in the volume of credits generated by projects involving carbon sequestration in agriculture. This is highlighted by the increase in the volume of credits from agriculture projects by more than 250%. It also highlights a significant growth in the number of agriculture projects participating in the credit market and generating environmental benefits, many of them by the application of biochar to improve soil conditions, increase crop efficiency, and sequester carbon for long periods.

Technological advancements have opened new opportunities for carbon removal and sequestration. Apart from large-scale technologies such as direct air capture, bioenergy with carbon capture and storage (BECCS), and enhanced weathering, the production of biochar using pyrolysis is attracting interest in the voluntary carbon market. While the former technologies are still in the early stages of development, pyrolysis is becoming an increasingly attractive technology for large-scale carbon sequestration.

But, as the voluntary carbon market grows, stakeholders are calling for more rigorous standards, and greater transparency in project reporting. Initiatives such as the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) and the Voluntary Carbon Market Integrity Initiative (VCMI) are working to address these issues and build confidence in the market.
In terms of the regulatory environment, governments around the world are recognising the role of the voluntary carbon market in achieving global climate goals. Some countries are exploring ways to integrate voluntary carbon credits into their national climate policies and compliance markets.

As the world continues to grapple with the urgent need to address climate change, the voluntary carbon market is poised to play an increasingly important role in driving emission reductions and supporting the transition to a low-carbon economy. However, ensuring the integrity, transparency, and effectiveness of the market remains a critical challenge that will require ongoing collaboration and innovation from all stakeholders involved.