The Voluntary Carbon Market in 2024: Trends and Opportunities

The voluntary carbon market entered 2024 in a state of significant turbulence. After rapid growth between 2019 and 2021, when transaction values tripled to approximately $2 billion annually, the market experienced a sharp contraction in 2022 and 2023. Transaction volumes fell by an estimated 30 to 50 percent, prices declined across most credit categories, and several major corporate buyers publicly announced pauses or restrictions on carbon credit purchases pending quality assessments. The proximate cause was a series of investigative reports questioning the climate integrity of large volumes of REDD+ forest credits, but the deeper cause was a structural trust deficit that had been building for years as market growth outpaced the development of robust quality standards.

Yet the same period that saw contraction in headline transaction volumes also saw remarkable progress in the market's quality infrastructure. The Integrity Council for the Voluntary Carbon Market published its Core Carbon Principles, providing the first genuinely cross-registry quality standard. Demand for high-quality engineered carbon removal credits grew substantially, with advance market commitments from Frontier, Microsoft, and others reaching billions of dollars. The landscape for who is buying, what they are buying, and why they are buying it shifted meaningfully — setting the stage for what many analysts expect will be a recovery built on more durable quality foundations. This article reviews the key trends shaping the voluntary carbon market in 2024 and assesses the opportunities ahead.

The Quality Flight: Premium Credits Outperform

The most significant structural shift in the voluntary carbon market over the past two years is the widening price gap between high-quality and low-quality carbon credits. While prices for unverified or questionable-quality nature-based avoidance credits declined sharply — in some cases by 50 to 70 percent — prices for high-quality engineered removal credits and verified nature-based projects held firm or increased. Direct air capture credits, biochar credits verified by Puro.earth, and enhanced weathering credits all maintained or grew their price premiums relative to the broader market.

This quality flight reflects a fundamental change in buyer behavior. Sophisticated corporate buyers who made headline-grabbing carbon credit purchases in 2020 and 2021 spent much of 2022 and 2023 reassessing their procurement practices in light of quality concerns. Many have emerged from that reassessment with more rigorous due diligence frameworks — greater attention to measurement methodology, stronger preferences for engineered removal over avoided emissions, and greater willingness to pay premium prices for credits that can withstand scrutiny. The result is a bifurcated market where high-quality supply is undersupplied relative to sophisticated demand, while low-quality supply sits unsold due to declining buyer appetite.

Institutional Developments: ICVCM and the Path to Standards

The most important institutional development in the voluntary carbon market in 2023 and 2024 has been the Integrity Council for the Voluntary Carbon Market's publication of its Core Carbon Principles (CCP) and the beginning of its assessment process for carbon credit categories. The CCP framework establishes ten principles covering governance, emissions impact, and sustainable development that all carbon credit categories must satisfy to receive the "CCP-approved" label. The principles address additionality, permanence, measurability, no double-counting, and other quality dimensions that have been the source of market integrity failures.

As of mid-2024, the ICVCM has assessed and approved a subset of credit categories — primarily covering energy efficiency, methane abatement, and some forestry methodologies — while other categories, including some REDD+ methodologies that have been at the center of quality controversies, remain under review. The rollout of CCP-approved labels is proceeding more slowly than many market participants hoped, reflecting the genuine complexity of assessing dozens of methodologies across multiple registries. But the direction is clear: over the next two to three years, the CCP label is likely to become a market standard that separates credible from non-credible credits in the eyes of sophisticated buyers, compliance frameworks, and financial regulators.

Emerging Compliance Linkages and Government Procurement

One of the most significant growth opportunities for the voluntary carbon market in 2024 and beyond is the increasing overlap with compliance frameworks and government procurement. Article 6 of the Paris Agreement, which establishes the framework for international carbon market linkages between countries, reached a significant milestone at COP28 in late 2023 with agreement on key operationalization details for both bilateral carbon trade (Article 6.2) and the UN-supervised crediting mechanism (Article 6.4). While implementation details are still being worked out, Article 6 creates a pathway for voluntary carbon credits to be used in national emissions accounting — potentially unlocking a much larger pool of demand from governments seeking cost-effective mitigation pathways.

Government carbon removal procurement is also growing, particularly in the United States and Europe. The U.S. Department of Energy's Carbon Dioxide Removal Purchase Pilot Prize, the European Commission's Innovation Fund, and the UK's Direct Air Capture and other Greenhouse Gas Removals Programme are all channeling government procurement dollars into engineered carbon removal projects. These programs tend to set high quality bars and require rigorous measurement and verification — creating opportunities for companies like Earthmover to provide the MRV infrastructure that government buyers require. The total government procurement commitment globally is still modest relative to the market's potential scale, but it is growing rapidly and is beginning to set quality standards that influence the broader voluntary market.

The Supply Picture: Capacity Constraints and Investment Flows

The supply side of the voluntary carbon market is undergoing a significant transformation. High-quality engineered removal supply remains severely constrained — total global DAC capacity is less than 100,000 tonnes per year, and the pipeline of planned capacity, while growing, is still orders of magnitude below the scale required for net-zero scenarios. Biochar supply is growing more rapidly, with producers scaling up in Europe, North America, and increasingly Southeast Asia, but the total verified biochar credit supply remains well below 10 million tonnes per year globally. Enhanced weathering projects are proliferating but still at very early commercial stages.

Investment flows into carbon removal are significant and growing. Venture capital investment in carbon removal startups reached over $5 billion in 2022, according to data from PitchBook, with direct air capture, enhanced weathering, and ocean-based approaches all attracting large rounds. The IRA's 45Q tax credit in the United States, which provides $180 per tonne for direct air capture with geological storage, has substantially improved the economics of DAC investment and is expected to catalyze multiple large-scale DAC hub projects. In Europe, the Innovation Fund and Carbon Contracts for Difference (CCfD) mechanisms are providing similar investment signals. The combination of government incentives, advance market commitments from corporate buyers, and growing VC investment is creating the conditions for significant supply growth over the next five to seven years — but that growth will take time to reach the volumes needed to meet projected demand.

What the Recovery Could Look Like

The voluntary carbon market's recovery from its 2022–2023 contraction is most likely to be quality-led rather than volume-led. The near-term growth will come from sophisticated buyers deepening their commitment to high-quality removal credits — making larger, longer-term advance purchases of engineered removal, improving the quality of their nature-based portfolios by shifting to verified, high-monitoring projects, and beginning to comply with emerging regulatory frameworks that require disclosure of credit quality. This selective recovery will drive price increases for high-quality supply and continued price pressure on low-quality supply, further rewarding the quality flight that is already underway.

Over the medium term — five to ten years — the recovery should broaden as engineered removal supply scales, ICVCM-approved credit labels become widely recognized by regulators and investors, and Article 6 creates new demand pools from national governments. The emergence of mandatory disclosure requirements in the EU and potentially the US will force more companies to be explicit about the quality of their carbon claims, which should further reward buyers and sellers committed to genuine quality. The market that emerges from this period of turbulence will likely be smaller in terms of low-quality credit volumes, larger in terms of high-quality credit values, and far more trustworthy than the market that existed in 2021.

Key Takeaways

• The voluntary carbon market contracted 30–50% in 2022–2023 following quality scandals, but the quality infrastructure (ICVCM CCP) made significant progress during the same period.
• High-quality engineered removal credits (DAC, biochar, enhanced weathering) maintained or grew price premiums while low-quality avoidance credits declined sharply.
• ICVCM's Core Carbon Principles represent the most significant cross-registry quality framework to date; CCP-approved labels will increasingly separate credible from non-credible credits.
• Article 6 of the Paris Agreement, U.S. 45Q tax credits, and European Innovation Fund are creating new demand pools and investment signals for high-quality removal.
• Total engineered removal supply remains well below 10M tonnes/year globally — far short of the scale needed for net-zero, creating significant investment opportunity.
• The market recovery will be quality-led: high-quality supply grows in value, low-quality supply faces continued price pressure and buyer withdrawal.

Conclusion

The voluntary carbon market of 2024 is a market in transition — contracting in some dimensions, growing in others, and being reshaped by quality imperatives that were too long deferred. For carbon market participants — buyers, sellers, investors, and infrastructure providers — the challenge and the opportunity of this moment is the same: to help the market build the quality foundation it needs to scale credibly. At Earthmover, we see our role as providing one essential piece of that foundation — the measurement and verification infrastructure that turns carbon removal claims into verifiable, quantified facts. The market needs that, and we are excited to contribute to it.