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What are Carbon Credits?

What Are Carbon credits – Carbon Credits are a financial instrument used to offset greenhouse gas emissions. They represent a unit of greenhouse gas reduction or removal that can be bought and sold on carbon markets. These credits and carbon  offsets are now widely endorsed and purchased by some of the largest companies in the world. These organizations have all announced aggressive sustainability goals within their own business and encourage their vendors and affiliates to do likewise.

The idea behind these credits is to create an economic incentive for companies and organizations to reduce their greenhouse gas emissions and invest in clean energy and carbon reduction projects. By purchasing these credits, companies can offset their own emissions by supporting projects that reduce emissions or remove carbon from the atmosphere, such as renewable energy projects, forest conservation efforts, or carbon capture and storage projects.

Each carbon credit represents one tonne of carbon dioxide equivalent (CO2e) emissions that have been reduced or removed. The credits are verified by third-party organizations to ensure that they meet specific criteria and standards for carbon reduction. Once verified, the credits can be bought and sold on carbon markets, such as the Carbon Trade Exchange (CTX) which has the most efficient spot trading and the oldest exchange dating back to 2009,  European Union Emissions Trading System (EU ETS) or the Chicago Climate Exchange (CCX).

Carbon credits provide an economic incentive for companies to invest in carbon reduction projects and can help to drive the transition to a more sustainable, low-carbon economy. However, there are also criticisms of carbon credits, including concerns about some bad actors that attempt to sell offsets on projects that don’t really meet the qualifying standards of  effectiveness.  It is important to carefully evaluate the quality and credibility of carbon credits and carbon offset projects to ensure that they are making a meaningful contribution to reducing greenhouse gas emissions.

Modern Thermal Design is one of the top traders and providers of Carbon Credits in the world. We have a seat on the International Carbon Exchange (ICX) and have traders on staff to secure carbon credits for some of the largest MTD clients. These fortune 500 companies recognize the need to do more to save our world and putting their vast resources to qualifying projects.