Despite the potential of carbon credits to fight climate change, the market is plagued by fraud, scams, and a lack of transparency that risk undermining global sustainability efforts and harming genuinely impactful projects. Behind the appearance of a green investment lies a reality of very low-quality products, especially from retail marketplaces, offering credits at unrealistic prices and without real environmental value. This is the case of greenwashing: making positive climate claims by purchasing credits that do not support effective projects, turning a sustainable promise into a profitable illusion.
The carbon credit market: an arena of poor transparency
Carbon credits represent one tonne of CO₂ avoided or removed thanks to sustainable projects, and in theory should be the ideal tool for offsetting emissions. However, reality is very different:
Fraud and scams: numerous reports, such as those published by The Guardian, reveal how large companies—often involved in scandals linked to dubious carbon credits—continue preaching sustainability while fueling a corrupt system.
Retail brokers/marketplaces and low-quality products: many brokers, especially those operating in the retail segment, accumulate carbon credits of very low cost and quality. These products, lacking real “additionality” — meaning the ability to generate additional environmental benefits — are sold as green solutions but in reality only contribute to greenwashing.
Misleading climate claims: using cheap carbon credits to declare environmental commitments amounts to greenwashing. Investing in products with no real value hides the truth behind a sustainable facade, deceiving stakeholders, investors, and consumers.
Risks and challenges in the carbon credit world
The issues in the carbon credit market go beyond transparency, also affecting the actual effectiveness of projects:
Quality variability of credits: not all credits are equal. The lack of uniform standards leads to significant variability in quality and the real impact of supported projects.
Lack of additionality: without guarantees that funded projects generate extra environmental benefits, carbon credits risk becoming mere theoretical offsets without real emission reductions.
Risk of greenwashing: in the absence of rigorous and independent checks, companies can easily “offset” their emissions by purchasing low-quality credits, giving the impression of climate commitment that does not translate into concrete actions.
Strategies to avoid greenwashing
To turn the carbon credit market into a genuine tool for sustainability, it is crucial to adopt control and regulatory measures that ensure transparency and quality:
Strict regulations: stringent standards are needed to standardize the market, ensuring each credit represents a real environmental benefit.
Independent verification: third-party bodies and independent audits must monitor and certify projects, ensuring their effectiveness and real additionality.
Investment in long-lasting projects: it is essential to prioritize long-term and impactful interventions, such as reforestation projects and renewable energy technologies, instead of symbolic solutions that yield no tangible benefits.
Data transparency: an open and verifiable system where every credit is traceable and its impact measurable is indispensable to rebuild trust among investors and the public.
Conclusion
Carbon credits, when used properly, can be a fundamental lever in the fight against climate change. However, their potential is severely undermined by scams, greenwashing practices, and low-quality products offered by opaque brokers. Large companies with past scandals continue preaching sustainability, while low-cost products with no real environmental value feed a deceptive system.
To ensure every carbon credit supports genuine and measurable projects, it is essential to implement strict regulations, independent controls, and full data transparency. Only in this way can greenwashing be avoided, and investments in the carbon credit market contribute effectively and durably to combating climate change.
Koalisation firmly believes in a future where sustainability is not just empty rhetoric, but a concrete and verifiable commitment to the well-being of our planet. It is time to move beyond greenwashing and invest in solutions that truly matter.