Looking at the Top 5 Carbon Credit Subtypes

Jun 25, 2024

Teal Flower
Teal Flower

In the last two years, companies have increasingly turned to specific subtypes of carbon credits to meet their sustainability goals.

In this post we dive into the top subtypes of carbon credits that have been most popular over the last two years:

  • REDD

  • Wind Energy

  • Hydropower

  • Solar Photovoltaic

  • Afforestation/Reforestation

Score Averages in Comparison

Those are the 5 types of carbon credits that have been retired most in the last two years. First, let’s have a look at their average Trust Scores and average Value Scores. Next, we will look into the score distribution for each of them.

Trust Score

The average Trust Score of each sub-type is pretty similar, with REDD as the negative outlier. This reflects the decline in public perception of REDD credits as they have been under increased scrutiny, mainly in the last 18 months.

Also, we see that only Solar Photovoltaic and Wind credits score better than 50 on average:

Value Score

The average Value Score shows a similar spread. Interestingly, the same two sub-types score best here:

Solar Photovoltaic and Wind.

Prices for those kinds of Avoidance credits have been low historically and even fell over the last two years. Therefore, when taking the Trust Score into account, those two sub-types score reasonably well in comparison to other sub-types:

Trust Score Distribution per Sub-Type

In a market where the quality of a credit can differ heavily from project to project of the same sub-type, it’s crucial to find the best ones in each peer group. As a buyer you need to pick the best projects to lower your headline risk.

In general, our Trust Score is made up of a base score, which is awarded based on the CCQI framework and a range of modifiers. Some of those modifiers come from third party ratings. In the charts below we show the range of Trust Scores for each subtype, broken down by registry. Some of the variation in the base scores for these projects will be affected by registry, as well as country and methodology, but for projects where modifiers are present this will often be a major factor in the final Trust Score.

But how much do scores vary within each sub-type?

REDD Credits

These are projects focused on Reducing Emissions from Deforestation and Forest Degradation. They help protect vital forest ecosystems, preserving biodiversity and reducing greenhouse gas emissions and have been a favored type of credit for many buyers up until the last 18 months.

Notes: All scored projects in this subtype are Verra projects. The major differentiator here comes from our modifiers: Sylvera ratings, Renoster ratings and how likely a project is to be CCP eligibile. This pushes certain scores higher and lower than the average.

If you’re looking for a REDD project that you can trust, look for one that has been rated by these third party providers and therefore has been scored highly in our Carbon Cockpit.

Wind Energy Credits

These credits come from projects that generate clean energy from wind power. They are key to transitioning away from fossil fuels and promoting renewable energy making them a common choice for companies. Historically they have been affordably priced and therefore quite popular, but as avoidance credits with declining additionality their importance is likely going to decrease going forward.

Notes: Here we have scored projects from mainly three registries: Verra, GoldStandard and CDM. CDM projects all have a similar score that is just above average, with the bulk of Verra scores achieving a lower score. Gold Standard projects have a range of scores but on average are slightly higher than the other two registries.

Looking beyond registry as a differentiator, the spread in scores can be attributed to our modifiers. Some have low third party ratings, which pulls their scores lower, and some have high probability of CCP eligibility, which pulls their scores higher.

If you’re looking for a wind project that you can trust, look for one with high probability of being CCP eligible, and one that either has a high third party rating—or at least does not have a low third party rating.

Hydropower Credits

These credits come from projects that harness the power of water to generate clean electricity—a reliable renewable energy source.

Notes: Here we see a similar pattern as above when we look at the registry spread, as well as from the modifiers.

If you’re looking for a hydropower project that you can trust, consider Gold Standard projects, as they are on average more highly rated in our Carbon Cockpit. Additionally, look at CCP eligibility and third party ratings, if these are available.

Solar Photovoltaic Credits

These credits come from projects that convert sunlight into electricity using photovoltaic panels. Solar energy is a cornerstone of the renewable energy transition.

Notes: Scored projects in this subtype come from Verra, Gold Standard and CDM. The registry pattern is similar here again, but there is a cohort of projects from all three registries that have above average scores. The differentiation here comes from third party ratings and CCP eligibility.

Again, if you are looking for a trusted Solar Photovoltaic project, look out for projects that score well on these two dimensions.

Afforestation/Reforestation Credits

These credit come from projects planting new forests or restoring deforested areas, these projects can offer dual benefits of carbon sequestration and biodiversity enhancement.

Notes: The spread of scores for this subtype is higher than for any of the other subtypes, suggesting that it will be even more important here to sort the trustworthy projects from the rest. There are three registries with scored projects: Verra, Gold Standard and American Carbon Registry.

At a glance, it would seem that Verra projects are seen as more trustworthy. As above, the more granular differentiation will come from third party ratings and CCP eligibility. Look for a Verra project in this subtype that also has a good third party rating and a high chance of being CCP eligible.


Each type brings unique benefits, helping companies not only offset their emissions but also contribute to broader environmental goals. When putting your offsetting strategy into practice, there are many risks to navigate, many pitfalls to avoid. Each type includes a vast variety of projects and it is crucial for every buyer to not only avoid the negative outliers, but to also look out for the top performing projects.

Ultimately, carbon credits are more than just offsets. When chosen carefully from trustworthy projects, they are strategic investments in our planet's future.

With Atem’s Carbon Cockpit, everyone can navigate offsetting with confidence, leveraging our comprehensive data and scoring framework to make the best choices for your company’s sustainability strategy.

Our free platform provides detailed insights and scores for over 7,000 carbon credit projects, empowering everyone to make informed decisions.

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