Carbon Removal Credit

A Carbon Removal Credit (CRC) is a standardized, digital unit representing the permanent removal of one metric ton of CO₂ from the atmosphere. Unlike a carbon offset, which often funds projects that avoid or reduce future emissions, a CRC is issued only after carbon dioxide removal (CDR) has been verified as complete. This token is minted on a blockchain as a non-fungible token (NFT) or a semi-fungible token, creating an immutable, transparent, and auditable record of the removal event, its methodology, and its unique environmental attributes. This digital representation is also known as a carbon removal token or a digital carbon removal unit.

The lifecycle of a CRC is governed by a digital MRV (Measurement, Reporting, and Verification) process. Data from sensors, satellite imagery, and third-party audits is cryptographically signed and recorded on-chain to prove the removal occurred. Once minted, the credit can be traded on a digital carbon market. The final and critical step is retirement (or burning), where the token is permanently taken out of circulation in a public on-chain transaction, ensuring the underlying ton of carbon is claimed and cannot be double-counted. This creates a clear, fraud-resistant chain of custody from removal to final use.

CRCs are generated by various carbon dioxide removal (CDR) methodologies, each with distinct permanence and verification requirements. Major types include Direct Air Capture (DAC), Bioenergy with Carbon Capture and Storage (BECCS), Enhanced Rock Weathering, and Durable Biomass Storage (e.g., biochar). The blockchain ledger stores key metadata for each credit batch, such as the project developer, geographic location, removal technology, vintage year, and the verification standard used (e.g., Puro.earth, CarbonPlan). This allows buyers to select credits based on specific quality and impact criteria.

The primary use case for a Carbon Removal Credit is for corporations and governments to credibly achieve net-zero or carbon-neutral claims by financing permanent removal to counterbalance their residual emissions. By leveraging blockchain, the market addresses longstanding issues of transparency and double-counting prevalent in traditional carbon markets. The public ledger allows anyone to audit the entire history of a credit, fostering greater trust and enabling the scaling of a high-integrity voluntary carbon market dedicated solely to removal, which is essential for meeting global climate targets.

A carbon removal credit is generated through a project that actively removes and durably stores atmospheric CO₂. This process, distinct from emission avoidance, involves methodologies like Direct Air Capture (DAC) with geological storage, enhanced rock weathering, or biochar production. Each project must follow a rigorous methodology approved by a carbon registry (e.g., Verra, Gold Standard, Puro.earth), which defines the rules for quantifying removal, ensuring additionality, and monitoring long-term storage to prevent reversal.

The credit lifecycle begins with project validation by an independent third-party auditor, followed by ongoing verification of the actual tons removed. Upon successful verification, the registry issues serialized credits to the project developer's account in its digital ledger. These credits can then be sold on a marketplace or via over-the-counter deals. The buyer, often a corporation with a net-zero target, purchases the credit to counterbalance their own residual emissions.

The final and most critical step is retirement. When a buyer uses a credit to make a climate claim, they must permanently retire it in the registry, publicly marking it as consumed and preventing double-counting. This retirement is the definitive link between a ton of CO₂ removed from the air and a ton of emissions claimed to be neutralized. The integrity of the entire system hinges on the permanence of the storage (often guaranteed via buffer pools) and the transparency of the registry's transaction ledger.

In blockchain-enabled systems, this process is tokenized. A verified credit can be minted as a digital carbon token (e.g., a Toucan-bridged BCT or C3-issued c3T), with its retirement recorded immutably on-chain. This introduces transparency and composability but requires careful bridging to ensure the underlying real-world credit is retired in the traditional registry, a process known as minting-and-burning.