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Explainer 4 min read 05 Feb 2026

Carbon trading in 4 minutes

How one tonne of avoided CO₂ moves from a farm to a factory's balance sheet.

By Ecarbify Team

1Register2Measure3Verify4Issue5Trade6RetireLifecycle of a Carbon Credit1 credit = 1 tonne of CO₂e · retired credits can never re-enter the market

A carbon credit is one tonne of CO₂ kept out of the sky. Trading is how that tonne moves from the project that created it to the company that needs to make up for its own emissions.

1. Two markets, two purposes

The Compliance market (India's CCTS, EU ETS, California) is where big polluters MUST buy credits by law. The Voluntary market is where any company chasing net-zero CHOOSES to buy. Both markets need real credits — Ecarbify supplies to both.

2. How a credit is born

Someone starts a project (planting trees, no-till farming, solar plant). They measure a starting point (baseline). They change practice. Satellites and auditors check the change is real. A registry (Verra, Gold Standard, or India's ICM) issues credits. A buyer pays. When used, the credit is 'retired' — it can never be sold again.

3. Why prices differ so much

A ₹200 credit and a ₹5,000 credit both say 'one tonne'. What differs is trust: how strong the methodology, how well the project proves the change wouldn't have happened anyway (additionality), how long the carbon stays put (permanence), and what side-benefits it brings (jobs, biodiversity, farmer income).

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