How to source high quality carbon credits that support your decarbonisation goals
Stephen Daly, Global Team Leader for Voluntary Carbon Trading at Shell, shares practical guidance on how businesses can confidently purchase credible carbon credits and what to look for when evaluating quality.
Stephen Daly, Global Team Leader Voluntary Trading
Steve leads a team of global experts responsible for managing the supply and demand of Shell’s carbon credit portfolio, supporting the needs of the Shell Group and its customers. He has a background in commodity trading and portfolio management, joined Shell in 2017, and is based in London.
Addressing trust and credibility in carbon markets
The voluntary carbon market is projected to grow from $1.4 billion in 2024 to between $7–35 billion by 20301, driven by corporate decarbonisation commitments and a rising demand for high-integrity credits. This trend is reflected in Shell’s voluntary carbon market participant study2, which found that 59% of the companies surveyed view voluntary carbon credits as a necessary lever to reach their emissions reduction targets – but only for addressing remaining emissions after leveraging avoidance and reduction measures within their own value chain and operations2.
Yet despite growing momentum, trust remains a critical hurdle. The study2 showed three barriers consistently limit market engagement:
- Quality concerns, with permanence, additionality and co-benefits still difficult to verify.
- Reputational risk, with heightened scrutiny and concerns around greenwashing allegations.
- Regulatory uncertainty, with buyers hesitant to commit to long-term contracts without clear rules.
Stephen sums it up: “We need to build confidence in the market and certification standards will be crucial to the sector’s credibility. It is important that these standards evolve as we deepen our collective understanding of the projects and programmes that generate carbon credits and the concerns around them.”
To participate in the carbon markets with confidence, organisations need clarity on how carbon credits fit into their decarbonisation strategy, what defines high-quality credits, and assurance through robust third-party verification to guarantee integrity.
Insights into voluntary carbon market trends
The voluntary carbon market (VCM) is becoming a useful tool for helping companies work towards their net-zero goals. This research whitepaper explores what drives demand, how businesses choose and procure carbon credits, and why credibility and impact are critical to building effective carbon credit strategies.
Navigating the VCM with confidence
Incorporating carbon credits into a decarbonisation strategy can be complex. Companies can start the journey by measuring their carbon footprint, setting reduction targets, and defining the role credits will play. From there, three guiding questions can further help shape the approach:
1. Is your organisation buying carbon credits to meet short-term needs or looking to achieve long-term goals?
Each option offers its own benefits and risks. Organisations making spot purchases to address immediate needs may face exposure to price fluctuations. In contrast, those entering long-term offtake agreements can mitigate pricing risks but may be vulnerable if the counterparty fails to meet its obligations.
2. Which key credit attributes are important to your organisation?
According to the respondents from the participant study conducted for Shell2, the top three selection procurement criteria for carbon credits are:
- The reputation of the project developer
- Robust monitoring, reporting and verification (MRV) frameworks
- Price and cost-effectiveness
Defining what constitutes a high-quality carbon credit and establishing a tailored quality framework not only strengthens procurement decisions, but it also reinforces an organisation’s commitment to climate integrity.
3. Where is your organisation buying the carbon credits from?
Carbon credits can be acquired either directly from project developers in the primary market or through intermediaries in the secondary market. Each option carries its own set of trade-offs. Purchasing through an intermediary may increase costs but can reduce the burden of conducting time- and resource-intensive due diligence. On the other hand, buying directly from developers may lower costs but requires the organisation to take on the responsibility of vetting the projects themselves.
Stephen Daly, Global Team Leader for Voluntary Carbon Trading at Shell“The answers to these questions will depend on the needs and ambitions of each company. That is why having an overarching decarbonisation plan in place from the outset is crucial.”
How to identify high-quality, credible carbon credits
Ensuring credibility is one of the most challenging aspects of building a trustworthy carbon portfolio. “Buyers have to navigate various risks associated with the projects they invest in that ranges from under delivery of credits to challenges around health, safety, security and environment.” Stephen explains.
Reputational risk is another major concern. “Understandably, companies worry about what happens should the credibility of a project or its developers be called into question – and it can happen. It shows that, even after you have worked through all the potential issues to find a project you believe you can trust, you must still be ready to manage the impact of shifting regulations and standards.”
So how can businesses identify high-quality carbon credit projects?
“The first step is to make sure it holds independent third-party accreditation under an internationally recognised standard (such as Verra, Gold Standard or the American Carbon Registry),” says Stephen.
Organisations can also look out for emerging quality labels that help simplify the evaluation process. One such label is the Core Carbon Principles (CCP), which is gaining traction as a reliable benchmark, complementing other international quality standards that are helping organisations assess credit integrity more effectively.
Discover the difference our process can make for you
Global Technical Manager Sam Hoffer explains the due diligence criteria Shell uses to ensure quality in its carbon credit portfolio.
Exploring the impact of expert support on carbon credit purchasing
For companies that do not have the expertise to navigate carbon credit due diligence, collaborating with a supplier who goes beyond certification can be invaluable.
“At Shell, independent certification is the starting point for evaluating a project that generates carbon credits,” says Stephen. “To build on that, we have developed a due diligence process that helps give us confidence in the quality of the credits in our portfolio.”
This process involves an assessment of multiple dimensions that influence the credibility and impact of a carbon credit project, including:
Quantification
Measuring greenhouse gas reductions and removals
Baseline setting
Verifying that projects are compared to realistic and credible scenarios that would have occurred in the absence of the project
Permanence
Checking that emission reductions or removals are long term
Additionality
Checking that emission reductions or removals would not have happened without the finance from carbon credit sales
Safeguards
Checking the project does not have adverse effects on local communities, stakeholders or natural ecosystems
Benefit sharing
Checking that the positive outcomes (such as revenue, services or other benefits) reach local stakeholders
Leakage
Checking projects do not have unintended consequences that undermine the impact of the project
Double counting
Making sure emission reductions or removals can only be counted once towards decarbonisation targets
“By looking into these elements, Shell can help companies to evaluate risk and provide confidence that projects are achieving what is expected of them,” Stephen says. “This is where the due diligence expertise comes in.”
But there is more to selecting a supplier of carbon credits than due diligence, Stephen explains. “Companies could look for a supplier who is experienced in carbon credit trading as well as project development and financing,” he says. “At Shell, we can help customers purchase high-quality, credible carbon credits by leaning into our experience across these areas.”
Building a credible decarbonisation strategy
Carbon credits work best when they complement a company’s broader decarbonisation efforts. This means having:
- A clear decarbonisation roadmap – outlining emissions reduction priorities and where credits fit in.
- Defined procurement principles – specifying quality criteria, sourcing strategy, and risk management.
- An implementation framework – detailing how credits will be applied, tracked, and reported against targets.
“There’s no one-size-fits-all solution,” says Stephen. “Strategies should reflect each company’s unique ambitions.” Shell aims to support businesses in reducing emissions and can tailor carbon credit solutions to align with each individual company’s sustainability goals and strategy.
Ready to include carbon credits into your decarbonisation strategy?
Get in touch with our experts to find out how Shell can help you purchase high-quality, credible carbon credits from projects that make a difference.
Date of publication: February, 2026
Shell Environmental Products
Used in addition to low-carbon fuels and decarbonisation technologies, quality carbon credits offer business leaders the choice to compensate for emissions that cannot yet be avoided or reduced.
Disclaimers
1 Sustainability Magazine. “MSCI Hints That Carbon Markets May Thaw As 2030 Approaches”. January 8, 2025
2 Shell Low Carbon Solutions. “Voluntary carbon market participant insights into demand drivers, buyer behaviour, barriers and opportunities”.
*Carbon credits are not a substitute for switching to low-emission energy solutions or reducing the use of fossil fuels. Shell encourages their customers to focus first on emissions that can be avoided or reduced and only then compensate for the remaining emissions through the purchase and retirement of voluntary carbon credits. Where specific projects or project types generating carbon credits are referred to in this webpage, Shell does not guarantee that it has the carbon credits from these specific projects available in its current carbon credit portfolio; benefits of projects described are based on publicly available information from Project Developer Documents and/or provided by Project Developers. Shell does not guarantee projects will deliver the benefits exactly as described.
**Photos are for illustrative purposes only and may not depict the specific projects in Shell's current carbon credit portfolio.
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