Carbon removal credits explained: why removals are not the same as offsets

Carbon removal credits are not simply better offsets with a higher price tag. They support a different kind of climate claim, carry a different evidence burden, and force buyers to ask a harder question: what exactly has been removed, how long will it stay stored, and what claim can be made without overstating the result?

The carbon market is splitting into claim tiers. Some credits finance avoided emissions. Some support emissions reductions. Some claim to remove carbon dioxide from the atmosphere and store it. Those differences are not technical decoration. They change the price, the risk, the evidence, the buyer pool and the wording a company can safely use.

The central idea is simple: a removal credit is not a shortcut around emissions reduction. It is a claim that carbon dioxide has been taken out of the atmosphere and stored outside it. That makes removals especially important for residual emissions in net zero strategies, but it also makes them harder to evaluate. The buyer is not just buying a tonne. The buyer is buying a storage promise.

That is why removals sit at the centre of so many carbon-market debates. They are needed for credible net zero claims, according to the logic used by the Intergovernmental Panel on Climate Change (IPCC), the Science Based Targets initiative (SBTi) and the Oxford Principles for Net Zero Aligned Carbon Offsetting. But they are also scarce, expensive, technically varied and easy to misdescribe.

Quick answer

Removal is a different claim

Most carbon credit confusion starts with the word "offset." It can make very different climate activities sound interchangeable. A forest conservation credit, a cookstove credit, a methane capture credit, a biochar credit and a direct air capture credit may all be sold as carbon credits, but they are not doing the same thing.

Avoidance credits usually claim that emissions were prevented compared with a baseline. Reduction credits usually claim that emissions were cut from an activity or process. Removal credits claim that carbon dioxide already in the atmosphere was removed and stored. Each can be useful. None should be treated as automatically equivalent.

This distinction matters because public claims are becoming more disciplined. A company that says it has "neutralised" residual emissions needs a different evidence base from a company that says it has made a climate contribution. The Voluntary Carbon Markets Integrity Initiative (VCMI) and other claims frameworks increasingly push buyers to separate emissions cuts, contribution claims and offset-style claims rather than treating all credits as a single reputational tool.

Why removals matter for net zero

Net zero is not the same as buying offsets. A credible net zero pathway starts with cutting emissions across the value chain. Only residual emissions that are very hard to eliminate should be balanced with removals. That is the logic behind the strongest net zero frameworks: reduce first, then neutralise what remains.

This is where removal credits become strategically important. They are the part of the carbon market most closely linked to the final stage of a net zero claim. Avoidance and reduction credits can finance useful climate activity, but they do not remove a company's residual emissions from the atmosphere. Removal credits attempt to do that.

The practical consequence is that removal demand is likely to grow where companies are serious about net zero, but the market cannot scale on narrative alone. Buyers need to know whether storage is short-lived or durable, whether the project is additional, whether the registry record is clear, and whether the claim fits the buyer's own emissions-reduction progress.

Nature-based removals and durable removals

Carbon removal is not one market. It is a family of project types with different costs, risks and storage profiles. Some removals rely on ecosystems. Some rely on engineered systems. Some sit between the two.

A buyer should not ask only whether a credit is a removal. The better question is what kind of removal it is. A low-cost nature-based removal may deliver biodiversity or community benefits, but it may also carry reversal and measurement risks. A durable engineered removal may offer stronger storage claims, but it may be expensive, energy-intensive and supply-constrained.

Durability is the core issue

Durability means how long the carbon is expected to stay stored. In carbon removal, this is not a side detail. It is the difference between a temporary storage claim and a long-term neutralisation claim.

Some biological storage can be valuable but vulnerable. Trees can burn. Soil carbon can be released if land management changes. Peatland restoration can fail if hydrology is not maintained. That does not make nature-based removals worthless, but it means buyers need buffer pools, reversal rules, monitoring plans and conservative claims.

Durable removals such as mineralisation, geological storage, some biochar pathways and some direct air capture systems are often marketed as higher-integrity because the storage may last for centuries or longer. That can be powerful, but it does not remove the need for evidence. The buyer still needs to understand lifecycle emissions, methodology assumptions, storage monitoring and whether the tonne has been issued, delivered and retired.

Who buys carbon removal credits?

Carbon removal demand is still concentrated among sophisticated buyers. That is part of what makes the market interesting, and part of what makes it fragile. High-profile buyers such as Microsoft, Stripe, Shopify and the Frontier buyer network show that demand exists, but they also show that the market is not yet broad-based.

The important nuance is that not every headline purchase is the same thing. Some buyers are purchasing issued credits. Some are signing forward offtake agreements for future tonnes. Some are funding early suppliers through advance market commitments. Frontier is now one of the clearest examples: its 2026 expansion took its stated commitment to $1.8 billion of permanent carbon removal, but its own dashboard still separates contracted tonnes from delivered tonnes. Read the dedicated guide to Frontier carbon removal before treating a market-building purchase as a completed claim.

The lesson is not "copy Microsoft" or "copy Stripe." The lesson is that serious buyers increasingly separate market-building support from completed offsetting claims. That distinction is useful for any company deciding whether a removal purchase is procurement, learning, contribution, residual-emissions neutralisation or public climate messaging.

Challenges and criticisms

Removal credits can fail in several ways. The project might not be additional. The carbon might not be measured accurately. Storage might be less durable than claimed. A reversal might occur. The same tonne might be claimed by more than one party. The buyer might use the credit to make a claim that is stronger than the evidence supports.

The most subtle risk is claim inflation. A buyer may purchase a small volume of removals and then use language that implies a much larger climate effect. For example, saying a product is "carbon removed" or "net zero" can be misleading if the buyer has not cut its own emissions, has not retired the credits properly, or has not separated residual emissions from ongoing emissions.

This is why removals should be assessed alongside carbon credit quality and claims guidance. The better the credit, the more important it becomes to avoid overclaiming. High-quality evidence can still be undermined by loose language.

How buyers should evaluate removal credits

A good removal purchase starts with the intended use. A company buying removals for internal learning can tolerate a different risk profile from a company making a public neutralisation claim. A company supporting early-stage technology may accept delivery risk if the claim is framed as procurement support rather than completed offsetting. A company using removals in annual reporting needs stronger retirement evidence.

Carbon removal prices

Removal prices vary widely because the underlying activities are so different. A nature-based removal can look cheap beside direct air capture, but the comparison is often misleading. The buyer is not buying the same storage profile, delivery risk or evidence package.

Price should be interpreted as a signal, not a verdict. Very cheap removals deserve scrutiny because measurement, monitoring and long-term storage all cost money. Very expensive removals deserve scrutiny too, because early-stage technologies can carry delivery risk, energy risk and scale-up risk. In both cases, the useful question is whether the price is consistent with the evidence and the claim.

For current market context, use our carbon credit prices guide and the wider carbon price tracker. Removal prices should not be compared only with avoidance credits. They should be compared by project type, durability, delivery status, registry, vintage and buyer use case.

Investor and climate finance interpretation

Carbon removals matter to investors because they reveal where the voluntary carbon market is trying to rebuild trust. The market is moving away from treating all credits as interchangeable tonnes and toward segmented claims: lower-cost climate finance, higher-scrutiny offsetting, and durable removals for residual emissions.

That does not mean every removal company or project will succeed. The sector has technology risk, policy risk, energy risk, verification risk and demand risk. But the direction of travel is clear: buyers that want stronger net zero claims are being pushed toward more durable evidence, and that is likely to keep removals at the centre of climate finance debates.

The interpretation is not that removals are a magic premium product. It is that climate claims are becoming more specific. A tonne from an avoided emission, a tonne from a forest sink and a tonne from geological storage may all appear in carbon-market dashboards, but they are not the same instrument.

When removal credits are useful

Removal credits are most useful when the buyer is honest about the role they play. They can help companies learn how to procure higher-integrity climate finance, support early market development, prepare for future neutralisation needs and address residual emissions where deep reductions have already happened or are credibly underway.

They are least useful when they are used to delay emissions cuts, decorate weak climate strategies or imply that ongoing emissions no longer matter. A company that buys removals while its direct emissions keep rising still has a transition problem. A company that buys a small volume of removals but makes broad product-level claims still has a claims problem.

The strongest use of removals is usually boring: clear retirement evidence, conservative wording, a visible reduction plan, and a narrow claim that matches the actual volume and durability of the credits purchased.

Buyer checklist

• Define the claim before selecting the credit.
• Separate avoidance, reduction and removal credits in internal records.
• Check the project type, registry, methodology, vintage and delivery status.
• Ask how durability is defined and what reversal rules apply.
• Review monitoring, reporting and verification documents before purchase.
• Check whether the purchase is a forward agreement or an issued credit.
• Keep serial numbers, retirement certificates and source documents.
• Use conservative wording if credits are not yet delivered or retired.
• Check whether claims guidance such as the Voluntary Carbon Markets Integrity Initiative (VCMI) or local green-claims rules affects the wording.
• Review prices against comparable removal types, not against the cheapest credit in the market.

FAQs

Are carbon removal credits better than ordinary carbon credits?

Not automatically. Removal credits answer a different climate question. They may be more relevant for residual emissions and net zero claims, but they can still be weak if measurement, durability, additionality or claims evidence is poor.

Do companies need removals to reach net zero?

Most credible net zero frameworks expect companies to cut emissions deeply first, then use removals to neutralise residual emissions that remain at the net zero target date. Removals should not replace near-term emissions reduction.

Is direct air capture the best kind of carbon removal?

Direct air capture can offer durable storage when paired with geological storage, but it is expensive and energy-intensive. It is not automatically better for every buyer. The right comparison depends on storage duration, evidence, delivery status, lifecycle emissions, price and claim type.

Are biochar credits carbon removal credits?

Biochar can generate carbon removal credits when biomass is converted into stable carbon-rich material and the methodology accounts for feedstock, production emissions, storage durability and monitoring. Buyers should check the specific methodology and registry record.

Can removals make a company carbon neutral?

Only if the buyer's claim is supported by the right emissions boundary, reduction plan, credit volume, retirement evidence and claims guidance. A removal purchase alone does not make a company carbon neutral or net zero.

Useful source links

• State of Carbon Dioxide Removal
• CDR.fyi durable carbon removal market year in review
• Frontier advance market commitment
• Stripe Climate and Frontier buying routes
• Shopify Climate and Sustainability Fund
• IPCC carbon dioxide removal factsheet
• SBTi Corporate Net-Zero Standard
• Oxford Principles for Net Zero Aligned Carbon Offsetting
• ICVCM Core Carbon Principles
• VCMI Claims Code of Practice
• Puro.earth biochar carbon removal methodology