October 8, 2025
The Voluntary Carbon Market (VCM) in New Zealand enables organisations and individuals to offset emissions through verified projects, driving high-integrity climate action and local restoration.
The voluntary carbon market allows organisations and individuals to purchase carbon credits to compensate for their greenhouse gas emissions. These credits represent verified emissions reductions or removals from specific projects around the world. Credits are called ‘voluntary carbon credits’ because the organisations purchasing the credits are not required to do so by law. Instead, they voluntarily commit to reducing their emissions, often as part of corporate sustainability goals or climate leadership strategies. While most voluntary buyers are businesses or large corporations, individuals can also participate either as part of personal climate commitments or to support specific projects and causes they care about.
Voluntary carbon credits can be generated by a wide range of project types, including:
These credits are bought and sold on various independent voluntary carbon marketplaces around the world. The price of credits is determined between buyer and seller, and can vary widely depending on the type of project, the standard under which the credits were issued, the co-benefits (like biodiversity or community development), vintage (the year the credit was issued), and overall market demand. Unlike government-run compliance markets described below, there is no single clearinghouse or exchange. Voluntary carbon trades happen through brokers, direct sales, or online platforms. Some high-integrity projects fetch premium prices, while others are traded more like commodities.
To understand the voluntary carbon market, it helps to understand how it is separate and distinct from compliance markets, which are set up and governed by law.
Compliance markets are created by national, state, or regional governments through legislation and policy frameworks. They are designed to ensure that emitters comply with legally binding emissions caps, who are typically large industrial or energy producers. In these systems, entities may either reduce their own emissions or purchase carbon credits or allowances to comply with their legal obligations. The compliance market is therefore where these companies buy carbon credits for compliance purposes.
In New Zealand, our compliance market is the New Zealand Emissions Trading Scheme (NZ ETS). Organisations required to participate are able to buy and then retire New Zealand Units (NZUs) to meet their obligations. NZUs can be generated for sale by activities that remove or reduce emissions, such as eligible forestry operations. These units are tracked and governed through a government-run registry, and the system is enforced through compliance checks and penalties.
As voluntary markets are often not established or enforced by law and credit buyers are not under any legal obligation to participate, voluntary markets operate independently from direct government regulation (and are still covered by general commercial laws such as fraud, consumer protection or environmental regulations). Instead, the voluntary market is governed by carbon crediting schemes or standards. These are private or non-governmental organisations that define the rules for how credits are issued, verified, and traded.
Some of the most established schemes include:
- Verra’s Verified Carbon Standard (VCS)
- Gold Standard
- Plan Vivo
- The Climate Action Reserve
These schemes provide the governance, methodologies, auditing, and monitoring needed to ensure that the carbon credits represent real, additional, and verifiable emissions reductions or removals.
New Zealand’s voluntary carbon market has existed in various forms for over a decade, operating alongside the country’s regulated emissions trading system. In the early years, organisations looking to offset their emissions had two primary options:
While NZUs were designed for use within the compliance market, they have also been used voluntarily by organisations seeking to demonstrate local climate action. In part, this has been a response to very limited availability of New Zealand-based projects certified under international voluntary standards. One early example was the Burwood Landfill Gas project in Christchurch, which issued credits under the Verified Carbon Standard, and the Rarakau Rainforest project issued credits under Plan Vivo, but the overall number of projects since has been limited.
Over its early years, the voluntary carbon in New Zealand has grown slowly, facing some key challenges:
Throughout this period, the Ministry for the Environment provided non-binding guidance to help corporate buyers assess credit quality. However, no legal framework governed how voluntary credits should be created or transacted. As international standards evolved and buyer expectations grew, interest began to rise in developing high-integrity, New Zealand-based projects certified under international standards.
After decades of development, the voluntary carbon market had grown significantly but remained highly fragmented. Concerns about credibility, greenwashing, and inconsistent methodologies began to undermine trust in the market.
In 2021, the Integrity Council for the Voluntary Carbon Market (ICVCM) was established to address these challenges and establish a single unified approach to defining high-integrity carbon credits based on rigorous science and governance.
The ICVCM introduced the Core Carbon Principles (CCPs), which include:
1. Additionality
2. Real and Quantifiable
3. Permanence
4. No Double Counting
5. Robust Baseline and Monitoring
6. Validation and Verification
7. Sustainable Development Benefits and Do No Harm
8. Contribution to Net Zero
9. Transparency
10. Governance
To be recognised as high-integrity, carbon credits must be issued by a scheme approved by the ICVCM. International standards such as Verra (VCS), Gold Standard, and Plan Vivo have sought ICVCM endorsement to be able to issue CCP-approved carbon credits.
Following these developments, Toitū Envirocare as New Zealand’s only ISO-accredited provider of carbon and climate certifications, are now moving towards accepting credits that meet the ICVCM’s CCPs and are issued under approved international standards. This means they are phasing out the use of NZUs as voluntary carbon offsets and organisations will no-longer be able to use these to achieve ISO-compliant certification.
This move represents a broader shift toward long-term environmental integrity, robust co-benefits, and alignment with global best practice.
After several decades of experience engaging with the voluntary carbon market, New Zealand businesses are increasingly focused on strengthening the integrity of their emissions reduction and offsetting efforts. Many have closely followed international developments that define what high-integrity climate action looks like, particularly the emergence of the ICVCM and its Core Carbon Principles.At the same time, there is growing momentum to ensure that funds spent on carbon credits directly support climate-positive projects within New Zealand, rather than being directed overseas. This evolution in the market has led to a rising demand for New Zealand-based carbon projects that align with international best practice, certified under internationally recognised standards and approved as meeting the CCPs and the ICVCM framework.This shift signals a new phase in the New Zealand voluntary carbon market: one that prioritises long-term environmental integrity, robust social co-benefits, and global credibility. It is a direction strongly supported by Toitū Envirocare’s decision to move away from NZUs, and reflects a broader commitment to helping New Zealand organisations step confidently into the internationally aligned, high-integrity space of carbon offsetting and climate leadership.
