Climate that works for you: how voluntary carbon credits (VCCs) help raise funds

What are voluntary carbon credits?

Voluntary carbon credits are certificates confirming that 1 tonne of CO₂ (or the equivalent of other greenhouse gases) has been reduced or removed from the atmosphere.

This can happen, for example, when:

• a solar or wind power plant replaces electricity generated from coal or gas;

• a farmer changes soil management practices, allowing carbon to accumulate in the soil;

• a forest is not logged but instead preserved or restored.

📌 These reductions or removals can be quantified, verified, and sold on the international Voluntary Carbon Market (VCM).

Why do companies pay for this?

Thousands of companies worldwide have committed to climate goals of becoming “carbon neutral” or significantly reducing their emissions. Not all processes can be quickly decarbonised, so businesses:

• invest in climate projects;

• purchase carbon credits;

• offset their own emissions.

For project owners, this means:

• an additional revenue stream;

• improved economic viability of projects;

• access to international climate markets.

Who ensures this is not just “green marketing”?

For a carbon credit to have value, it must be issued under a recognised international standard. Standards define the rules of the game: how emissions are calculated, how additionality is proven, and how double counting is avoided.

🔹 International Carbon Registry (ICR)

ICR operates based on the international standard ISO 14064-2 and its own procedures. For Ukraine, this is particularly important because:

• • projects can be registered without a national emissions trading system;

  • credits can be sold via international platforms;

  • the standard is suitable for energy, infrastructure, and industrial projects.

🔹 Verra — Verified Carbon Standard (VCS)

One of the world’s most authoritative standards, featuring clear methodologies across sectors, mandatory independent validation and verification, and the issuance of VCUs (Verified Carbon Units) that are actively purchased by international companies.

What does the path from idea to money look like?

The voluntary carbon credit mechanism is logical and sequential, clearly showing how real climate impact is transformed into a financial resource.

1️⃣ A project that reduces or removes emissions is developed
This is about concrete actions, not abstract intentions: renewable electricity generation, changes in agricultural practices, forest conservation or restoration, or more efficient land use. At this stage, it is crucial to define the baseline scenario—what would happen without the project.

2️⃣ A standard and methodology are selected
Clear rules exist for how CO₂ reductions or removals are calculated. The methodology defines what data must be collected, how it is processed, how additionality is demonstrated, and how manipulation is avoided. At this point, the climate impact stops being just an environmental idea and becomes measurable, comparable, and understandable for the international market.

3️⃣ Independent auditors verify the project
The project undergoes validation and verification by third-party auditors with no connection to the project owner. They review calculations, source data, baseline logic, and compliance with all standard requirements.

4️⃣ Carbon credits are issued for verified results
After successful verification, the project results are officially registered and carbon credits are issued. From this moment, the climate impact becomes a digital asset: each credit has a unique identifier, corresponds to one tonne of CO₂, and cannot be used twice. Essentially, environmental outcomes are transformed into a liquid commodity with market value.

5️⃣ Credits are sold on the international market
They can be sold via international platforms, climate brokers, or directly to companies offsetting their emissions. Prices depend on project type, standard, region, demand, and verification quality. Payments are usually made in foreign currency, and revenues become an additional financial flow that can support project economics, accelerate payback, or finance further development.

➡️ Result: additional income.

Sectors where this already works in practice

In several sectors, voluntary carbon credits already generate stable income, are supported by clear methodologies, and enjoy consistent demand from international buyers.

☀️ Renewable energy: stable volumes and fast entry

Renewable energy projects are among the simplest and most predictable ways to enter the voluntary carbon market. The logic is straightforward: every megawatt-hour of “green” electricity replaces power that would otherwise be generated from fossil fuels.

In practical terms:
1 MW of installed wind or solar capacity in Ukraine can reduce approximately 2,500–3,000 t CO₂ per year, depending on generation type and region. At current voluntary market prices, this translates into USD 7,500–20,000 of additional annual revenue per MW.

Real Ukrainian cases show that large wind projects can generate 70,000+ t CO₂ reductions per year, which even at a conservative price of USD 3–5 per tonne results in USD 200,000–350,000 of annual income. Credits can typically be issued annually for 10 years or more.

🌾 Agriculture and land use (AFOLU): higher prices per tonne

The agricultural sector is currently one of the most promising on the voluntary market. The reason is simple: such projects not only reduce emissions but also actively remove carbon, making credits more valuable.

Changes in agricultural practices—minimum or no-till farming, cover crops, optimised fertiliser use—allow carbon to accumulate in soils and reduce nitrous oxide (N₂O) emissions.

In measurable terms:

• • approximately 1–1.5 t CO₂e per hectare per year for regenerative agriculture;

  • around 13,000 t CO₂e per year for a 10,000 ha project.

At prices of USD 10–20 per tonne, such projects can generate USD 130,000–260,000 in annual revenue. Importantly, project horizons are typically 10–20 years, and the added benefit—improved soil fertility—remains even without carbon credit income.

🌲 Forestry and Improved Forest Management (IFM)

IFM projects are based on a simple idea: preserving forests is more profitable than cutting them down. Improved forest management prevents degradation, preserves biomass, and retains large amounts of carbon over decades.

A typical IFM project in the temperate climate of Eastern Europe can deliver from several thousand to tens of thousands of tonnes of CO₂ per year, depending on forest area and condition.
At prices of USD 10–20 per tonne, this can generate hundreds of thousands of dollars in annual potential revenue, with project durations of 20–30 years.

These credits are highly valued due to their long-term climate impact and high additionality.

🌳 Afforestation, Reforestation, and Revegetation (ARR)

ARR projects have a longer ramp-up period but ultimately create one of the most stable long-term financial flows. New plantings gradually accumulate biomass and soil carbon, enabling annual issuance of carbon credits.

Typical indicators include 5,000–10,000 t CO₂e per year at mid-stages of implementation, with credit prices ranging from USD 10–25 per tonne. This corresponds to USD 50,000–250,000 in annual revenue, depending on scale and location.

ARR projects usually last 20–30 years, making them attractive for investors seeking long-term, stable instruments.

Why this matters for Ukraine right now?

For Ukraine, voluntary carbon credits represent:

• 💸 an alternative to grants and loans;
• 🌍 immediate integration into international climate markets;
• 🌱 financing for recovery, energy, and agriculture;
• 🏡 new opportunities for communities and landowners.

Interested in the topic? To learn more details about this opportunity, please contact info@egrants.mindev.gov.ua.