UK unveils plans to boost integrity of carbon and nature markets

Big Ben Clock Tower and thames river in London at England

The UK government has unveiled plans to strengthen voluntary carbon and nature markets as part of its broader strategy to position the country as a global hub for green finance and investment, while driving climate action and economic growth under its “Plan for Change”.

The proposals aim to support British businesses and organisations in navigating carbon credit trading, a key mechanism for financing low-carbon projects such as reforestation, the deployment of electric vehicles, and initiatives to reduce deforestation. Carbon credits represent a reduction or removal of one tonne of CO₂ or its equivalent, offering companies a route to support climate mitigation while managing their own emissions.

Although adoption of these markets is growing, the government acknowledges their potential remains underutilised due to a lack of clarity and concerns over integrity. Poor practices have eroded trust in some cases, prompting calls from businesses and environmental groups for clearer guidelines.

In response, a new UK framework will set out core principles to raise the integrity of carbon and nature markets. These include defining what constitutes a high-quality credit, ensuring environmental benefits are genuine, and encouraging greater transparency from businesses in their sustainability disclosures.

Estimates suggest carbon markets could be worth up to $250 billion globally by 2050, while nature markets could reach $69 billion. By increasing confidence in the system, the government believes British firms—including landowners and farmers—stand to benefit from new revenue streams and greater investment opportunities.

Climate Minister Kerry McCarthy stated: “Building up trust in carbon and nature markets is crucial to their success in driving meaningful climate action and real, lasting change for the environment. These principles will cement the UK as the global hub for green finance and carbon markets.”

Nature Minister Mary Creagh echoed the sentiment, adding that strengthening trust in voluntary markets would ensure funds are directed to “genuine environmental improvement projects” that support habitats, peatlands, and biodiversity, while creating income for rural stakeholders.

Industry leaders have welcomed the government’s direction. Mark Kenber, Executive Director at the Voluntary Carbon Markets Integrity Initiative (VCMI), said the proposals “play a vital role” in giving businesses the confidence to invest in climate action. He also praised the UK’s endorsement of VCMI’s Claims Code and the inclusion of guidance to support action on Scope 3 emissions—the indirect emissions within a company’s value chain.

The consultation also reflects the government’s commitment to growth-aligned regulation, and builds on recommendations from the Corry Review, including the proposed launch of a Nature Market Accelerator to streamline investment in nature-based solutions.

The government has opened a 12-week consultation titled Voluntary carbon and nature markets: raising integrity, inviting responses from industry and the public.

The Integrity Council for the Voluntary Carbon Market (ICVCM) also welcomed the move. Onel Masardule, Co-Chair of the Indigenous Peoples and Local Communities Engagement Forum at ICVCM, stressed the importance of recognising Indigenous rights in high-integrity carbon markets, calling on other governments to follow the UK’s example in endorsing the Core Carbon Principles (CCPs).

As Britain seeks to lead in climate finance, the government notes that the clean energy sector has already attracted £43.7 billion in private investment since July, with the net zero economy growing three times faster than the wider economy last year and employment in the sector rising by over 10%.

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