What’s Driving Buyer Decisions in the VCM?

As offset buyers’ preferences and project evaluation processes continue to evolve, TCT has seen the following factors emerge as key considerations for buyers evaluating carbon projects:

1. Price and use of carbon finance – Buyers are continuing to factor price into their purchasing decisions. They are diving into how and why carbon finance remains critical for ongoing project activities and monitoring to reduce the risk of future reversals and ensure carbon benefits are being accurately quantified. Sellers should continue to offer projects at different pricing levels so that buyers of any size can engage in the market and support climate action.

2. Location – Location has always been a major driver of buyer preference. While it may be challenging to find carbon projects in specific places, often there is a project nearby that will share a watershed or migration corridor providing tangible local benefits. Understanding the unique ecosystem services provided by each project can help demonstrate just how widespread the impacts of conservation projects can be. 

3. Ratings – Buyers are increasingly looking at ratings when reviewing new projects. While ratings reports can be insightful, buyers should maintain their own due diligence processes and clearly understand the rating agencies framework. Often times smaller projects are unable to receive a rating due to the agency’s fee – and this isn’t necessarily an indication of quality.

4. Relationships – Buyers are relying more on existing relationships. They are searching for trust in their offset suppliers. This means trusting the relationship with project partners, our ability to deliver offsets, and landowner involvement in the development process.

5. Co-Benefits – Nature-based projects often deliver a wide array of added benefits extending beyond just the carbon impact. Examples include supporting wildlife biodiversity when mature forests are maintained, or reduced erosion and nutrient runoff when native grasslands are protected from the plow. Buyers often seek projects with clear co-benefits that support the communities and natural environments they are happening in. 

These considerations offer a snapshot of where buyer preferences stand today and how they may continue to shape the market moving forward. Head to Carbon Offset Buyers – The Climate Trust to learn more about our work with carbon offset buyers across industries.