IETA 2025 — High-Integrity Use of Voluntary Carbon Credits

At the Crossroads: How the Voluntary Carbon Market Moves Toward the Paris Agreement

When Markets Relearn Integrity—and Pragmatism

On 14 October 2025, IETA issued a notable statement in Bonn, Germany. It responded to the Article 6.4 Supervisory Body’s mid-year decision on the scope of market activities. The body’s earlier draft had proposed excluding nature-based and land-based mitigation from the Paris Agreement Crediting Mechanism (PACM). Had that draft stood, forests, agriculture, wetlands, soil carbon, and other nature-based solutions would have been sidelined.

IETA’s response was concise and firm: it “recognizes the more balanced and pragmatic outcome achieved in Bonn.” The final decision did not shut the door on nature-based projects; instead, it preserved their participation while upholding environmental integrity and scientific rigor. The turn signals institutional maturity—moving from exclusion to inclusion, from idealism to pragmatism—and gives the market fresh room for hope.

This is the backdrop for VCM Guidelines 2.0. It is more than a market manual; it is a systemic response. IETA aims to redefine the role of the voluntary carbon market (VCM) under the Paris Agreement—not as an onlooker to government systems, but as the runway into a sovereign mechanism.

The VCM grew rapidly over two decades, then ran into a crisis of confidence. Forest credits were challenged as overstated; blue-carbon projects faced community pushback; “carbon neutrality” slid from action to slogan. People started to ask: are carbon credits a solution—or an illusion?

IETA’s answer: do not abandon markets—repair them. VCM Guidelines 2.0 sets out seven high-integrity-use principles that draw a clean boundary of trust for companies, governments, and investors. They re-teach the market to be reconcilable, put credits back on verifiable footing, and position the VCM as the forward post of the Paris regime. The core logic is simple: Integrity is not an add-on value; it is the only value. Without high integrity, there is no high quality.

This article uses the Guidelines to answer three questions: Why did the VCM reach a point where it needed a systemic rescue? How do IETA’s seven principles reset corporate and market behavior? And once PACM is fully operational, in what form will the VCM endure? This is not a policy brochure; it is a systems analysis. In the long war of climate governance, integrity is not a virtue but a technology; pragmatism is not a tactic but the only viable path. The measuring stick for everything is that single line: Without high integrity, there is no high quality.

Chapter 1 | The End of the “Free Market” Is Institutions

On 14 October 2025, IETA issued a statement in Bonn responding to the Article 6.4 Supervisory Body’s decision. An earlier draft would have excluded nature- and land-based removals from the new compliance mechanism. Had it passed, forests, wetlands, cropland, and blue-carbon projects would have lost legal standing, pushing out more than a third of nature-based mitigation.

IETA’s stance was clear and cool-headed: it “recognizes the more balanced and pragmatic outcome,” noting the decision preserves space for nature-based mitigation while maintaining environmental integrity. The signal is crucial—institutions are learning that pragmatism beats exclusion. The carbon market’s future should not rest on idealized subtraction but on verifiable coexistence.

At precisely this moment, IETA released VCM Guidelines 2.0. More than a rule set, it marks a system shift. The message to markets: integrity is not an add-on; it is the only value. Because without high integrity, there is no high quality—and without quality, there is no market. The Guidelines aim to make credits credible again. Companies, governments, and investors must act under systems that reconcile, audit, and verify. Integrity is no longer a moral slogan; it is a technical capacity. In climate governance, trust is the hardest currency.

Chapter 2 | IETA’s History and Why These Guidelines Now

To grasp the Guidelines’ weight, look back to IETA’s evolution. Founded in 1999, IETA grew up alongside the Kyoto Protocol era, when markets revolved around allowances and project-based offsets. Carbon trading was novel; businesses, financiers, and regulators were still learning. IETA stepped into the vacuum—not a government body, but a cross-border business alliance to build market confidence, share methods, and translate compliance frameworks for companies.

Under Kyoto, IETA amplified industry’s voice: standardization, transparency, and design advice for emerging ETSs; partnerships with multilaterals and the UN; and a first-generation market ecosystem. But Paris changed everything. Kyoto’s project-offset logic gives way to Paris’s sovereign accounting: every credit must align with a national ledger (NDC). The laissez-faire VCM model—trading without sovereign alignment—no longer fits.

IETA, in turn, transformed—from a trading evangelist to a system integrator. The 2024 VCM Guidelines 1.0 were a declarative start. The 2025 2.0 is the hinge: it weaves in Article 6 architecture, SBTi corporate logic, and IFRS S2 disclosure into an actionable conduct code.

Three goals: provide credible guidance to firms; align the VCM with Article 6 compliance; and restore investor trust. IETA’s diagnosis is blunt: liquidity without trust is a mirage; to rebuild trust you must institutionalize integrity—integrity is not an add-on value; it is the only value.

Thus, the Guidelines are a manifesto as much as a manual: the VCM’s second life—moving from governance-free freedom to rules-based co-governance, with integrity embedded in processes, ledgers, and audits.

Chapter 3 | The Seven High-Integrity Principles: Relearning the Rules

IETA translates “high-integrity use” into seven principles, each fixing a specific failure of the past. Together, they operationalize the core line: Without high integrity, there is no high quality.

1. Align with the Paris temperature goal. Corporate action must align to 1.5°C. That means real timelines, owners, and trackable indicators. The language shift—from “carbon neutral” to “Paris-aligned net zero”—is not cosmetic; it embraces constraint. Integrity precedes the aesthetics of pledges.
2. Disclose emissions across all scopes. Scope 3 is the honesty test. Responsibility runs across the product life cycle. Without transparent integrity, there is no quality the market can accept.
3. Set science-based pathways. Targets need near-term milestones, quantified plans, and independent validation (SBTi logic). Quality is not the wrapping of a promise; it is the result of integrity.
4. Follow the mitigation hierarchy for VCC use. Reduce first, compensate second, offset last. Credits are accelerators, not substitutes. No behavioral integrity, no nominal quality.
5. Assure credit quality and additionality. Real, additional, durable, traceable, unique—and, where claims require it, backed by sovereign Letters of Authorization (LoA) and corresponding adjustments (CA). Without LoA/CA, credits are for contribution, not offsetting. Legal integrity determines market-recognized quality.
6. Be transparent about purchases and retirements. Name the project, the standard, issuance, retirements, purpose, and whether CA applies. Transparency is the conduit that converts integrity into quality.
7. Make honest, verifiable climate claims. Green-claims rules (EU) and AB1305 (California) now police vague “carbon-neutral” messaging. In the regulatory era, integrity isn’t a plus—it’s survival. No integrity, no quality.

Chapter 4 | System Integration: How the VCM Moves Into PACM

Under Paris Article 6, the VCM and sovereign ledgers converge. Article 6.2 governs transfers between countries (ITMOs). Article 6.4 builds a unified registry and rule set (PACM). The VCM’s role is to link practice with policy—giving firms and governments a lower-risk arena to pilot reconciliation, authorization, and disclosure.

PACM centers on sovereign authorization and transparent registries. Countries need platforms ensuring that corporate credits are correspondingly adjusted into national accounts. That shift is not only administrative; it legalizes credits—moving them from private contracts to recognized instruments. Only within such institutional integrity does “quality” gain both market and sovereign recognition.

Digital MRV is the backbone: satellites and sensors for monitoring, audit-ready reporting, and immutable tracking. As CAD Trust and the Climate Warehouse link national registries, integrity turns into a system property, and quality becomes the system’s outward face. The VCM becomes a sandbox; once practices mature, they flow into PACM. From VCM to PACM is the pathway where integrity begets quality.

Chapter 5 | Finance and the Global South: Integrity as the New Carbon Currency

Finance prices risk. Yesterday, credit prices reflected supply and demand; today, they reflect trust. The market will stratify: credits with LoA and CA—“gold carbon”—enter sovereign ledgers; credits without CA become “public-good contributions.” This is not opposition but division of labor—compliance utility versus social value. The dividing line is integrity level; the price signal is quality backed by integrity.

Investors are pivoting. Banks and insurers favor auditable gold carbon; brands and philanthropies often lean to contribution credits. The shift reduces greenwashing and channels capital to higher-impact abatement. Integrity premium is replacing crude price premiums.

For the Global South, Paris-alignment is both pressure and opportunity. Indonesia’s SRN, Thailand’s TGO, and Brazil’s NDC platforms are building national registries. With LoA/CA capacity and public registries, local projects gain global acceptance and communities capture benefits. When integrity becomes institutional habit, quality converts into durable national competitiveness.

Integrity and transparency are now currency. They determine price—and who may even enter the market. Integrity is the precondition for bankability; quality is the output investors can underwrite.

Chapter 6 | Without High Integrity, There Is No High Quality

This is the core proposition of VCM Guidelines 2.0. The market’s true value lies not in price but in integrity. Only on high-integrity foundations does quality mean anything; without integrity, even exquisite technique is packaging.

For years, “high-quality credits” were marketed as a technical label—sound methodology, accurate baselines, clean audits. But a credit is not just a product; it is a trust contract. Its value depends on social belief in real mitigation, proper entry into national ledgers, and resilience under audit and time.

IETA rewrites the logic: quality is the result of institutions, not merely a project trait. Without integrity, even strong projects aren’t “high quality.” No LoA/CA? It’s contribution, not offset. No public disclosure? No market trust—no matter how pretty the numbers.

High integrity is a precondition, not a bonus. The market must be visible, verifiable, and reconcilable. If any one is missing, technical perfection is still incomplete. That is the turn in 2.0: integrity is no longer a moral frame but the market’s admission criterion. Narrative once sustained markets; evidence must sustain them now. Integrity becomes a hard gate.

So “high-quality credits” should not be treated as a badge or brand but as the cumulative result of compliant behavior: rigorous methods, true monitoring, transparent registries, lawful authorization, and honest communication—together forming an integrity ecosystem. Only then does quality emerge.

A deeper inversion follows: yesterday, prices were driven by supply and demand; today, by trust. Integrity becomes currency; transparency becomes insurance. Investors size an integrity premium; governments draw lawful/unlawful lines with LoA/CA; companies earn social interest through frank disclosure. IETA sums it up: Integrity is not an add-on value; it is the only value. Without high integrity, there is no high quality. Quality is not a marketing label but a public duty. When every credit is used truthfully, transparently, and verifiably, the VCM becomes the Paris runway—and “quality” becomes the consequence of integrity.

Chapter 7 | Conclusion: From the Offset Illusion to Real Reconciliation

VCM Guidelines 2.0 is a systemic awakening. It reframes the core problem not as market failure but integrity failure. Three trends are decisive:

1. De-Kyoto. Governance replaces trading as the center of gravity.
2. Re-Paris. All mitigation must reach sovereign ledgers.
3. Fusion. Voluntary and compliance markets begin to co-evolve, not collide.

Over the next five years, as PACM goes live, registries interconnect, and digital MRV matures, the VCM becomes the forward base of the Paris system. Credits cease to be mere documents and become auditable public contracts. Integrity is the new carbon currency; transparency is the new market rule. High integrity is the only value; high quality is its result. Old markets survived on price; new markets run on trust. The free-market story is not over—it has been upgraded.

From the offset illusion to real reconciliation; from corporate self-talk to a shared human project—that is the direction IETA wants the world to see. In short: integrity precedes quality; quality flows from integrity.

References

IETA (2025). VCM Guidelines 2.0: Guidelines for High Integrity Use of Verified Carbon Credits. Geneva: International Emissions Trading Association.

UNFCCC (2025). Article 6.4 Mechanism Supervisory Body 18th Meeting Report (A6.4-SBM018). Bonn, Germany.

European Commission (2024). Directive on Green Claims (Proposal). Brussels.

California State Assembly (2023). AB1305: Voluntary Carbon Market Disclosures Act. Sacramento.

IPCC (2023). AR6 Synthesis Report: Climate Change 2023.

SBTi (2025). Corporate Net-Zero Standard (Version 2.0, draft for consultation).