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2022: A year in review

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2022 came with its own set of challenges. Geopolitics caused all markets to suffer, and the voluntary carbon market (VCM) was no exception. The combination of external influences (the war in Ukraine, global energy crises), market criticism and uncertainties (carbon credit project failure, greenwashing, credibility of climate claims) led the VCM’s projected growth to decline for the first time in years.

This post will walk readers through some of the most defining developments of the last year.

Positive developments

Market growth from 2021 was not maintained in 2022

The growth the VCM experienced in 2021 was expected to set the pace for future years. However, global economic shocks deprioritised the VCM for companies and investors broadly in 2022. Predictions set out in 2021 anticipated an increase in carbon credit issuance and retirement, prices, and the size of the traded market. 2022 showed only one of these four predictions into reality, which was the size of the traded market.

While the volume of carbon credits retired fell by 3%, the traded volume more than doubled. This large jump can be explained by traders purchasing carbon credits from various exchanges. Once purchased, credits are kept in traders’ books until they can be sold to the final purchaser of the credits. At this point, the credits are retired from their respective registries.

When credits are ‘re-traded’, the traded volume doubles. Credits have been purchased and sold again to the end-user. There has been growth in the number of traders and brokers interacting with carbon exchange platforms and project developers to purchase these credits as intermediaries on the market.

The Taskforce for Scaling Voluntary Carbon Markets projected growth of the VCM to reach $50bn by 2030. This represents an annual growth of 43% from 2021’s traded value of $2bn. This projection proved to be incorrect, as the issuance of carbon credits declined by 24%, and retirements 3%. 2022 highlighted it will be a challenge for the market to reach its projected growth.

The Toucan Protocol and carbon credit retirements

In Q4 of 2021, Toucan Protocol comprised a large share of the retirements on the market. However, the purpose of these retirements were to tokenise carbon credits and exchanging these for Klima tokens. Klima tokens are a type of environmental cryptocurrency, and over 16Mt of carbon credit retirements in 2021 were made for this purpose.

In 2022, retirement of credits for the purpose of tokenisation was prohibited, unless explicit consent was given from the project developer. Discussions on the future of tokenisation in the VCM are currently on-going.

Nonetheless, excluding Toucan retirements, carbon credit retirements actually grew by 4% from 2021 to 2022. This is viewed as a positive outcome for the market given the challenging circumstances in 2022.

Cooling of carbon credit pricing

2022 started strong with high pricing in January. However, the trend did not continue after the Russian invasion of Ukraine was followed by the energy crises across Europe and Britain.

Using the CORSIA Eligible Token as a barometer for pricing on the market, 2021 showed steady growth throughout the year, while 2022 showed the opposite. A steady decline in pricing was seen throughout the year.

Nature-based carbon credits were hit the hardest by pricing declines, falling from around US$14/tCO2e in January to US$4/tCO2e in December 2022. The only category of carbon credits which did not suffer from a 50% or more drop in its pricing were household devices. This category remains very popular for its socio-economic benefits, as well as their environmental benefits.


UN General Secretary Antonio Guterres said at the end of 2022 that “national climate plans are falling woefully short”. The VCM needs more funding, from corporates or individuals to support its growth over the next decades.

If you would like to read about the review of 2022 in more details, please get in touch on, or with one of the members of the Plannet Zero team to get your copy of the January Voluntary Carbon Market Outlook.


Edited by Tiffany Cheung

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