Carbon markets can feel difficult to navigate. The rules are evolving, buyer expectations are changing, and terms like insetting, offsetting, contribution claims, and Carbon Dioxide Removal (CDR) are often used interchangeably when they should not be.

That was the focus of our recent webinar that I participated in along with the team from Accura: From compliance to competitive advantage: Navigating the new carbon credit reality

The clearest takeaway was simple. Companies often approach climate action backwards. They start with what is easy to buy or easy to explain, then ask later what regulation, reporting, and long-term strategy actually require. The stronger route is the opposite. Start with your business context. Start with the regulatory landscape. Then decide what role carbon credits or carbon removal should play.

Start with your roadmap

One of the strongest points in the session was that companies should not treat carbon markets as a last-minute add-on. They should first assess which regulations apply across their operations and value chain, what they are legally required to do, and what is more strategic or market-driven.

As Kasper Juul Naurgaard from Accura put it: “The reality is actually that you have to do the opposite. You need to plan your own journey and strategy, and therefore you should always start with assessing the regulatory landscape and what type of regulations are actually the ones applying across your activities as well as the value chains.”

Only then does it make sense to decide how to act. That action can take different forms: reducing emissions, avoiding emissions, removing carbon, or compensating. These options do not all do the same thing, and they do not carry the same regulatory or commercial value. A roadmap helps companies understand where each approach fits.

Insetting and offsetting are not the same

The webinar also explored the difference between insetting and offsetting. In simple terms, insetting relates to action within a company’s value chain. Offsetting sits outside it. That matters because regulators are increasingly rewarding action linked to real operational change, while becoming more cautious about broad offset-based claims.

This does not mean offsetting disappears. It does mean companies need to be more careful about how they use it, how they communicate it, and what they expect it to achieve.

The wider shift is clear: climate action is moving away from blurred claims and towards more specific, evidence-based approaches.

Quality is a buyer issue too

Another important theme was quality.

This is not only a project developer question. It is also a buyer question. When a company buys a credit, it is not just buying a climate-related product. It is also taking on reputational exposure.

As Kasper Juul Naurgaard from Accura said: “At the end of the day, the off-takers and the buyers of any credit or any intangible environmental product will also buy a reputational product with it. You really need to know what it is that you are actually getting into, what is the quality of this, and how do I ensure environmental integrity.”

That is why due diligence matters. Companies need to understand what they are purchasing, how quality has been assessed, and whether the claim will stand up to scrutiny. They also need to understand how different project types fit into a broader strategy, how durable the removal is, what risks are attached, and how future-proof the decision may be.

In the webinar discussion, this came through especially clearly in relation to carbon removal. Higher-quality removals may face tighter supply in the future, and that changes how companies should think about timing, portfolio building, and long-term risk.

For some sectors, this is already becoming strategic

The real estate example in the session brought this into focus. The discussion showed how carbon strategy increasingly intersects with finance, asset planning, permitting risk, and the future value of buildings. In that context, carbon is not only a compliance topic. It becomes part of how developers think about future-proofing assets and managing long-term exposure.

That principle extends beyond real estate. As regulation develops, companies in many sectors will need to think less about whether this matters and more about how to act in a way that is commercially sound.

You do not have to start big

The final message of the webinar was one many companies need to hear.

You do not have to remove all emissions at once. You do not need a perfect strategy before taking a first step. You can start small.

That might mean focusing first on Scope 1 and 2 emissions, piloting a project with a meaningful link to your value chain, or testing a smaller portfolio and building internal understanding before scaling further.

What matters is that the first step is deliberate.

Carbon markets are complex. But complexity is not a reason to wait. It is a reason to approach the space with more structure, better questions, and the right support.

The companies that will be best placed are not the ones that waited for the market to become simple. They are the ones that started building a strategy early.

If you want to listen back to the discussion access the webinar recording here.

In this episode of What Goes Up Must Come Down, Simon is joined by Stacy Kauk, Chief Science Officer at Isometric, a carbon registry. Together, they explore the challenges of scaling a market where buyers do not fully trust what they are buying, suppliers struggle to finance what they are building, and the science is still catching up with the ambition.

TL;DR

• Shopify's entry into carbon removal came from the top down, driven by a CEO who decided that a technology company with a small physical footprint could have more impact funding innovation than counting scope emissions
• Reducing emissions and removing carbon are not competing priorities — they are both necessary, and treating them as a trade-off is a false dichotomy that slows corporate action
• Isometric's buyer-paid model removes a key conflict of interest: because the registry is not paid per credit issued, it has no incentive to lower the bar
• Starting from an extremely high scientific bar, then relaxing requirements as data improves, protects the integrity of earlier credits and gives suppliers a stable foundation for project financing
• The market is currently facing a supply-demand mismatch: supply is scaling, but buyer uncertainty around reporting standards is creating hesitation — a gap that risks stranding the most promising solutions

The early days of CDR purchasing at Shopify

In 2018 and 2019, a lot of leading companies were beginning to think seriously about their emissions footprint. Microsoft had made its landmark 2030 net-zero commitment. Sustainability was rising up the corporate agenda. Shopify was thinking through the same questions — but arrived at an unusual answer.

"It was a top-down approach rather than a bottoms-up," Stacy explains. "The CEO really got into doing his own research and came back saying: we are a technology company. We have already taken steps to reduce our emissions. We do not have a significant physical footprint. If we were to focus on scope one, two, and three commitments, we are not really going to drive change in the world."

Instead, the decision was made to spend an annual budget on supporting novel CDR technologies — companies and approaches that needed early buyers to prove out their models. In September 2019, Shopify committed five million dollars a year to the leading climate solutions.

It was relatively early days. Most carbon removal technologies had seen little real-world deployment. There was no established registry, no agreed protocol, and no playbook for how a corporate buyer should evaluate a CDR project. Stacy and her team had to build that assessment capability themselves, collaborating with leading academics to review supplier-written methodologies one by one.

"At the end of the day, that is not how a market scales," she says. "That is not how we end up with solutions that have been tested, verified, and that buyers can trust."

Building a science-first standard for CDR at Isometric

After nearly five years at Shopify, Stacy joined Isometric — a carbon registry with a structural difference that drew her in immediately. Most registries are paid by the project developers whose credits they issue, which creates an obvious tension: the more credits issued, the more revenue. Isometric is paid by buyers.

"We are almost exactly the buyer's agent," Stacy explains. "We are not incentivised to over-credit. We are not incentivised to turn a blind eye."

Isometric started where no protocol existed. The team wrote the world's first methodology for enhanced rock weathering (ERW) — a process that accelerates the natural breakdown of silicate rocks to draw down CO₂ — as well as the first protocols for ocean alkalinity enhancement and wastewater alkalinity enhancement. Since then, the registry has expanded to cover biochar, Direct Air Capture (DAC), reforestation, and more.

The approach was deliberately conservative from the outset. "We started from an extremely high bar," Stacy says. "As we learn more and get data in, we are not usually tightening things further. We are relaxing the rules where we were being overly conservative." That direction of travel matters. Setting the bar low and raising it later calls into question the integrity of every credit already issued. Setting it high and gradually relaxing it as evidence improves protects past vintages and gives suppliers a stable foundation.

Transparency is central to how this works in practice. On the Isometric registry, buyers can click through to see a full mass balance of any project, inspect the underlying calculation, and trace the evidence all the way down to individual data points — a meter reading from the electricity supply to a site, for example. "Once you have that transparency, what it does for buyers is automatically reduce risk," Stacy says. "They have a public-facing registry disclosing exactly how the credit they purchased was issued. It is fully inspectable."

This is a significant departure from how carbon markets have historically operated — opaque price points, unknown provenance, no accessible documentation. That opacity was not just frustrating; it was a structural barrier to scale. Trust cannot be assumed. It has to be earned through verifiable data, and that requires openness.

Building CDR systems for scale — learnings from Isometric

Scaling the CDR market requires solving two problems simultaneously on the supply side: project financing and long-term purchase commitments. Each is difficult to secure without the other already in place. To help suppliers navigate this, Isometric allows projects to lock in their protocol requirements once they are ready to make a financing decision. That certainty matters enormously to the investors and lenders assessing whether a project stacks up.

On the demand side, the picture is more complicated. The market is currently facing what Stacy describes as a mismatch: supply is scaling up, but buyer behaviour is hesitant. The reason is uncertainty around reporting standards — what kind of credit can be used for which purpose, how different scopes and subscopes should be handled, and how CDR fits within frameworks like the Science Based Targets initiative (SBTi) and the Greenhouse Gas (GHG) Protocol.

"Some buyers are just hanging out and not purchasing anything until this is sorted," Stacy says. "Others are over-procuring and diversifying their portfolios so they are ready for anything." Both responses are understandable. Neither is good for the market. The risk is a valley of death: a period where supply and demand fail to meet, stranding some of the most promising solutions right at the moment they are trying to move from pilot to commercial scale.

"We made a lot of progress in the 2020s, and I think that is what people sometimes forget," Stacy says. "This industry has come really far in roughly eight years. We cannot afford to have demand gaps that erode that." Her view is that a scientifically defensible, transparent bar — one that is honest about what is known and what is not — is far more valuable than a perfect standard that delays action. Buyers who have made net-zero commitments and are thinking carefully about how different instruments match their different emission types are already doing the right thing. The task now is making it easier for more of them to follow.

Conclusion

The CDR market has moved from theory to practice faster than most people expected. Real credits are being issued against real protocols, backed by data that independent scientists can scrutinise. That is genuinely remarkable progress.

But the next phase is harder. Scaling from thousands of tonnes to gigatons requires more than better science — it requires a market where buyers trust what they are buying, suppliers can finance what they are building, and the standards that connect them are stable enough to support long-term decisions. That means science-first registries, genuine transparency, and reporting frameworks that actually incentivise CDR procurement.

Stacy's career — from buying credits at Shopify to setting standards at Isometric — traces exactly this arc. The lesson from both sides is the same: quality is not a constraint on scale. It is the only way to get there.

If your organisation is ready to take meaningful climate action, consider Klimate as your partner in navigating the carbon removal market.