Carbon credit

A credit commonly represents one tonne of carbon dioxide equivalent, subject to programme rules. Issuance depends on eligibility, monitoring, verification and registry procedures; a reduction alone does not automatically create a saleable unit. Credits can be retired for voluntary claims or used for regulatory compliance only where the applicable scheme permits. An emission allowance instead normally authorises a quantity of emissions under a cap-and-trade system. IFRS S2 disclosures and financial accounting depend on their applicable requirements and specific facts.