The UK government has set out how it intends to improve confidence in voluntary carbon and nature markets, with new guidance for businesses due in spring 2027 and a proposed forum to coordinate oversight.
The government published its response to a 2025 consultation on 12 November. It identifies international benchmarks for carbon credit quality and encourages buyers to use them where suitable credits are available. It also stresses that buying credits should complement, rather than replace, efforts by organisations to reduce their own emissions and environmental impacts.
The measures are intended to make it easier for private investment to support climate and nature projects while giving buyers and the public greater confidence in the outcomes being claimed. The response does not impose a new legal requirement to buy credits or create a new regulator for the markets.
What the benchmarks mean
Carbon credits are associated with activities intended to reduce or remove greenhouse gas emissions. In a voluntary market, an organisation can choose to buy them rather than doing so to meet a legal obligation. Nature markets can cover a wider range of environmental outcomes, including biodiversity and nutrient management.
The government identifies the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles and assessment framework, together with the Paris Agreement Crediting Mechanism, as key benchmarks for high-integrity carbon credits used in voluntary climate action. Buyers are encouraged to prioritise credits meeting one or both standards where supply exists, while crediting programmes are encouraged to work towards alignment over time.
The distinction between a benchmark and an assessment of an individual project matters. A standard can assess how a crediting programme operates and the methods it uses, but that does not directly assess every project’s implementation. The response therefore also encourages buyers to consider independent credit ratings as part of their checks.
The government has not established a separate UK-specific claims standard or a new statutory definition of carbon neutrality in this response. Existing rules governing environmental claims continue to apply.
Guidance for businesses
The planned guidance is intended to take organisations through the use of carbon credits, from planning and selecting them to disclosure and retirement. Retirement is the point at which a credit is taken out of circulation for use. The guidance is due to replace relevant provisions in the existing Environmental Reporting Guidelines and will be tested with stakeholders during its development.
The response recognises several possible uses for high-integrity carbon credits. These include taking responsibility for ongoing emissions, addressing historical emissions and counterbalancing residual emissions at organisational net zero with high-quality, durable removal credits.
Those uses sit alongside a central condition: businesses should continue to address emissions within their own operations and value chains. Credits are not presented as a substitute for that work. Where companies publish transition plans, the government considers it good practice to explain whether and how credits support their decarbonisation strategy.
Ministers are also considering whether incentives could recognise organisations that follow the forthcoming guidance. Possible protections intended to reduce legal or reputational risks are under consideration too. Neither an incentive scheme nor a new protection should be treated as already in place.
Coordinating oversight
The government is working with regulators to establish a UK Carbon and Nature Markets Regulator Forum. Its intended participants include government departments, the Financial Conduct Authority, the Advertising Standards Authority, environmental bodies and relevant regulators in the devolved nations.
The forum would map existing oversight responsibilities, share intelligence and make recommendations on future priorities. It will not itself regulate the markets. The government plans to review its effectiveness after an initial phase in the first half of 2027.
A separate potential scheme for UK nature markets is also being explored with industry. The proposed Environmental Market Governance Scheme would be voluntary and industry-led. A decision on possible government grant funding for a pilot depends on initial work on its scope and design.
Standards for nature projects
Work is continuing on UK Nature Investment Standards, which are intended to provide more consistent requirements for projects and markets. Standards for biodiversity and nutrients were launched in March 2026. A standard covering nature-based carbon benefits is expected to be available for market adoption in 2027, while a code of practice on community engagement and benefits is due in early 2027.
Participants have been encouraged to assess themselves against the standards while they become familiar with them. A minimum two-year period of self-assessment was announced before a planned transition to accredited certification. A government-funded project to develop and test an assurance framework is expected to run from 2027 to 2029.
The latest response follows a consultation launched in April 2025 that drew 200 responses. A factual summary of that feedback was published in March 2026. The next stages will involve developing the promised guidance, coordinating the proposed forum and testing how standards and independent checks can work in practice.
