One emissions reduction can return value to everyone who funds it
Suppliers recover value from the emissions reductions they make. Buyers reduce Scope 3 emissions at the suppliers they already buy from. Investors finance verified emissions reductions and hold the credits.
Choose a route
There are three ways to take part in the same verified emissions reduction.
Value back for emissions reductions
A credit in the supplier’s name for each verified tonne, allocated to co-funders or sold.
Reduce Scope 3 with suppliers
Co-fund a project at a named supplier and receive credits for the funded share.
Finance verified emissions reductions
Contracted credits backed by emissions reductions checked against a verification report.
Sectors where insetting fits
Insetting fits sectors with long supply chains and emissions that are hard to abate, led by shipping and low-carbon fuels.
From a shared supplier to a verified credit
Every project follows the same seven steps, and each step has a named owner and leaves a record.
- 1Supplier, buyers, Carbon3
Scoping and project definition
Buyers find a supplier they share in the Data Hub. With the supplier they define the change, the baseline, the methodology, the monitoring plan and each funder’s share.
- 2Verifier
Validation report
Before anything is built, the verifier reviews the design and confirms the project scope, baseline, additionality and monitoring plan.
- 3Supplier
Implementation
The supplier installs the change and records the monitoring data. Co-funders pay as agreed, often up front or against milestones.
- 4Verifier
Verification report
After the monitoring period, the verifier checks the data and states the verified emissions reduction in tonnes of CO₂e.
- 5Project developer, on the Carbon3 registry
Issuance to the project developer
Realized credits, one per tonne in the verification report, are issued to the supplier and recorded on the Carbon3 registry. Future credits can also be issued to it earlier, once the project is validated. They stay labeled Future, and buyers who take them carry the delivery risk. The verifier does not issue credits.
- 6Supplier
Allocation
Credits are transferred to each co-funder in proportion to its contribution. Every transfer is recorded.
- 7Each holder
Sale or retirement
Holders retire credits against their Scope 3 reporting, or sell the credits they do not need.
What each party puts in and takes out
Every project has the same four roles. Only the supplier and the funders hold credits.
Supplier
Owns the site and implements the project
Buyers
Companies that purchase from the supplier
Investors
Funds, lenders or treasuries
Verifier
Validation and verification body, separate from Carbon3
Credits follow the money. A funder that pays 50% of the project cost receives 50% of the verified credits, and the split is fixed before the first credit is issued.
Two apparel brands and an investor fund a dye house
A textile dyeing and finishing mill that supplies two apparel brands replaces a coal-fired steam boiler with an industrial heat pump. The brands and an investor share the cost.
Who pays what
| Funder | Share | Pays | Credits, years 1 to 5 | Of which future credits (years 1 and 2) |
|---|---|---|---|---|
| Buyer A (apparel brand) | 50% | €500,000 | 10,500 t | 3,000 t |
| Buyer B (apparel brand) | 30% | €300,000 | 6,300 t | 1,800 t |
| Investor C | 20% | €200,000 | 4,200 t | 1,200 t |
| Total | 100% | €1,000,000 | 21,000 t | 6,000 t |
Future and realized credits in this example
1At validation
The 6,000 tonnes planned in years 1 and 2 are bought as future credits, so the money funds the implementation and the holders carry the delivery risk.
2After each verification
The 15,000 tonnes verified in years 3 to 5 are issued as realized credits, one per tonne in the verification report.
Cost per verified tonne
Spread over 5 years of credits, the project cost comes to €48 per verified tonne, a figure to compare with the internal carbon price or with the CBAM certificate cost an importer faces. Real prices are not shown.
Assumptions
- Project cost €1,000,000, paid up front.
- Full rate of 5,000 t a year from year 3.
- Year 1 at 40% and year 2 at 80% while the heat pump ramps up.
- Credits are split in line with what each funder paid.
- One credit equals one verified tonne of CO₂e.
- No real companies, prices or projects. Fees are not shown.
- Illustrative split: the credits for years 1 and 2 are bought as future credits at validation; later years are taken as realized credits after each verification. The real split is agreed project by project.
Credits build over five years
Verified credits per year, split by funder, with the running total.
Credits per year, in tonnes
- Buyer A (apparel brand) (50%)
- Buyer B (apparel brand) (30%)
- Investor C (20%)
- Future credits, bought at validation
21,000 t in total over 5 years
Assumptions
- Same project and shares as the worked example.
- Every year passes verification at the full measured reduction.
- Real results depend on the project and its verification.
- Illustrative split: the credits for years 1 and 2 are bought as future credits at validation; later years are taken as realized credits after each verification. The real split is agreed project by project.
How the claims are treated
Here is what each standard is, and how it treats a reduction inside a company’s own supply chain compared with one elsewhere in its industry.
GHG Protocol: Scope 3 Standard
- What the standard is
- The Greenhouse Gas Protocol sets the accounting rules most companies use for their emissions. Its Corporate Value Chain (Scope 3) Standard, published in 2011, covers the emissions in a company’s value chain in 15 categories, from purchased goods and transport to the use of sold products. It has no market-based method for Scope 3, so purchased certificates or credits do not change the Scope 3 figure, unlike electricity in Scope 2.
- A reduction in the company’s own supply chain
- A reduction at a supplier the company buys from lowers its Scope 3 inventory when it shows up in the data the company uses, for example a supplier-specific emission factor for the goods it purchases. A spend-based average will not show it.
- A reduction in the industry, outside the company’s own supply chain
- A reduction at a producer outside the company’s own supply chain is not part of its inventory under any method. It can be disclosed separately as an action, not as a lower Scope 3 figure.
- What an inset credit does
- When a supplier in the buyer’s own chain reduces emissions, the buyer’s Scope 3 goes down through lower supplier emissions data. The inset credit is the proof of that emissions reduction and who funded it, and it is not counted a second time. An emissions reduction outside the buyer’s own chain is reported separately, not as a lower Scope 3 figure. The GHG Protocol’s Actions and Market Instruments workstream is developing a market-based approach for Scope 3. A consolidated draft is expected for public consultation in the second quarter of 2027, and the revised standard in the fourth quarter of 2028. Each Carbon3 credit records the supplier, project, baseline and verification report, so it can be reported under the current rules and reassessed under the new ones.
Science Based Targets initiative (SBTi)
- What the standard is
- The SBTi validates whether a company’s emissions reduction targets are consistent with climate science. Its Corporate Net-Zero Standard V2.0 was published on 11 June 2026. Validations under it open on 1 February 2027, and it becomes mandatory for new target submissions from 1 February 2028. Targets already validated under the earlier version stay valid for their cycle. Target ambition is always set on the company’s physical inventory.
- A reduction in the company’s own supply chain
- Reductions that show up in the company’s inventory support emissions reduction claims. A project implemented by or on behalf of the company in its own value chain, with measured outcomes reported in proportion to its contribution, can support target implementation and an “alignment” claim.
- A reduction in the industry, outside the company’s own supply chain
- Action in a shared system the company draws on, such as a supply shed or logistics network, or at sector level, counts only where direct action in its own chain is constrained. It supports a separate “system contribution” claim, reported apart from the inventory.
- What an inset credit does
- Projects must be measured, additional and verifiable. Their outcomes must be uniquely attributed, with serialized tracking to prevent double counting. Credits a company sells on cannot also count for that company. The SBTi plans interim guidance on reporting projects and market instruments for consultation in the fourth quarter of 2026, so how a received inset credit is assessed is not yet fully settled.
EU rules on green claims
- What the standard is
- From 27 September 2026, EU consumer law (Directive 2024/825) bans claims that a product has a neutral, reduced or positive climate impact when the claim rests on compensating emissions with credits. Claims about measured reductions in the product’s own life cycle remain possible if they are substantiated.
- A reduction in the company’s own supply chain
- A product claim can rest on measured, substantiated reductions in that product’s own life cycle, which includes reductions at its suppliers.
- A reduction in the industry, outside the company’s own supply chain
- A reduction outside the product’s life cycle cannot support a claim that the product has a neutral, reduced or positive climate impact.
- What an inset credit does
- Inset credits support Scope 3 reporting and progress towards targets, not product neutrality claims. A product claim has to rest on measured reductions in that product’s life cycle. Credits never replace a company’s own emissions reductions.
Counting each tonne once
- What the standard is
- Double counting happens when two companies claim the same tonne, when one tonne is sold twice, or when a reduction is credited by two programs. Standards such as the SBTi’s now require serialized tracking to prevent it.
- A reduction in the company’s own supply chain
- Several companies in one chain can fund the same project. Each receives its own credits, each batch under its own record ID, so no tonne has two holders.
- A reduction in the industry, outside the company’s own supply chain
- The same rule applies wherever the tonne sits: one record, one holder, and no credit for a reduction already credited by another program.
- What an inset credit does
- Each batch of credits has its own record ID and exactly one holder on the Carbon3 registry. A transfer moves it rather than copying it, and retirement closes it permanently. A reduction already credited elsewhere is excluded at validation.
General information as of October 2026, not legal, accounting or reporting advice. Standards and regulations change; check the current text.
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