Carbon Credit
Case Studies

Nitrous oxide (N₂O) is one by-product of the industrial manufacture of adipic and nitric acids, among others. It is a potent climate forcer: an ozone-depleting substance with a GWP of 273. Adipic acid is a precursor in the production of nylon, polyurethanes, and polyester. Nitric acid is widely used as a raw material for synthetic fertilizer, as input for adipic acid, and for explosives.

Proven nitrous oxide abatement technology is readily available, can be installed in existing plants, and can reach very high abatement efficiencies of up to 99 percent.²⁴ To address nitrous oxide emissions, facilities install catalytic or thermal decomposition units.²⁵ Capital costs range from $1.2 million to more than $25 million depending on the type, size of the facility, and treatment option. Monitoring equipment and downtime for installation and testing can add costs.²⁶ New technologies show promise to reduce these costs further.²⁷

This crediting pathway has matured significantly since the 2000s, when the CDM methodology created perverse incentives that distorted global adipic acid markets and led to carbon leakage and criticism.²⁸ In particular, Climate Action Reserve’s (CAR) new China adipic acid protocol uses a 90 percent baseline and production caps to explicitly correct for these weaknesses. In compliance markets, the European Union’s ETS has driven near-universal EU adoption of mitigation measures.

Why it meets our criteria

Scalability: The potential adipic acid abatement in developing countries alone totals roughly 2.6 Gt CO₂e cumulative 2013 through 2030.²⁹ Of roughly 500 to 580 nitric acid plants around the world, fewer than one in five run abatement technology. This leaves roughly 350,000 metric tons of nitrous oxide (roughly 95 million metric tons of CO₂e) vented annually.³⁰ The key constraint to scaling with carbon finance is high up-front costs and engineering complexity, coupled with uncertainty around the market demand for credits and the possibility of changing regulations.

Opportunity size: Legacy CDM issuance was enormous: more than 160 million CERs from just four adipic acid projects by 2012. Most of that volume is now retired or expired.³¹ New-generation VCM volume is early and small, gated by which plants remain unabated and eligible.

Value: Abatement costs sit near the bottom of any marginal abatement curve (<$0.50 to $5 per ton CO₂e). Today, adipic acid credits sell for around $4.75 per ton, and nitric acid credits sell for around $5.95 per ton.³²

Quality: Mitigation of these emissions is directly measurable, and there is no reversal risk as the gases are destroyed. Overcrediting due to leakage and baseline manipulation has been a concern for this credit type in the past, and although methodologies have been significantly strengthened in response, buyers should be cautious of any credits issued following significant increases in the plant’s chemical production, particularly at adipic acid plants. CAR’s U.S. and China adipic acid methodologies were recently CCP-approved, signaling a step change in quality.³³ Although nitric acid methodologies have not yet been fully reviewed for CCP approval, several U.S. N₂O projects have received high ratings. A new nitric acid CAR protocol is also in development.³⁴ Regulatory additionality risk is typically well-constrained by methodologies, which explicitly rule out crediting for any abatement that becomes required by law. Corporate credit purchases can encourage above-standard abatement even after a regulation is established. For example, China has signaled the intent to set a floor for industrial N₂O abatement and then progressively strengthen these requirements.³⁵ Strong ongoing MRV is critical to ensure installations are maintained and continue to mitigate emissions, and to protect against perverse incentives such as rewarding facilities for delaying adoption of emission controls that more responsible peers had already voluntarily installed.

Policy pathway: Carbon markets, alongside “buy clean” efforts for commodity materials, can play a critical role in delivering capital to support near-term abatement. This activity paves the way for strengthened national policies, and delivers additional abatement above regulatory thresholds once those national policies are in place. Already, there is policy action. Unlike ODS, N₂O is included in the Paris Agreement, so companies can access compliance markets directly: the Article 6.4 Supervisory Body approved AMM-002 for nitric acid in May 2026.³⁶ An intergovernmental body, the Nitric Acid Climate Action Group (NACAG), finances plant retrofits to mitigate N₂O and requires host countries to commit to permanent abatement and NDC inclusion, explicitly barring the resale of resulting reductions into carbon markets.³⁷ As more countries sign NACAG’s Statement of Undertaking, the pool of plants still eligible and additional for carbon finance will shrink. The EU regulates industrial N₂O emissions in Europe via the ETS, and in the future will regulate imports via the EU’s Carbon Border Adjustment Mechanism (CBAM).

Support most needed from buyers today

Companies can contribute to demand for CCP-approved adipic acid credits to validate the new methodologies commercially. On nitric acid credits, however, the ICVCM and registries are still resolving additionality and baseline concerns.

Next: ODS and HFC Destruction

Destruction is the last step in the Lifecycle Refrigerant Management (LRM) chain, alongside other credit-generating steps such as equipment replacement (swapping out old, high-GWP systems), leak detection and repair, and reclamation (purification and reuse to displace virgin gas production). Across all these systems, gas recovery is needed: pulling used gas from chillers, AC units, refrigerators, foams, and cylinders. Sending equipment and materials to either be destroyed or reclaimed helps to build the circular refrigerant economy of the future. Carbon credits can play a critical role today in building this capacity.

ODS destruction is the established pathway of this category: credited under registries since the 2010s, highly rated, and CCP-labeled. HFC destruction is the newer “second act,” targeting high-GWP HFC refrigerants being phased down under the Kigali Amendment. It addresses earlier pitfalls by targeting dispersed end-of-life gas rather than a production-linked by-product while introducing much stronger safeguards.

Why it meets our criteria

Scalability: ODS destruction is mature and repeatable, with established chain-of-custody and waste destruction facility standards. Production of most ODS is now banned, but legacy banks in equipment and stockpiles keep leaking—the unrecovered legacy bank is estimated to be approximately 9 billion tons CO₂e through 2100.³⁸ HFC destruction is at an earlier stage but uses the same infrastructure and MRV systems as ODS. HFC volumes will grow sharply with rising cooling demand: Carbon Containment Lab modeling projects more than 30 billion tons CO₂e of refrigerant could be vented by 2050 if left unmanaged.³⁹ The constraints to scaling include a lack of certified destruction facilities. They are currently available in only 16 countries that accept cross-border waste imports, creating significant bottlenecks in collection and transport and adding cost and administrative complexity.⁴⁰ Meanwhile, limited access to capital and lengthy permitting processes constrain the expansion of destruction capacity. Recovery of gases is constrained by technician shortages and inadequate field equipment, even where cash incentives exist.⁴¹

Opportunity size: Roughly 7 million ODS credits have been issued to date, with about 1.9 million still unretired.⁴² HFC issuance is small (about 10,000 credits to date) but expected to scale substantially over the next five to ten years, with credits concentrated in countries with large cooling stock and weak end-of-life capture. Google’s multiyear 250,000-credit commitment to Recoolit signals early buyer demand.⁴³

Value: ODS credits have historically traded from about $5 to $17 a ton.⁴⁴ By contrast, HFC credits sold through wholesale and multiyear deals currently cost $30⁴⁵ to $75⁴⁶ per ton, reflecting the logistically complex and labor-intensive process of collecting end-of-life equipment, recovering refrigerants, and moving them to certified destruction facilities.

Quality: ODS projects are generally rated highly by raters such as BeZero, Calyx Global, and Sylvera. ODS destruction is CCP-labeled via CAR and ACR methodologies.⁴⁷ HFC destruction is not yet CCP-labeled or CORSIA-eligible and remains “in assessment.”⁴⁸ Three new methodologies (Isometric, Open Carbon Protocol, and Verra VM0016 v2.0) have recently been adopted. Stakeholder concerns on quality in this category include creating perverse incentives that result in increased production of virgin gas, and whether MRV guards against this; additionality complexity from staggered, regional Kigali phase-down schedules; and scrutiny of counterfactual and stockpile-sourcing claims.

Policy pathway: Both pathways sit beside the Kigali Amendment (173 of 198 parties ratified)⁴⁹ to capture legacy refrigerant that regulation doesn’t yet reach. ODS gases are not Paris Agreement gases, so they are ineligible for Article 6 without reform. Carbon finance instead closes the funding gap for its proper capture, transport, and destruction, potentially maturing into municipal, take-back/extended producer responsibility (EPR) or commercial refrigerant-management systems.

Support most needed from buyers today

Multiyear offtake agreements that de-risk investments in MRV, chain of custody, and destruction facilities, plus tolerance for MRV still being field-tested.

Next: Rice Methane Mitigation

Rice is produced at a large scale: it is a major cereal crop for almost half of the global population,⁵⁰ cultivated across more than 165 million hectares of land with upwards of 144 million farms concentrated in Monsoon Asia.⁵¹ Rice cultivation is the source of 8 to 11 percent of global methane emissions.⁵²

Rice is traditionally grown in continually flooded paddies. Flooding helps suppress weeds but creates anoxic (oxygen-free) soil conditions that generate significant amounts of methane as organic matter decomposes.⁵³ Mitigation activities primarily focus on reducing the duration of flooding through practices such as alternate wetting and drying (AWD) and direct seeding into dry soil. Projects can also include other climate- and soil-friendly practices such as biochar amendments and fertilizer adjustments (affecting nitrous oxide emissions) as well as composting rice straw instead of reapplying it directly to the paddy (further reducing methane) or burning it (avoiding black carbon).

Early Clean Development Mechanism (CDM) methodologies tried to address this source but were found to be flawed; in 2024, Verra invalidated 4.5 million credits using these protocols.⁵⁴ Since then, the methodology landscape has been substantially rebuilt on stronger foundations, and rice methane is now reemerging in the VCM as a rapidly expanding category.

Why it meets our criteria

Scalability: The opportunity is massive. Sustainable rice practices carry mitigation potential of up to 48 percent of baseline emissions.⁵⁵ AWD alone can reduce methane by 30 to 70 percent and water use by 30 percent without reducing yields;⁵⁶ direct seeding has shown reductions of up to 90 percent in controlled studies;⁵⁷ biochar amendments have decreased methane by roughly 40 percent in early studies;⁵⁸ and combined AWD plus direct seeding has also demonstrated reductions up to 90 percent.⁵⁹ These practices do not require a major infrastructure overhaul, supporting rapid replication once methodology and MRV barriers are addressed. Constraints to scaling include the logistical difficulty of verifying practice adoption across thousands of smallholder plots, and the open question of whether satellite-enabled MRV systems can close that gap at cost.

Nearly all the 1.2 million unretired credits currently in this pathway are on legacy CDM methodologies, warranting caution.⁶⁰ However, the future is bright: several registries have developed or are in the process of developing new and improved methodologies, while project developers are active across Ghana, India, Indonesia, Latin America, the United States, and Vietnam. Gold Standard, whose rice methane methodology recently received CCP approval,⁶¹ forecasts approximately 3.2 million credits in this pathway over the next five years.⁶²

Value: Newer credits are currently $15 to $25 per metric ton of CO₂e.⁶³ Most irrigation management practices require minimal infrastructure changes, keeping both project and credit costs at a low starting point. Measurement and monitoring costs vary, however, and further research is needed to improve the reliability, availability, and cost of models and satellite-based tools to reduce reliance on analog approaches such as logbooks and farmer attestations. Forward offtake deals remain rare but are gaining momentum, reflecting growing interest from corporate buyers. For example, Amazon signed a forward purchase agreement for nearly 700,000 credits from The Good Rice Alliance in April 2026.⁶⁴

Quality: The new generation of methodologies represents a meaningful shift toward higher-quality credits, though they remain in the early stages and have not yet been tested at scale across multiple crediting cycles. Rice methane projects also enhance quality and durability by offering multiple benefits: a new revenue stream for farmers, reduced pressure on scarce water resources, and minimal reversibility risk, which together have contributed to strong early farmer adoption.⁶⁵ Stakeholder concerns include whether current methodologies adequately account for nitrous oxide rebound from field drainage and whether AWD adoption already occurring without carbon finance could compromise additionality going forward.

Policy pathway: Proposed policies on rice methane appear promising, with groundwork laid by semi-governmental research bodies such as the International Rice Research Institute in partnership with national research institutions.⁶⁶ Government adoption is under way in several markets, including Vietnam’s Ministry of Agriculture, which has been working on AWD since 2011,⁶⁷ and the Philippines, which has pursued AWD across all national irrigation systems to adapt to increased water scarcity.⁶⁸ This policy’s water savings double as a climate adaptation measure in regions facing more unpredictable irrigation supply, giving governments an additional rationale for adoption independent of carbon benefit. Carbon finance supports the transition by funding incentives to farmers to change practices, improving MRV science and best practices, and helping demonstrate to farmers and governments that these changes do not reduce yield.

Support most needed from buyers today

Forward offtake commitments enable the development and deployment of rigorous MRV. Buyers can extend impact by prioritizing projects that avoid additional superpollutants, such as those reducing fertilizer use and biomass burning.

Next: Anaerobic Digesters

Anaerobic digesters capture methane produced when organic waste, including municipal wastewater sludge, livestock manure, and other agricultural residues, decomposes in oxygen-free environments.⁶⁹ The captured biogas can generate electricity or heat, be used as cooking fuel, upgraded to renewable natural gas (RNG) for pipeline injection or vehicle fuel, or flared (and therefore converted to CO₂, which has a lower GWP). While crediting for digesters is primarily based on avoided or mitigated methane emissions, digesters can also reduce nitrous oxide and black carbon emissions with significant co-benefits.

Why it meets our criteria

Scalability: Digesters can address methane emissions from several large and dispersed waste streams. Manure management alone accounts for 1.3 percent of U.S. annual emissions.⁷⁰ The VCM pathway is mature, with multiple methodologies across Gold Standard, Verra, and CAR and more than 27 million unretired credits currently on the market across hundreds of projects.⁷¹ The underlying technology is also mature and highly replicable, with digesters operating worldwide across household, agricultural, wastewater, and industrial applications with well-established connections to carbon finance. Industrial-scale digesters are particularly replicable and bankable because they can generate multiple revenue streams from the same waste sources, including energy, RNG, and digestate fertilizer.⁷²

Value: Wastewater digester projects are among the lowest-priced superpollutant credit categories, reported at an average of $3.21 per ton CO₂e in 2026.⁷³ Agricultural and manure digester credits are priced slightly higher at an average of $9.63 per ton CO₂e.⁷⁴ Digesters do have high up-front costs and incur costs from ongoing maintenance. A recent World Resources Institute (WRI) report found manure digesters can cost around $500 a cow annually on U.S. dairy farms.⁷⁵ However, in addition to carbon finance, industrial-scale projects can partially offset these costs through revenues generated from the sale of energy, RNG, and digestate fertilizer.

Quality: Quality of projects varies substantially by project scale and waste stream. Household-scale digesters are highly additional and produce clean cooking fuel and organic fertilizer.⁷⁶ Industrial-scale digesters address concentrated methane sources and often generate highly measurable emissions reductions while also reducing local environmental nuisances such as odor, and can produce energy and fertilizer. Additionality may be a weak point for large-scale industrial projects, particularly where co-product revenue and existing policy incentives (e.g., California’s Low Carbon Fuel Standard - LCFS) can substitute for carbon finance as the primary factor in project viability. Measurement and verification rigor should be reviewed closely across all projects, but especially at the household scale where monitoring infrastructure is limited and costly to do well.

Policy pathway: Further policy support for industrial-scale digesters is plausible but may be more likely driven by energy generation,⁷⁷ waste management,⁷⁸ fertilizer production,⁷⁹ and local air quality improvements. Household-scale digesters may attract further support through clean development funds and national incentive programs.⁸⁰ Carbon projects can support these policies by reducing costs, raising awareness and improving technology and measurement.

Support most needed from buyers today

Buyers can purchase digester credits on the spot market. To ensure the best investment, they should prioritize credits with clear social or environmental benefits and strong evidence of additionality and robust MRV. Buyers should deprioritize credits generated under methodologies that ICVCM has rejected, including CDM methodologies AMS-I.E. and AMS-I.I (as of August 2026).⁸¹ Digesters may also offer a strong insetting opportunity for companies with significant Scope 3 emissions from livestock or agricultural waste residues in their supply chains; or where they can potentially purchase energy and/or fertilizers as commodities.

Next: Landfill Gas Capture, Destruction, and Utilization

Landfills are the third-largest source of anthropogenic methane globally, generating roughly 799 million tons of CO₂e per year.⁸² Methane forms as organic waste decomposes anaerobically within landfills. Credit projects install gas collection then either flare methane or route it for electricity generation, direct thermal use, or upgrading to renewable natural gas (RNG).⁸³

Landfill gas (LFG) capture, destruction, and utilization is one of the CDM’s original mainstay categories, with credits issued since the early 2000s. It was also one of the ICVCM’s first two categories with CCP-approved methodologies, covering roughly 15 million credits.⁸⁴ The category now has a mature methodology landscape across ACR, CAR, Gold Standard, and Verra, with others in development. Gas collection is now widely mandated at larger sites in developed countries through policies such as the EU Landfill Directive and U.S. Clean Air Act New Source Performance Standard rules.⁸⁵ Where these regulations do not apply, however, landfill gas capture projects offer significant potential for superpollutant mitigation. New approaches to landfill gas management, including biocovers and enhanced well control, may also provide opportunities to mitigate additional methane emissions at sites where conventional collection projects are otherwise nonadditional or uneconomic.

Why it meets our criteria

Scalability: Landfills account for roughly 8 percent of global methane emissions.⁸⁶ Sixty to 90 percent of emissions at average landfills could be mitigated through gas collection technology—such as wells, header pipes, and flares or utilization equipment—that is readily commercially available and retrofittable.⁸⁷ Legacy CDM and VCS issuance is large and mature, spanning thousands of projects over two decades. The ICVCM’s initial CCP-approved portion alone totals approximately 15 million credits.⁸⁸ More than 40 million credits are currently available in the market out of nearly 80 million issued.

Value: Credits are priced near the low end of the carbon market, averaging about $4.60 per ton CO₂e in 2026 for CCP-labeled supply.⁸⁹ Projects that generate a second revenue stream by selling captured gas for electricity, direct use, or RNG can substantially offset up-front project costs and improve project economics, though they need to be careful to avoid double counting of the environmental attributes sold.

Quality: Landfill projects perform well on several quality indicators: methane destruction is immediate, highly permanent, and readily verifiable, and projects can generate multiple benefits for the environment and local communities. The main risk has become additionality, as both market and policy incentives make landfill gas capture with beneficial use more financially attractive without carbon credits.⁹⁰ Larger landfill gas-to-electricity projects (more than 10 Megawatt electrical (MWe)) remain excluded from CCP-approval pending further review.⁹¹

Novel approaches to mitigate landfill gas such as biocovers and enhanced gas extraction may avoid these additionality risks but will need to develop robust MRV and counterfactuals for high-integrity crediting.

Policy pathway: Landfill gas management is already regulated in many jurisdictions. The remaining opportunity is therefore concentrated in jurisdictions and sites where capture is not yet required. At the same time, the sector is being tested for a new policy pathway: Article 6.4 compliance markets. Landfill gas was the first project type approved under the Paris Agreement Crediting Mechanism, with a crediting baseline that declines faster for flare-only projects than for methane-to-energy projects, creating an explicit incentive to shift toward utilization.⁹²

Support most needed from buyers today

Spot purchasers should prioritize CCP-approved credits from projects in developing countries and in smaller and/or unregulated landfills. Buyers should also favor beneficial-use projects (energy/RNG) over pure flaring. Continued scrutiny of legacy credits from large, already-regulated landfills can help distinguish genuinely additional projects and reward well-managed operations.

Forward purchasing and investments in newly developed landfills in developing countries can unlock complementary financing from multilateral development banks and governments while delivering major public health benefits from otherwise unmanaged waste. Waste-sector interventions further upstream, including organic waste diversion, composting, and anaerobic digestion, should complement landfill gas capture. Further, forward-looking buyers should be on the lookout for opportunities to invest in or support novel landfill gas credit types that show potential against these criteria.

Next: Plugging Orphaned Oil and Gas Wells

Unplugged and unproductive oil and gas wells without a solvent operator are considered “orphaned.” As these wells sit, methane can leak from the degrading well casing and surface infrastructure.⁹³ In the United States, individual states are responsible for the eventual plugging of these wells.⁹⁴ However, the sheer number of these wells, limited numbers of plugging teams, and lack of public resources have left thousands of wells unplugged for years. Carbon credit projects measure methane emissions: before plugging, plug and cement the wellbore, and properly “abandon,” (that is, reclaim the site). Avoided emissions are estimated by projecting the leak rate forward, typically 20 years, based on the assumption that the well would otherwise have remained unplugged.⁹⁵

Orphaned well plugging is a new and potentially scalable pathway, but crediting approaches and MRV require further development. ACR published the world’s first dedicated methodology in 2023, though it was subsequently taken offline due to integrity concerns with measurement. Other registries such as Open Carbon Protocol, Climate Action Reserve, BCarbon, and CarbonPath have since stepped in, each with different measurement protocols and projections.

Why it meets our criteria

Scalability: This mitigation measure has so far been concentrated in North America where the U.S. has an estimated 3.6 million abandoned wells, including orphaned and non-orphaned, emitting 7 million to more than 20 million metric tons CO₂e a year.⁹⁶ The Carbon Containment Lab estimates about 100 million MTCO₂e could be abated over 20 years by plugging currently documented orphaned wells.⁹⁷ Eight million credits have been issued under this pathway to date, with over 3 million of the unretired credits issued under ACR’s now inactive methodology.⁹⁸ While well plugging and abandonment (P&A) technology is mature, a few constraints currently dampen project activity: engineering and resource requirements vary from well to well and are hard to predict. The complexity of surface, mineral, and pore rights poses another challenge. Split ownership across private, state, federal, and tribal entities can create uncertainty around which entity gets credit for emissions reductions.

Value: At about $20 a ton, prices are comparable to nature-based carbon removal credits.⁹⁹ One estimate puts the total 15-year market for documented orphaned wells at $1 billion at $20 a ton, rising to more than $17 billion for all high-priority abandoned wells at $100 a ton.¹⁰⁰ The cost of well plugging and pre- and post-plugging measurements can be high, ranging from thousands to hundreds of thousands of dollars a well.¹⁰¹ Well plugging and site remediation projects occasionally reach millions of dollars for a single well.

Quality: Plugging an orphaned well immediately stops methane emissions and benefits landowners and nearby communities by also stopping the co-emission of other toxic pollutants and returning well sites to other uses. Other environmental benefits include protecting the groundwater strata exposed to leaks in the well casing.

This pathway must overcome several quality risks, however. The first is overcrediting caused by unproven counterfactuals and emission baselines. Many methodologies require only a single pre-plugging measurement to support 20 to 50 years of crediting, but this approach captures only a snapshot of emissions because orphaned-well methane emissions can be unpredictable over time.¹⁰² Currently, a lack of consensus exists on which measurement or decline-curve approach most accurately reflects real-world leak behavior over a crediting period.¹⁰³ Further, permanence depends on the well plug remaining intact and the surrounding area being free from more drilling. Additionality is another concern: in certain cases, states may end up prioritizing plugging the same high-emitting wells that offer the best return on investment for carbon projects. Crediting terms should be limited by realistic timelines of state plugging programs. No methodology has yet applied for CCP assessment, so the category currently has no ICVCM validation.¹⁰⁴

Policy pathway: Lenient regulatory landscapes in most states allow many well operators to postpone or avoid their plugging obligations. As a result, a growing number of wells exist in a marginal or idle condition before becoming orphaned. The Carbon Containment Lab anticipates that U.S. policy reforms currently under way could temporarily lead to an increase in orphaned wells as undercapitalized operators shed plugging liabilities.¹⁰⁵ Credit projects can contribute to the enactment and reform of these policies and absorb some of the orphaned backlog by creating an additional funding source for remediation, raising awareness about the environmental impact of orphaned wells, and generating practical experience with measurement, plugging, and leakage monitoring. Lessons from carbon-financed projects could also help governments develop better prioritization, measurement, and remediation practices for orphaned wells more broadly.

Support most needed from buyers today

This nascent pathway will require more buyer demand to grow into its next phase. Buyers can make a difference by not only supplying capital but also ensuring methodologies and projects meet high bars for additionality, measurement, and benefits being delivered to local communities. These goals can be achieved by supporting projects that complement state-funded plugging of prioritized wells and ensuring multistage state-of-the-art measurements are taken and credited appropriately.

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