Why this choice matters
Buyers building a carbon credit portfolio in 2026 face a fragmented market with credit prices ranging from £4 per tCO2e (low-integrity REDD+ avoidance) to £600+ per tCO2e (direct air capture removal). The difference is not arbitrary — it reflects fundamental differences in permanence, additionality, verifiability and scale. Choosing the wrong type for your disclosure purpose creates real audit risk.
The three pathways
1. Forest carbon (ARR, REDD+, IFM)
Nature-based credits from afforestation, reforestation, avoided deforestation or improved forest management. Typical price range: £10-30 per tCO2e in 2026. Permanence: 30-100 years with buffer pool insurance. Strengths: large scale, strong co-benefits for biodiversity and local communities, supports natural climate solutions. Weaknesses: vulnerable to fire, drought, and reversal; baseline-counterfactual debates have undermined REDD+ in particular; satellite-verifiable for ongoing integrity but not for original additionality claims.
2. Biochar
Engineered carbon removal where agricultural or forestry waste is pyrolysed into stable solid carbon. Typical price range: £100-200 per tCO2e in 2026. Permanence: 100-1000+ years depending on storage conditions. Strengths: engineered verifiability, centuries-scale permanence, currently the most scalable durable removal pathway. Weaknesses: feedstock supply constraints limit absolute scale, less story value for ESG marketing than forest projects.
3. Direct air capture (DAC)
Machines that extract CO2 directly from ambient air and store it underground in geological formations. Typical price range: £400-800+ per tCO2e in 2026. Permanence: 1000+ years with proper geological storage. Strengths: highest verifiability of any pathway (every tonne is metered), permanent storage, no land-use change. Weaknesses: high cost, energy-intensive, very limited current capacity.
Which to choose for which disclosure purpose
- Carbon neutrality claim or net zero target (high stakes, will be scrutinised) — bias toward removal credits (biochar or DAC) at higher quality tier, accept higher price per tonne
- Scope 1/2/3 emissions transition support (claims that you are reducing not offsetting) — forest carbon is acceptable but methodology integrity matters; avoid pre-2023 REDD+ vintages
- Voluntary contribution to climate finance without specific net zero claim — broader options including high-integrity forest carbon; emphasise project co-benefits
- CSRD ESRS E1-7 disclosure (regulatory) — methodology rigour matters more than category; durable removals score higher on auditor confidence
Portfolio approach
Most institutional buyers in 2026 deploy a blended portfolio: 60-70% high-integrity forest carbon for cost efficiency and impact volume, 20-30% biochar for durable removal at moderate cost, 5-15% DAC for the long permanence anchor. This blended approach matches typical corporate net-zero pathway recommendations from SBTi and meets the durability criteria emerging from regulators.