Leading Carbon Credit Registries Expand into Insetting

Carbon registries introduce new standards for supply chain emissions

Two major carbon credit registries have announced frameworks designed to help companies address emissions embedded in their supply chains. Isometric and Verra are both developing standards for environmental attribute credits, commonly called insets, which work differently from traditional carbon offsets.

These credits represent emissions reductions or avoidance achieved within a company’s own value chain. For example, a manufacturer might generate credits by switching to low-carbon steel or cement, or by helping suppliers electrify their machinery. The approach contrasts sharply with conventional offsetting, where companies purchase credits from unrelated projects such as forestry schemes or renewable energy installations.

The shift reflects growing pressure on businesses to tackle Scope 3 emissions. These indirect emissions from supply chains typically account for the largest share of a company’s carbon footprint. However, they have proven difficult to measure and even harder to reduce through direct action.

Isometric plans to launch a book-and-claim platform next month. The system will allow companies to issue, track, and retire environmental attribute credits for low-carbon materials and fuels. Meanwhile, Verra has been piloting Scope 3 Units with Patagonia and Bayer, testing applications ranging from supplier fuel switches to regenerative agriculture.

Isometric launches integrated credit management platform

Isometric announced its environmental attribute credit module will function as what CEO Eamon Jubbawy described as a “one-stop shop” for managing different credit types. The platform is set to go live next month, though the first credits are not expected until late 2026.

Initial credits will likely focus on cement, a material responsible for roughly 8% of global carbon emissions. The registry plans to expand into other high-emission materials such as steel, as well as sustainable aviation fuel and other low-carbon energy sources.

The module will sit alongside Isometric’s existing carbon removal credit offerings. This allows companies to build portfolios combining removal credits with supply chain reduction credits. Consequently, businesses can address both their direct emissions and those embedded in purchased goods and services.

Isometric has built a reputation for processing credits more quickly than some established registries. This operational efficiency may prove valuable as demand for supply chain credits grows. The company’s entry into environmental attribute credits signals confidence that insetting will become a significant market segment.

Verra delays Scope 3 Units launch to mid-2026

Verra originally planned to launch its Scope 3 Units in December 2025. However, the registry pushed the timeline back to Q1 2026 and subsequently to Q3 2026. The delays stem from technical complexity and the need for broader stakeholder consultation.

The registry has been piloting the framework with two well-known companies. Patagonia’s involvement covers supplier transitions from coal and gasoline to natural gas, along with the use of concrete that incorporates captured CO2. Bayer’s pilot focuses on regenerative agriculture practices within its supply chain.

These pilot projects test whether the credits can be verified rigorously while remaining commercially viable. Supply chain interventions often involve multiple parties and complex accounting. For instance, determining who can claim a reduction when a supplier switches fuel sources requires clear ownership rules.

Verra already operates the Verified Carbon Standard, which dominates the voluntary offset market. Adding Scope 3 Units would significantly expand the registry’s scope beyond traditional offset projects. Nevertheless, the registry appears committed to ensuring the new standard meets verification requirements before full release.

Registry infrastructure receives major investment

Intercontinental Exchange is developing ICE GreenTrace, a registry service platform scheduled for late 2025. The system will track the complete lifecycle of carbon credits, from issuance through retirement. ICE has partnered with Winrock International’s Environmental Resources Trust to support three existing credit programs.

The American Carbon Registry and Architecture for REDD+ Transactions will migrate to the new platform in spring 2026. These registries currently handle significant volumes of voluntary market credits. Additionally, the Energy Transition Accelerator program will use the ICE infrastructure.

Improved registry technology addresses persistent concerns about double-counting and transparency in voluntary carbon markets. Robust tracking systems make it easier to verify that credits represent genuine, additional emissions reductions. Furthermore, they can prevent the same reduction from being claimed by multiple parties.

The Bloom Registry launched in April 2025 with a different focus. It issues certificates for circular economy activities, specifically e-waste recycling. While not directly related to insetting, Bloom demonstrates continued innovation in environmental attribute certification beyond traditional carbon credits.

Supply chain credits target Scope 3 measurement challenges

Scope 3 emissions present the most difficult measurement and reduction challenge for most businesses. These emissions occur outside a company’s direct operations, scattered across complex global supply chains. A retailer’s Scope 3 footprint might include manufacturing emissions from hundreds of suppliers, transportation, and even customer use of products.

Traditional carbon accounting requires companies to estimate these emissions using industry averages or supplier data. This approach lacks precision and offers limited incentive for actual reductions. Environmental attribute credits create a different dynamic by linking specific interventions to measurable outcomes.

For example, a construction company purchasing low-carbon cement can receive credits representing the emissions avoided compared to conventional cement. This provides financial justification for paying premium prices. The supplier benefits from increased demand for lower-carbon products, potentially funding further improvements.

Similarly, credits for sustainable aviation fuel help airlines justify investments in more expensive alternatives to conventional jet fuel. An existing scheme for sustainable aviation fuel has already aggregated approximately £200 million in spending. This demonstrates substantial corporate willingness to pay for verifiable supply chain improvements.

The approach works best when credits reflect genuine additionality. In other words, the reduction must represent something beyond what would have happened anyway. This remains a contentious issue in carbon markets. Nevertheless, linking credits to specific product switches may make additionality easier to demonstrate than with some traditional offset projects.

Standards bodies consider pooled value chain reductions

The Science Based Targets initiative is exploring how companies might use pooled value-chain reductions toward their Scope 3 commitments. Currently, SBTi requires companies to set absolute reduction targets rather than relying on offsets or credits. However, the organization recognizes that some Scope 3 emissions prove extremely difficult to reduce directly.

Pooled reductions would allow multiple companies to collectively fund supply chain improvements. Each participant could claim a portion of the resulting emissions savings. This could prove particularly valuable in industries where individual companies lack leverage to drive supplier changes alone.

Such an approach would need careful accounting to prevent double-counting. If a supplier reduces emissions with support from multiple customers, the same reduction cannot be claimed by the supplier and all customers. Clear allocation rules become essential.

Verra’s development of product-level accounting standards may help address this challenge. By attributing emissions reductions to specific units of production, registries can track which products carry lower embedded emissions. Buyers of those products could then claim the associated reductions with less risk of overlap.

Financial scale and market development trends

The voluntary carbon market has grown substantially over the past five years, though it remains a fraction of compliance markets. Registries like Verra process millions of tonnes of offset credits annually. However, insetting credits currently represent a much smaller segment.

Tradewater, for instance, retired over 95,000 tonnes of insetting credits in 2025. This figure demonstrates growing activity but remains modest compared to total voluntary market volumes. Nevertheless, the trajectory suggests rapid expansion as standards mature and more companies seek credible Scope 3 solutions.

The £200 million aggregated through sustainable aviation fuel schemes indicates corporate appetite for supply chain investments tied to verifiable credits. If similar mechanisms expand into steel, cement, chemicals, and other high-emission materials, the market could grow substantially. Some analysts suggest insetting could eventually rival or exceed traditional offsetting in certain sectors.

Infrastructure improvements support this growth. ICE’s investment in registry technology signals confidence in long-term market development. Better platforms reduce transaction costs and increase transparency, both essential for attracting corporate treasury and sustainability teams.

However, questions about credit integrity persist. Past controversies over offset quality have made companies cautious. Insetting may offer advantages because reductions occur within existing commercial relationships. Companies have more visibility into supplier operations than into distant offset projects. This proximity could improve verification and reduce reputational risk.

Essential information for UK businesses

• Isometric will launch an environmental attribute credit platform next month, with first credits expected in late 2026 focusing initially on low-carbon cement and steel.
• Verra has delayed its Scope 3 Units launch to Q3 2026 following pilot projects with Patagonia and Bayer covering supplier fuel switches and regenerative agriculture.
• ICE GreenTrace registry infrastructure will go live in late 2025, with American Carbon Registry and Architecture for REDD+ Transactions migrating in spring 2026.
• Environmental attribute credits allow companies to claim emissions reductions from supply chain interventions such as low-carbon materials or electrified supplier operations.
• Existing sustainable aviation fuel credit schemes have aggregated approximately £200 million in corporate investment, demonstrating significant demand for verifiable supply chain improvements.
• The Science Based Targets initiative is considering how pooled value-chain reductions might count toward corporate Scope 3 commitments without creating double-counting issues.

Implications for manufacturers and supply chain managers

UK manufacturers face increasing pressure to demonstrate Scope 3 reductions, particularly those supplying large corporations or public sector contracts. Many procurement frameworks now require evidence of supply chain decarbonization. Environmental attribute credits could provide a standardized way to document and communicate these efforts.

Smaller suppliers may find credits especially valuable. A component manufacturer that electrifies equipment or switches to renewable energy could generate credits worth selling to downstream customers. This creates a revenue stream that helps justify capital investment in cleaner operations. Consequently, credits might accelerate decarbonization in parts of the supply chain where margins are tight.

Construction and infrastructure firms should watch developments in cement and steel credits closely. These materials dominate embodied carbon in building projects. Specifying low-carbon alternatives currently costs more, but associated credits could offset some of the premium. Major contractors are already exploring how to incorporate this into project accounting.

For companies setting science-based targets, insetting offers a different tool than traditional offsets. While most frameworks discourage offsetting as a substitute for direct reductions, supply chain investments may receive more favorable treatment. These interventions drive actual changes in how products are made rather than simply compensating for emissions elsewhere.

Nevertheless, businesses should expect scrutiny over how they account for and communicate these credits. Regulators and stakeholders will likely demand clear evidence that credits represent additional reductions. Companies will need robust documentation showing that interventions went beyond business-as-usual improvements. Carbon reporting compliance services can help establish the necessary verification processes.

What procurement teams need to consider now

Procurement functions sit at the intersection of cost control and sustainability requirements. Environmental attribute credits introduce a new variable into supplier selection and contract negotiations. Teams will need to understand how different suppliers can generate or transfer credits based on their production methods.

This may influence make-or-buy decisions. If purchasing low-carbon materials generates credits, the effective price premium shrinks. Similarly, long-term supplier development programs that reduce embedded emissions could create credit value beyond the immediate cost savings from efficiency improvements.

Tender responses increasingly require detailed carbon footprint information. Companies that can demonstrate genuine supply chain reductions through verified credits may gain competitive advantages. However, this works both ways. Buyers may begin requiring suppliers to meet specific carbon intensity thresholds or provide credits as part of contract terms.

Public sector procurement adds another dimension. PPN 06/21 already requires carbon reduction plans from suppliers bidding on major government contracts. As insetting standards mature, procurement authorities may accept or even prefer credits generated within relevant supply chains over generic offsets. This could reshape how companies approach carbon reduction plan requirements.

Finance teams should also prepare for these changes. Credits have accounting implications, particularly regarding who books the associated emissions reductions. If a supplier generates credits from improvements funded by a customer, clear contractual terms must establish ownership. This touches on revenue recognition, sustainability reporting, and potentially tax treatment.

Technical standards and verification considerations

The effectiveness of environmental attribute credits depends entirely on verification rigour. Unlike some traditional offsets where emissions reductions occur in remote locations, insetting happens within commercial supply chains. This proximity offers verification advantages but also introduces complexity.

Product-level accounting requires tracking emissions intensity at a granular level. A steel mill producing both conventional and low-carbon steel must accurately allocate emissions to specific batches. Buyers need assurance that the low-carbon product they purchased actually came from cleaner production processes. This demands more sophisticated measurement than company-wide carbon accounting.

Third-party verification will likely become standard, similar to current offset project validation. However, verifiers must understand industrial processes and supply chain logistics, not just carbon accounting methodologies. This may require new expertise or training for existing verification bodies.

Double-counting presents perhaps the most significant technical challenge. If a supplier reduces emissions, multiple parties might claim credit. The supplier could report lower absolute emissions, the buyer could claim Scope 3 reductions, and potentially a credit purchaser could retire units representing the same activity. Registries must establish clear rules about who can claim what.

Timing also matters. Credits should ideally be issued and retired in the same period as the actual emissions reduction occurs. This prevents companies from banking credits from past improvements while current emissions remain high. However, commercial realities may require some flexibility, particularly for long-term contracts or capital-intensive projects.

Regulatory landscape and compliance context

While insetting currently operates in the voluntary market, regulatory developments will shape its evolution. The UK government has signaled intentions to strengthen climate disclosure requirements and potentially introduce mandatory elements to carbon markets. Environmental attribute credits could become part of compliance frameworks rather than purely voluntary tools.

The Department for Energy Security and Net Zero continues to develop policies supporting industrial decarbonization. Supply chain credits align with objectives around creating markets for low-carbon materials. Consequently, government procurement or subsidy programs might incorporate insetting mechanisms.

International accounting standards also matter. As more jurisdictions implement mandatory climate disclosure, how companies report Scope 3 emissions and associated reductions will need consistency. The International Sustainability Standards Board and other bodies are developing frameworks that may eventually address insetting credits.

For UK businesses, this creates both opportunity and uncertainty. Early adopters of credible insetting standards may be well-positioned for future regulatory requirements. However, standards that seem acceptable today might not meet tomorrow’s compliance criteria. Companies should focus on high-integrity credits with robust verification rather than chasing the lowest-cost options.

Export-oriented businesses face additional considerations. If major markets like the EU or US develop different approaches to supply chain credits, companies may need to navigate multiple frameworks. Harmonization efforts are underway, but divergence remains possible. Therefore, maintaining flexibility in credit strategies makes sense until international standards crystallize.

Market integrity and reputational considerations

The voluntary carbon market has faced significant criticism over offset quality. Investigations have found that some projects delivered fewer emissions reductions than claimed, or would have happened regardless of credit finance. These controversies have made companies cautious about carbon credit claims.

Insetting may avoid some of these pitfalls. Reductions within a company’s supply chain are often easier to verify than those from distant forestry or renewable energy projects. Buyers have commercial relationships with suppliers and can conduct due diligence. Furthermore, supply chain investments often deliver co-benefits like improved efficiency or product quality alongside emissions reductions.

However, insetting is not immune to integrity challenges. Companies might claim credit for supplier improvements that were already planned or financially attractive without credit revenue. This violates the additionality principle central to credible carbon markets. Registries must develop robust tests to ensure credits represent genuine incremental action.

Transparency will be essential for maintaining credibility. Companies should expect to disclose detailed information about how credits were generated, who funded associated investments, and how ownership was allocated. Vague claims about “supporting supply chain decarbonization” will not satisfy informed stakeholders.

Reputational risk extends beyond technical accuracy. Even verified credits may attract criticism if they appear to substitute for direct action. Companies should position insetting as complementary to their own emissions reductions, not as a replacement. According to Science Based Targets initiative guidance, the priority remains absolute emissions cuts within a company’s own operations.

Preparing for market participation

Companies considering environmental attribute credits should start with clear objectives. Credits might support several goals including compliance with customer requirements, competitive positioning in tenders, or financial justification for sustainable procurement decisions. Different objectives may point toward different credit types or strategies.

Baseline measurement comes next. Understanding current Scope 3 emissions and identifying high-impact reduction opportunities allows companies to target insetting efforts effectively. This typically requires more detailed supply chain data than many businesses currently collect. Consequently, improving data systems may be a prerequisite for meaningful participation.

Supplier engagement will be critical. Many potential insetting opportunities require supplier cooperation or investment. This works best within collaborative relationships rather than purely transactional purchasing. Companies may need to provide technical or financial support to help suppliers implement cleaner processes.

Contract terms should address credit ownership and allocation clearly. If a buyer funds a supplier’s equipment upgrade, who owns resulting credits? What happens if the supplier sells similar products to other customers? These questions need answers before disputes arise. Legal and commercial teams should develop standard clauses as insetting becomes more common.

Internal coordination matters as well. Procurement, sustainability, finance, and legal teams all have roles in insetting strategies. Companies that integrate these functions will likely execute more effectively than those where sustainability operates in isolation. Training programs on carbon accounting and supply chain decarbonization can help build cross-functional understanding.

Where to find authoritative guidance

Businesses seeking detailed information on emerging insetting standards should monitor announcements from Isometric and Verra directly. Both registries publish methodology documents and stakeholder consultation materials as standards develop.

The UK government’s carbon markets guidance provides context on voluntary market participation and potential regulatory developments. While not specific to insetting, this resource helps companies understand the broader policy landscape.

For Scope 3 measurement methodologies, the GHG Protocol Scope 3 Standard remains the foundation. This technical guidance from the Greenhouse Gas Protocol establishes how companies should calculate supply chain emissions, which underpins credible insetting approaches.

Industry-specific resources may also prove valuable. For example, construction firms should review guidance from the Construction Leadership Council on embodied carbon, which increasingly discusses low-carbon materials procurement.

Companies in regulated sectors should consult their primary regulators for any specific requirements or guidance on carbon credit use. While insetting currently sits outside most regulatory frameworks, this may change as climate policy evolves.