The term "1 carbon credit" typically refers to a carbon offset representing the reduction, avoidance, or removal of one metric ton (about 2,204.62 pounds) of carbon dioxide equivalent (CO2e) emissions. Carbon credits are part of a market-based approach to address climate change by putting a price on carbon emissions and creating financial incentives for activities that reduce or remove greenhouse gas emissions.

Carbon credits are a key component of carbon trading, which is a market-based approach to reducing greenhouse gas emissions. The concept is rooted in the idea of cap-and-trade systems designed to limit the total amount of carbon dioxide (CO2) and other greenhouse gases that industries can emit into the atmosphere.

The voluntary carbon market involves the trade of carbon credits on a voluntary basis, where businesses and individuals voluntarily offset their carbon emissions by purchasing credits from projects that reduce or capture greenhouse gases.

Various entities buy carbon credits as a way to offset their own greenhouse gas emissions and demonstrate a commitment to environmental sustainability. The buyers of carbon credits can include,Companies and Corporations,Governments and Public Institutions,Financial Institutions and Investors,Carbon Offset Platform,Compliance Markets and Individuals and Consumers.