Blockchain vs. Traditional Carbon Registries: Pros, Cons & Risks

• 26 August, 2025
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The world’s race to decarbonize its economy has never needed carbon markets more. More than 28% of global emissions fall under a carbon price as of 2025 and voluntary markets reached a half-year high of 95 million carbon credit retirements in the first six months of the year. Demand is there, but scrutiny is even more so — buyers want to know that every credit they purchase actually reflects a genuine and unique reduction in emissions.

At the core of this is a series of carbon registries, the official record-keepers of issuance, transfer and retirement of credits. They have always been the trusted “source of truth.” But as markets grow in scale and digitize, blockchain-based systems are arriving to supplement them — offering transparency, programmability, and efficiency. The question isn’t whether blockchain will replace registries (it won’t), but how the two might coexist to enhance trust and efficiency.

This blog explores what traditional registries like Verra or Gold Standard offer in comparison to blockchain platforms, and the pros, cons, and risks of bringing the two together. We’ll also consider recent developments, such as India’s Carbon Credit Trading Scheme, and the growing popularity of high-integrity credits — before we answer the questions on the lips of businesses and investors in 2025.

A quick primer: what a carbon registry actually does

A carbon registry functions as the central, immutable ledger for carbon credits, assigning each one a serial number and accompanying documentation that proves its origins and lifespan. These ledgers are the assurance that buyers can check to prevent the risk of double-counting, and they confirm the approved methodology, the lineage of ownership, and that a credit has been permanently retired. The largest registries at present are Verra, operating under its Verified Carbon Standard (VCS), and Gold Standard.

• Issuance: Once a project has been audited and validated by an accredited third party, the eligible credits are then minted and allocated to the account specifically associated with that project.
• Transfer: When credits are traded or sold, they move from one account to another while the unique serial number is retained intact, ensuring the credit can still be traced unambiguously.
• Retirement: Retirement occurs when a registered credit has been called upon to offset an emission. It is permanently deleted from the registry, and the public retirement list then records its decommissioning, providing the necessary transparency for any claim of emission reduction to be credible.

Why this matters in 2025: The carbon market is systematically prioritising “high-integrity” credits. Assessments of additionality, permanence, leakage and the formal consent of the host country, as mandated under the Article 6 framework of the Paris Agreement, have become increasingly stringent. Registry metadata and on-label indicators are thus being enhanced to allow purchasers to filter and evaluate credit quality before committing capital.

Where blockchain fits (and where it doesn’t)

What blockchain adds (when done right):

Tamper-evident audit trails. Tamper-evident audit trails. Such on-chain records can potentially be used to trace all credit movement and every loan, with links to the serials on the registry and to the documents proving verification. 

Programmability.  With smart contracts, escrow, dvp, retire-on-evidence milestones can all be automated (e.g., IOT/satellite proof on nature projects).

Interoperability & liquidity. Tokens can be used to represent claims, make it possible for fractional ownership and create secondary markets – subject to the condition that the token is cryptographically bound to the originating serial and retirement status.

Each carbon credit can be represented as a unique NFT (non-fungible token), meaning that just as every registry-issued credit has a distinct serial number, its on-chain version can be minted as an NFT with embedded metadata (project ID, methodology, MRV hashes). This ensures 1:1 traceability between the registry unit and the blockchain representation.

Limits & Risks: (lessons from 2021–2024):

• Shadow assets.  If not every tokenized “credit” is backed by an active, yet unretired registry- recognized unit of the advisement type to which it refers—or if such a unit is retired off-chain, subsequently—it leads to a possibility to de-duplicate a token or count it as a null claim. It’s not exactly an integrity thing and trust on the part of the buyer.
  
• Recognition gap. Compliance systems (CORSIA, national ETS) and large corporations continue to acknowledge a registry retirement, not generic tokens. On-chain rails have to either match those retirements, or swallow those retirements.
  
• Data quality ≫ databases. Blockchains don’t make judgments about additionality or permanence — they merely store state. But quality still relies on methods, MRV, and verification from third parties.

What’s new in 2025 (and why it changes the calculus)

• Coverage & pressure: 28% is the share of global GHG emissions now covered by a carbon price, according to the World Bank’s State and Trends of Carbon Pricing 2025. That expansion makes it all the more necessary to have reliable registries and unfalsifiable tracking across borders and systems.
  
• Record usage: Carbon retirements in H1 2025 were estimated at ~95 million, the most for a half year on record, suggesting there remains genuine demand even as buyers get choosier.

• India’s market design: In mid-2025, information on MoEFCC notifications and commentary read that the CCTS will deliver compliance cuts (2–3%/yr from 2026 for some sectors), and that a voluntary window will run in parallel. These will stress test both provenance and MRV, and it will work in favor of solutions that have a seamless integration with official registries.
  
• VCM transition: Research (May 2025) VCM transactions finds the voluntary market in a “transition” phase with integrity initiatives up and liquidity down, relative to the boom years, making quality signals and registry labels more important.
  
• Corporate demand with Indian roots: Deals such as Google-Varaha (biochar) in India demonstrate that there’s durable demand for removals-oriented credits — but buyers still need strong registry traceability and retirements.

Risks to Monitor

Duplicate tokens: A credit token lacking a current registry serial may be erroneously repeated.

Weak methodologies: Blockchain can’t fix poor additionality or permanence—it just records data.
Regulatory drift: Regulatory texts (e.g. Article 6, CCTS) evolve, requiring adaptive technical designs.

Liquidity vs. quality: Markets are prioritizing integrity over speculation in 2025.

Pros & Cons: Side-by-Side

How they work together (the practical stack)

Blueprint for 2025 infrastructures, suitable for both developers and buyers:

Origin within a recognized registry (Verra or Gold Standard). Treat the registry as the definitive source for serials, holder data, and retirement events. The registry retains primacy.

Create a permissioned, append-only on-chain replica, recording serials, approved methodology IDs, and hashes from the validation report.

Frame tokens within strict boundaries:

• Token ≠ new credit. It’s a representation of the same unit, controlled via custody or lock at the registry.
• Each token should be structured as an NFT tied to the unique serial number issued by the registry. This allows the NFT itself to “carry” the attributes of the underlying carbon credit, ensuring that when the credit is retired, the NFT is automatically burned or locked.
  
• If a credit is retired in the registry, a burn/lock must auto-trigger on-chain.
  

Leverage programmable contracts for delivery-versus-payment, escrow, and milestone releases—especially suited for nature-based projects with staged verification.

Publish quality metadata—new GS labels and risk ratings—directly on-chain. This enables buyers to filter by integrity before executing transactions. 

Concrete signals in India: Both public and private sectors are advancing carbon-credit infrastructure, from regionally mandated carbon banks on Hedera to NABARD’s on-farm pilots. Growing demand is anticipated for digital MRV and interoperable slugs that externally settle while still keyed to the on-chart registry.

Real-world examples (2025)

• H1 2025 data show 95 million retirements, validating ongoing buyer demand for credits, albeit with heightened scrutiny of quality and eligibility (CORSIA Phase 1 approved only). This atmosphere favors transparent provenance—linked registry plus auditable digital trails.
  
• Corporate sourcing of removals in India: The Google–Varaha biochar deal exemplifies the increasing interest in removing credits tied to smallholder portfolios—where programmable MRV and milestone payments can shrink leakage and accelerate cash flow.
• In several blockchain-native platforms (e.g., Toucan, KlimaDAO), every carbon credit uploaded to the chain is wrapped as an NFT, with fractional ERC-20 tokens sometimes derived from it. This structure is now influencing institutional pilots, where credits must retain their uniqueness (NFT) but can also be made tradeable (fungible fractions).
  

Quick buyer checklist (2025)

• Registry verification is Primary: Confirm registry, project ID, associated serials, and public retirement logs. Screenshots are inadequate; authenticate on the ledger entry.
  
• Eligibility map: if CORSIA or ETS usage is required confirm that the project is certified for such retirement. Verra provides reference documents.
  
• On-chain, confirm anchoring: Tokens must link to serials and enforce 1:1 supply through automated retirements on the public ledger.
  
• Country authorization (Article 6): Examine that the project is accompanied by host-country consent and appropriate adjustments for landing international claims and corresponding adjustments where required.
• Data trail: Prioritize credits that make MRV reports, verifier statements, and any grafted registry tags revealing co-benefits or risk readily available.
• If offered a blockchain credit, check that it is minted as an NFT referencing a valid registry serial, and that its burn/lock mechanism mirrors registry retirement.
  

Bottom line 

Always treat the Verra and Gold Standard registries as authoritative for issuance, ownership, and retirement. Use the blockchain as an additive, not as an alternative, channel for transparent and automated processes—registry governance remains sovereign. NFT structures make sense only when each NFT directly mirrors a registry serial; without that link, they become shadow assets. Implement a 1:1 token-to-serial linkage with automated on-chain burn triggered by registry retirement, designed expressly to avert double counting. Synchronize with CCTS, CORSIA, Article 6 provisions, and the latest registry tags. The threshold for integrity is trending upwards, and 2025 data is already showing that buyers are steering toward supply that is evidently higher quality.

FAQs 

Which is “better”: blockchain or traditional registries?
Neither stands alone. Registries confer authority; blockchain brings speed and traceability.

Can I make valid climate claims with just a token?
No. Claims depend on a registry retirement (and any Article 6 or CORSIA stipulations). Tokens must cite those retirements.

What statistics define 2025’s market?
About 28% of emissions will sit under a carbon-priced system; retirements will hit 95 million in the first half of 2025—a record for any half.

Does India’s CCTS allow tokenized trading?
CCTS lays out compliance frameworks and targets; token frameworks must mirror those rules and still rely on registry confirmations.

How do I verify the credit I bought?
Go to the project page of the registry, verify the serial numbers, then confirm the retirement record corresponding to your claim date.

What are the top registries to know?
Verra (VCS) and Gold Standard continue to be the two most prevalent and reputable registries in 2025.

How do labels help me avoid risk?
Labels from registries provide insights into project features such as co-benefits and safeguards; they are essential for informed screening.

Is liquidity improving with tokenization?
It has the potential, but integrity features must be in place first. 2025 studies show the voluntary carbon market is favouring quality over turnover.  

Can blockchain fix additionality/permanence?
No. These remain issues rooted in climate science and methodology, not technology. Blockchain is about tracking and automation only; it does not itself guarantee environmental integrity.

Any 2025 corporate signals?
Yes. For instance, Google’s biochar offtake in Odisha; also, increasing buyer sentiment around long-term removals linked to demonstrated supply quality.

Should small Indian projects consider on-chain rails?
It could add value, particularly for milestone-linked disbursements and high-resolution monitoring, reporting and verification, but a practical pilot should begin with registry pathways that map to the Commonwealth Carbon Trading Standards and Article 6.