carbon credit
compound.compound. a permit that allows a company or country to produce a certain amount of carbon emissions. If they produce less than their limit, they can sell the extra credit to others.
compound. a tradeable certificate or permit representing the right to emit one tonne of carbon dioxide or an equivalent amount of another greenhouse gas. Used as a market-based mechanism to incentivise the reduction of emissions.
The company bought carbon credits to offset its factory emissions.
By investing in reforestation projects, the airline earned carbon credits to balance its annual flight emissions.
International regulatory frameworks allow firms to trade carbon credits, effectively placing a financial cost on pollution and encouraging investment in low-carbon technologies.
Last updated July 27, 2026