There are numerous markets for trading carbon, however the main regulated market is in the European Union valued at USD 30 billion. These countries, committed under the Kyoto Protocol, have accepted targets to reduce their emissions. In order to meet these targets, organizations must either change their operating behavior, change their business model, or purchase carbon offsets.

As more countries regulate their emissions, the demand for carbon offsets will grow exponentially. By 2013 there is expected to be a demand of over 1.5 billion offsets with only a 100 million offsets supplied - creating more than a 1.4 billion carbon offset shortage.

Types of Regulated Carbon Offsets

Under the Kyoto Protocol’s emissions trading scheme various carbon offsets may be transferred, each equivalent to one tonne of carbon dioxide:

• An Assigned Amount Unit (AAU) where regulated countries can trade excess offsets under their cap
• A Removal Unit (RMU) on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation
• An Emission Reduction Unit (ERU) generated by a joint implementation project
• A Certified Emission Reduction (CER) generated from a clean development mechanism project activity

Transfers and acquisitions of these units are tracked and recorded through the registry systems under the Kyoto Protocol.
  An international transaction log ensures secure transfer of emission reduction units between countries.