explainer
Voluntary vs compliance carbon markets
The two carbon markets do completely different things — one is the law, one is corporate ambition. Which one matters when you book a hotel?
Two different markets, doing two different jobs
Carbon markets come in two flavours and most public discussion treats them as one. They are not. The voluntary market is corporate ambition. The compliance market is the law. They overlap in language and very rarely in mechanism.
Compliance markets exist because governments cap how much CO₂ a sector can emit and require companies in that sector to surrender allowances equal to their emissions. The EU ETS, California's cap-and-trade, the UK ETS, China's national ETS, RGGI in the US Northeast, and Korea's K-ETS are the major ones. If your steel mill emits 100,000 tonnes in 2026, you must hand 100,000 EU allowances to the regulator by the deadline or pay a heavy penalty. Allowances are auctioned, traded between regulated entities, and have an underlying scarcity set by political decision.
Voluntary markets exist because companies and individuals choose to retire credits for reasons that are not legal compliance. Net-zero pledges, ESG ratings, corporate value statements, retail products with offset features, individual consumer choice — all of these drive demand for voluntary credits. Verra and Gold Standard issue the bulk of voluntary supply.
Why the prices diverge so wildly
EU ETS allowances trade around €70-100 in 2026. Voluntary forestry credits trade at $4-20. This is not arbitrage failure. It reflects three structural differences.
First, regulators control the supply of compliance allowances and have actively tightened it over the past decade. The EU's Linear Reduction Factor cuts the cap by 4.3% every year through 2030. Voluntary credit supply is determined by project developers responding to demand — when corporate appetite drops, supply doesn't tighten the same way.
Second, the demand profiles differ. Compliance demand is mandatory and predictable. Voluntary demand fluctuates with corporate pledges, NGO scrutiny, and headline cycles. The 2024-2025 voluntary-market downturn followed a series of high-profile reports questioning forestry credits — voluntary demand fell roughly 50%, which would have been impossible in a regulated market.
Third, the quality is different. Compliance allowances are by design fungible — one EU ETS allowance equals any other. Voluntary credits are not — a removal credit from a DAC project and an avoidance credit from a REDD+ project both nominally equal 'one tonne' but represent radically different climate effects.
What this means for travel
If you book a hotel through a platform that says it 'offsets your stay,' you are almost certainly buying into the voluntary market. Compliance allowances are sometimes used by airlines under CORSIA, but hotel chains and OTAs operate entirely in the voluntary space.
That isn't a problem — voluntary is the right market for travel, because hotel emissions are not regulated under any current cap-and-trade scheme. The question is whether the specific voluntary credit your platform retires is one of the high-quality ones. The test is the same as for any voluntary credit — public registry URL, named methodology, verifiable retirement record, ideally weighted toward removals rather than avoidance.
What IMPT does
IMPT operates in the voluntary market. Every booking retires one credit, default-weighted toward Verra and Gold Standard removal-track methodologies (biochar, mangrove restoration). We do not buy EU ETS allowances — they would be useless against hotel emissions and economically irrational at €90/tonne.
Whenever the voluntary market changes its supply mix or registry rules shift, our weighting changes too. That's a deliberate design choice — the goal is the highest-integrity tonne available, not the cheapest one.
Book a hotel — one tonne of CO₂ retired automatically.
Every IMPT hotel booking retires one Verra- or Gold Standard-listed carbon credit on your behalf. No add-on fee, no upsell, no catalogue. Just verified, on-chain retirement.