Notice. This page is informational and general in nature. Carbon credit transactions remain subject to KYC and AML, sanctions screening, buyer eligibility criteria, registry and title verification, counterparty acceptability, and definitive documentation. FG Capital Advisors is not an exchange, registry, bank, or lender. We do not accept client money or custody carbon credits. No pricing, liquidity, or timeline is guaranteed.
Where Carbon Credits Sit When They Are Not On An Exchange
If a carbon credit is not “on an exchange,” it is not floating in space. It is usually sitting in a registry account, held as inventory by a project or corporate buyer, or referenced inside a forward contract that has not issued yet. Once you understand where credits actually live, you stop wasting time on the wrong process.
If you are selling credits and want a structured buyer process, start here: OTC Carbon Credit Placement Services.
The One Sentence Answer
Off-exchange carbon credits are held inside registries(as serialized units under an account), inside private inventories(developer or corporate holdings), or inside forward contracts(rights to future issuance), and they move by registry transfer and retirement, not by an exchange order book.
Exchanges list standardized contracts. The rest of the market is OTC, and it runs on documentation, acceptance criteria, and settlement mechanics.
Where Carbon Credits “Live” Off-Exchange
| Location | What It Actually Is | What You Can Do With It | Common Failure Point |
|---|---|---|---|
| Registry account | A registry is the system of record. Credits are issued as unique serial numbers and sit under an account holder’s name. | Transfer to a buyer’s account, or retire on behalf of a buyer (depending on the deal). | Seller cannot prove control of the account, transfer restrictions exist, or the serials do not match what was marketed. |
| Developer inventory | Post-issuance credits held by the project developer, or by a commercialization partner acting under a mandate. | OTC sales to corporates, traders, or funds. Can be sold spot or structured with staged delivery. | Weak file, unclear authority, or inconsistent project narrative versus registry documentation. |
| Corporate inventory | Credits already purchased and held by a corporate buyer, sometimes awaiting retirement timing or internal approvals. | Retirement for claims, or secondary resale where rules and internal governance allow it. | Resale is prohibited by policy, or reputational risk blocks transfer even if legally possible. |
| OTC broker book | Not a “warehouse.” A broker controls access to buyers and manages negotiation, diligence flow, and settlement terms. | Price discovery for the specific asset, buyer screening, term negotiation, closing coordination. | Parties treat it like an exchange trade and refuse to provide a buyer-ready pack, so bids never become executable. |
| Forward / offtake contract | A contract for future credits that are expected but not issued yet, tied to project milestones and verification cycles. | Lock pricing and delivery schedule; provide revenue certainty to the project; can be collateralized in some structures. | Issuance delays, methodology changes, verification slippage, or unclear remedies in the contract. |
Registries Are the Backbone (Even If You Never Trade “On Screen”)
In the voluntary market, the registry is the source of truth for existence and ownership. If credits are issued, they are serialized and visible in the registry under an account. That is where title is checked and where transfer happens.
What a buyer wants to verify
- Volume and serial ranges. The numbers must match the offer.
- Account control. The seller must show authority to transfer.
- Status. Issued vs pending issuance, and whether units are transferable or already retired.
- Project identity. The project documentation must align with what is being sold.
If you cannot demonstrate title and transferability early, the rest of the process is theatre.
If It Is Not Issued Yet, You Are Selling a Contract
A lot of “available supply” in carbon markets is not issued inventory. It is expected issuance. When that happens, you are not selling credits. You are selling rights under a forward or offtake agreement.
What changes in forwards
- Credit risk becomes project execution risk. Verification cycles, monitoring, and issuance timelines drive delivery.
- Pricing trades off against certainty. Buyers push discounts for uncertainty and lock-up time.
- Remedies matter. If issuance slips, the contract must define replacement, extensions, or termination rights.
The biggest mistake sellers make is presenting forward supply like spot inventory. Serious buyers notice immediately.
Why Credits Not On An Exchange Still Have a “Market”
Off-exchange does not mean illiquid. It means negotiated. OTC markets clear when the buyer can approve the asset internally and the settlement method is operationally clean.
What actually creates an executable OTC bid
- Buyer fit. Eligibility screens decide if the buyer can even look at the asset.
- Defensible claims. Corporate buyers price in reputational exposure.
- Settlement design. Clear delivery definition and payment conditions stop last-minute disputes.
- File quality. Clean evidence reduces perceived risk and improves pricing.
How Off-Exchange Settlement Works
Exchanges push settlement into venue rules. OTC must define settlement explicitly. In practice, most OTC carbon trades close through a controlled sequence that ties payment conditions to registry transfer steps.
| Step | What Happens | What Breaks Deals |
|---|---|---|
| 1 Buyer screening | Buyer confirms eligibility screens (project type, registry, vintage, geography, methodology). | Seller cannot answer basic spec questions or changes the story mid-stream. |
| 2 File review | Registry evidence and authority checks. Project documents aligned to the offer. | Missing title evidence or unclear account control. |
| 3 Term negotiation | Price, volume, delivery definition, transfer fees, acceptance, representations, and remedies are agreed. | Parties leave “delivery” vague and it becomes a fight later. |
| 4 Compliance clearance | KYC and AML checks, sanctions screening, and counterparty approvals. | Counterparty refuses disclosures, or fails screening. |
| 5 Registry transfer | Credits move from seller account to buyer account, or are retired as specified. | Transfer restrictions, registry delays, or serial mismatch. |
| 6 Payment release | Payment is released per the agreed settlement method after defined evidence of delivery. | Payment conditions were not defined, leading to stalling and disputes. |
The process can be fast. It is slow when the file is incomplete and the contract is vague.
Practical Checklist Before You Go to Market
If you are selling credits and you want serious buyer engagement, treat this as non-negotiable:
- Registry proof. Account ownership, volumes, serial ranges, and transferability.
- Authority. Entity documents, signatory authority, and UBO disclosures where required.
- Specs. Registry, standard, methodology, vintage, geography, project type, restrictions.
- Claims discipline. Language tied to documentation, not marketing.
- Settlement terms. Defined delivery and payment conditions that a buyer can approve.
If you want us to package and place the file, request a quote via OTC Carbon Credit Placement Services.
Want a controlled buyer process with clean settlement terms and registry transfer coordination? Request a quote or email your questions with registry, volumes, and target range.
FAQ
Where are carbon credits stored if they are not on an exchange?
Typically in registry accounts as serialized units. If not issued yet, they sit in forward contracts as rights to future delivery.
Do OTC brokers “hold” the credits?
Usually no. Brokers manage buyer access, diligence flow, negotiation, and closing. Credits remain in registry accounts until transfer.
Can a corporate buyer resell credits it already holds?
Sometimes, but many corporates restrict resale for policy and reputational reasons. You cannot assume secondary liquidity.
Why does settlement matter so much in OTC carbon trades?
Because there is no venue rulebook forcing standard behavior. Delivery evidence, payment conditions, and remedies must be defined in writing.
Do you take custody of credits or client funds?
No. We do not custody credits and we do not accept client money. Settlement and registry transfer occur between counterparties under definitive documentation.
Where do I request a quote for OTC placement?
Use OTC Carbon Credit Placement Services to request a quote and submit your file.
Disclosure. This content is for informational purposes and does not constitute legal, tax, accounting, or financial advice. FG Capital Advisors does not operate a registry, exchange, or trading venue and does not accept client money or custody carbon credits. Any support is provided on a best-efforts basis and remains subject to third-party approvals, compliance checks, and definitive documentation. No pricing, liquidity, or timeline is guaranteed.
