Carbon Markets Overhauled to Grant Landmark Rights to Communities

WASHINGTON, DC – December 16, 2025 – The multi-billion-dollar voluntary carbon market is undergoing a seismic shift. Verra, a leading global carbon certifier whose standards underpin roughly 40% of all credits, today announced a sweeping update to its rules, embedding robust community rights into the DNA of land-based climate projects. The new standard, which incorporates principles championed by the legal empowerment organization Namati and the Grassroots Justice Network, mandates financial transparency, revenue sharing, and gives communities the legal right to consent to projects on their land.

This move directly addresses years of criticism that carbon offsetting projects, intended to fight climate change, often sidelined or harmed the very Indigenous and local communities living on the frontlines. Under the updated Verified Carbon Standard (VCS) Program, developers of all land-based projects must now obtain the free, prior, and informed consent (FPIC) of affected communities before a single shovel breaks ground.

"Today's changes are a step towards carbon justice," said Namati CEO Vivek Maru in a statement, acknowledging the long road of advocacy that led to this moment. The new regulations are seen as a critical move to rebalance power dynamics in a market where local stewards of forests and ecosystems have often been left out of the financial benefits generated from their resources.

A New Era of Consent and Transparency

The updated rules from Verra, which manages over 2,000 registered projects worldwide, represent more than just a procedural tweak; they fundamentally alter the terms of engagement. The requirement for FPIC is now fortified by a mandate for a legally binding contract between developers and communities. This gives communities a formal, enforceable opportunity to negotiate the terms under which a project can proceed, including their right to say no.

For decades, many carbon projects have operated under a veil of secrecy, with complex contracts and opaque financial structures that left communities in the dark about the true value of their resources. The new standard tears down this wall. Project developers are now obligated to share crucial financial information, including the total revenue received from the sale of carbon credits. This transparency is a cornerstone of the six principles for fair carbon projects identified by the Grassroots Justice Network, an alliance of justice groups from 180 countries convened by Namati.

As Elijah Lempaira of Impact Kenya, a network member, noted, "Without access to information, fair benefit sharing and genuine participation from local communities, justice is lost." The principles were born from direct experience responding to problematic carbon projects in more than 20 countries, where communities faced everything from unfair deals to outright displacement.

Further strengthening community stakes, the rules now require that for any project on community land, developers must share a portion of the revenue. While the standard does not set a minimum percentage, it establishes a non-negotiable principle of benefit sharing, moving the industry away from models where communities received little to no compensation.

Reshaping a Market Under Scrutiny

Verra's influence is immense. With credits issued under its VCS Program accounting for over one billion tons of reduced or removed carbon dioxide equivalent, any change to its standard sends powerful ripples across the entire market. The new rules, collectively known as VCS Version 5, were developed after extensive consultation and are set to apply to all new projects starting January 1, 2027, with existing projects transitioning over time.

For project developers, these changes mean increased operational complexity and accountability. The process of securing genuine consent and negotiating legally binding, transparent revenue-sharing agreements will require more time, resources, and a fundamental shift in approach from transactional to collaborative. However, proponents argue this will ultimately de-risk projects. By ensuring community buy-in and benefit, developers can mitigate the potential for local conflict, reputational damage, and legal challenges that have plagued projects in the past. This enhanced social integrity is also expected to boost confidence among buyers and investors who are increasingly wary of purchasing credits tainted by human rights concerns.

The push for higher integrity aligns with the goals of oversight bodies like the Integrity Council for the Voluntary Carbon Market (ICVCM), whose Core Carbon Principles (CCPs) are designed to establish a global benchmark for high-quality credits. Verra's move is a significant step toward embedding social justice within that definition of quality.

The Sierra Leone Blueprint

A real-world example of these principles in action is already unfolding in Sierra Leone. In October 2025, more than 220 communities in Sittia Chiefdom, with legal support from Namati, signed a landmark carbon agreement to protect 79,000 hectares of mangrove forests—an area four times the size of Washington, D.C. This project is not just about preserving a vital ecosystem; it’s about pioneering a new, equitable model.

Guided by the same carbon justice principles that informed the recommendations to Verra, the agreement ensures that the communities themselves will lead the stewardship of the mangroves. Critically, they are guaranteed to receive at least 40% of the gross revenue from carbon credit sales. This emphasis on gross revenue, rather than the more easily manipulated "profit," ensures a more transparent and fair distribution of funds. The communities will even form a joint company with the developer, Africa Conservation Initiative (ACI), to manage the revenue, giving them direct decision-making power.

This agreement, one of the first to leverage Sierra Leone’s progressive 2022 Customary Land Rights Act, demonstrates that communities are not opposed to carbon projects, but want to pursue them on fair terms. To ensure the project's success and reduce pressure on the mangroves, it also includes provisions for alternatives like efficient cookstoves and timber woodlots.

The Path Forward

With Verra setting a new, higher bar, advocacy groups are now turning their attention to other major standard-setters. Namati has explicitly called for the new commitments to be reflected in other standards, such as ART-TREES, and to be fully integrated into the ICVCM’s Core Carbon Principles to ensure market-wide adoption.

Going forward, the conversation on carbon justice is expected to evolve further. Advocates are already pushing for future improvements, including establishing a mandatory minimum proportion of gross revenue that must be shared with communities across all projects. Another key demand is placing greater responsibility on the buyers of carbon credits, requiring them to demonstrate they are taking rigorous action to curb their own emissions first, ensuring that offsets are a complement to, not a substitute for, genuine decarbonization.