Carbon Credit Retirement

Definition ∞ Carbon Credit Retirement is the process of permanently removing a carbon credit from active circulation. This action confirms that a specific amount of carbon dioxide equivalent has been offset or reduced. Once retired, a credit cannot be re-used, ensuring the integrity of emission reduction claims. It is a critical step in environmental accounting.
Context ∞ The tokenization of carbon credits and their retirement on blockchain platforms offers enhanced transparency and verifiability. This digital approach aims to prevent double-spending and improve tracking of climate action initiatives. Debates focus on the verification standards for underlying carbon projects and the overall integrity of these digital markets.