The Biden administration released guidelines aimed at shoring up confidence in carbon offsets, a nearly $2 billion industry that’s been criticized for lacking its promised effectiveness.

The guidelines issued last week are nonbinding principles for the markets that allow corporations and individuals to invest in emissions reduction projects to offset some of their most carbon-intensive activities. They include things like projects having to meet “credible atmospheric integrity standards” and representing “real decarbonization.”

They arrive as carbon markets have come under fire over findings that the emissions reductions are often exaggerated or go toward projects that would have been completed regardless. Critics have argued that instead of offsetting any activity, they are effectively a form of greenwashing that only serves to obfuscate actual emissions.

“In recent years, researchers and journalists have found that a number of projects have not delivered the quality or quantity of emission savings they claimed,” Treasury Secretary Janet L. Yellen said at a White House event last week. “There are also genuinely hard questions of market design, such as how [voluntary carbon markets] can ensure that emissions-reducing activities are durable and truly additional.”

Yellen added that unlike other commodities where the purchaser can inspect them for quality, the emissions reductions promised through participation in carbon markets are often too difficult for any one purchaser to assess.

As part of the announcement, the White House said carbon offsets and any associated activities should require certifying bodies to apply principles such as ensuring that each credit is unique, meaning they can’t be sold more than once, and that any emissions removed or reduced would be kept out of the atmosphere for a set period of time.

These principles are intended to help create “high-integrity” voluntary carbon markets. However, administration officials say businesses should first focus on reducing emissions as much as possible before relying upon credits to meet climate targets.

At the same time, the Agriculture Department announced it was seeking information from the public on possible protocols for its program to provide third-party verification for carbon offsets from farmers and foresters. This program was authorized through a bill introduced by Sen. Mike Braun, R-Ind., and Senate Agriculture Chairwoman Debbie Stabenow, D-Mich.

Stabenow applauded the move, arguing that it would provide standards for a market with potential to generate new revenue streams for agriculture industry workers.

“That is a win-win for farmers, the economy, and the environment,” Stabenow said in a statement.

Nat Keohane, president of the Center for Climate and Energy Solutions, said the urgency of the need to address climate change means there is a need to leverage every available dollar but the market “should only scale if it has integrity.”

“The voluntary carbon markets have enormous potential to make a meaningful contribution to the climate crisis by catalyzing tens of billions of dollars a year or more in emissions reductions that represent billions of tons of emissions reductions in a way that finances climate solutions and sustainable green growth around the world and especially in the Global South,” Keohane said.

But Clara Vondrich, senior policy counsel with Public Citizen’s climate program, said in a statement that the Biden administration should “urgently turn to supporting accountability and enforcement mechanisms to eliminate the use of dangerous and low-quality offsets, which comprise most offsets on the market today.”

Vondrich added that the administration should also support a California state bill that would expand the state’s consumer protection laws to prohibit offsets that are unlikely to be quantifiable or additional. A similar proposal was vetoed last year by Democratic Gov. Gavin Newsom. 

Last year at the COP28 climate conference, the U.S. supported a deal to launch a system for offsetting carbon emissions, which would also allow countries to trade those offsets. The deal failed, however, in part because the European Union sought stricter standards in line with its own emissions trading system.