This latest edition of Innpact Insights provides a quick, practical guide on how carbon credit funds work, why they are relevant, and how they can be structured through Luxembourg fund vehicles such as the RAIF.
The guide explains how carbon credit funds can pool capital from investors, pre-finance carbon projects, link disbursements to project milestones, and provide investors with carbon credits as in-kind payments once projects advance through the carbon verification cycle.
It also looks at the wider market and regulatory context, including the need for carbon removals, the EU Carbon Removals and Carbon Farming Certification framework, and the growing focus on high-quality, verifiable carbon credits in the voluntary carbon market.
Carbon credit funds can support different types of projects, including Nature-Based Solutions such as reforestation, soil carbon sequestration and wetland restoration, as well as Technology-Based Solutions such as direct air capture, biochar, and carbon capture and storage.
❍ Why carbon removals are needed alongside emissions reductions
❍ How the EU certification framework for carbon removals works
❍ How carbon credit funds can pre-finance projects
❍ How investors may receive carbon credits as in-kind payments
❍ Why diversification, accessibility and simplified execution matter
❍ Why the Luxembourg RAIF can be a sound structure for carbon credit funds
Innpact helps fund sponsors and investors design, set up and manage carbon and nature credit funds, from fund concept and impact strategy to legal set-up, service provider selection, SFDR compliance, third-party AIFM services and impact reporting.
Download the full guide to learn how carbon credit funds can help finance carbon avoidance and removal projects through structured, diversified and professionally managed investment vehicles.
