Tradable certificates or permits that represent the right to emit a specified quantity of greenhouse gases. Used within regulated carbon trading schemes, allowing entities to buy, sell, and trade emission rights under capped limits.
Main/
Carbon Credits and Emission Allowances
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Code
IN0028
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Name
Carbon Credits and Emission Allowances
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Version
1.0
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Category
Intangible/Non-Physical Property
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Created
2025-02-04
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Modified
2025-04-02
Related Techniques
- Criminals fabricate official-looking carbon credit or emission allowance certificates, claiming environmental compliance without any real offset activities.
- These forged sector-specific documents enable fraudulent trades in regulated carbon markets, concealing illegal proceeds through purported eco-friendly transactions.
- Criminals exploit lax or fragmented carbon credit regulations by purchasing bulk credits in one jurisdiction and rapidly reselling them across multiple brokers or shell entities in other regions, generating complex transactional trails.
- They leverage carousel fraud techniques, repeatedly trading the same credits to claim non-existent VAT rebates, thus inflating illicit gains.
- The intangible nature of carbon credits hinders effective AML oversight, allowing criminals to move funds swiftly through layering and obscure the illicit origin of proceeds.