Carbon Credit Procurement: Direct Purchase vs. Long-Term Contracts - Which Strategy Wins?

alexandrebrunet23
Jul 24
4 min read

If you’re here, it’s probably because you truly understand how impactful your company can be by investing in nature-based projects through the purchase of carbon credits.

By doing so, you help ensure that CO₂ is captured from the atmosphere naturaly, biodiversity can thrive again in restored or protected ecosystems, and local communities benefit from this positive impact.

Well done, you’re joining forces with companies like Meta (Facebook) and Microsoft in this effort.

Last May, both of them entered into long-term carbon credit purchase agreements to support a forestry project in the Olympic Peninsula, Washington State. By locking in prices upfront, both companies protected themselves against significant market volatility

Side note: ARR (Afforestation, Reforestation, and Revegetation) project prices, for example, increased by over 19% between 2024 and 2025 (EM SOVCM Report).

This strategy not only secures more stable and typically lower pricing over the life of the contract compared to spot market rates, but also provides the project with the financial stability required to scale - creating value for all parties involved.

This isn’t just a story about procurement tactics-it’s about how businesses navigate the $2 billion carbon credit market while balancing cost, risk, and impact.

At Apolownia, we specialize in nature-based carbon offset project development and also... sourcing, helping organizations secure high-integrity credits through strategic purchasing. But which approach is right for you: spot purchases for immediate needs or long-term contracts for stability?

Let’s dissect both strategies-pros, pitfalls, and real-world lessons-so you can build a carbon procurement plan that’s both financially sound and environmentally credible.

I. Why Procurement Strategy Matters

Carbon credits are not a commodity - they’re a time-sensitive, project-dependent asset. A poorly structured procurement strategy can lead to:

Budget blowouts (volatile pricing)
Reputation risks (greenwashing accusations)
Supply shortages (scarcity of high-quality credits)

Two dominant approaches exist:

Direct (Spot) Purchase - Buy now, retire immediately.
Long-Term Contracts - Lock in future supply at fixed rates.

There’s a third option - direct project investment - but we won’t explore that strategy here. Instead, we’ll focus on approaches that start carbon credits delivery immediately, not years down the line and with no prepayment needed. That said, feel free to reach out if you’re interested in investing in high-quality nature-based carbon projects

So which one wins? The answer depends on your emissions timeline, budget, and risk appetite.

II. Spot Purchase: Fast, Flexible, but Financially Unpredictable

What Is Spot Carbon Credit Procurement?

Purchasing already-issued (ex-post) credits from exchanges, brokers, or retailers for immediate retirement.

Key Advantages:

Instant Offset Claims - Credits are verified and ready, ideal for annual sustainability reports or short deadlines.
No Delivery Risk - The carbon reduction/removal has already happened.
Market Agility - Buy only what you need, when you need it.

The Limits:

Price Volatility - Spot prices can spike 200%+ during peak demand (e.g., year-end corporate reporting).
Limited High-Quality Supply - Top-tier nature-based credits (reforestation, mangrove projects) sell out fast.
Repeat Procurement Hassle - No guaranteed future supply means constant renegotiation.

Who Should Use Spot Purchases?

Companies needing short-term offsets (e.g., event carbon neutrality).
Businesses testing carbon markets before committing long-term.
Buyers prioritizing simplicity over cost predictability.

III. Long-Term Contracts: Stability, Savings, and Supply Security

What Are Carbon Credit Offtake Agreements?

Multi-year contracts securing future carbon credit deliveries (ex-ante) at pre-negotiated prices.

Why Big Players Prefer This Model

Price Lock-In: Hedge against inflation (carbon prices rose 217% from 2020-2024).
Supply Guarantee: Ensure access to high-demand projects (e.g., Apolownia’s nature-based portfolios).
Project Influence: Some deals allow co-developing new offset projects (e.g., Microsoft’s afforestation partnerships).

The Risks You Can’t Ignore

Delivery Risk: If a project underperforms, fewer credits may be generated; however, this risk is mitigated by the contract clauses in place.
Contract Complexity: Requires more thorough legal and financial review before signing.
Reduced Flexibility: Hard to pivot if new technologies (e.g., DAC) become viable.

Who Benefits Most from Long-Term Contracts?

Corporations with multi-decade net-zero pledges.
Investors seeking scalable, high-impact nature-based projects.
Buyers who prioritize budget certainty over short-term flexibility.

IV. Side-by-Side Comparison: Which Procurement Strategy Wins?

Factor	Direct Purchase (Spot Market)	Long-Term Contracts
Price Stability	❌ Volatile (spot market swings)	✅ Fixed rates
Supply Risk	❌ Limited high-quality credits	✅ Guaranteed future access
Delivery Certainty	✅ Credits already exist	❌ Project may underperform (Contracts offer alternative solutions)
Cost Efficiency	❌ Higher per-ton cost	✅ Bulk discounts
Flexibility	✅ Buy only what’s needed	❌ Long-term commitment
Impact Potential	❌ Supports existing projects	✅ Can fund new initiatives

Verdict: A hybrid approach (70% long-term, 30% spot) balances stability and agility - Long-term and short-term strategy.

V. A Smarter Carbon Credit Procurement

At Apolownia, we help businesses invest in nature-based carbon projects that deliver high-integrity credits - whether through:

Direct purchases from our vetted reforestation & mangrove portfolios.
Custom offtake agreements securing future credit streams.

We can build a custom contribution strategy that combines both short- and long-term approaches, ensuring your climate objectives are perfectly met.

Thinking about tech-based credits? Why not. But let us share a few key advantages of choosing Nature-Based Credits:

Much more affordable – up to 100 times cheaper.
Beyond carbon – delivers biodiversity co-benefits such as wildlife habitat restoration and water filtration.
Appreciation potential – rising demand for high-quality nature-based offsets increases their long-term value.
Regulatory resilience – aligns with emerging ESG and sustainability disclosure requirements.

VI. The Future of Carbon Procurement: What’s Next?

The market is shifting:

Stricter regulations (e.g., ICVCM’s Core Carbon Principles) will weed out low-quality credits.
Tech-driven transparency (blockchain, satellite monitoring) reduces delivery risks.
Buyer alliances (e.g., Symbiosis, Frontier Climate) are pooling demand to fund breakthrough projects.

The question isn’t whether to buy carbon credits - it’s how to buy them wisely.

And with prices on the rise, it is wise to secure your position early.

"The best time to secure your carbon credit strategy was yesterday. The second-best time is now."

Whether you need:

Immediate spot purchases for this year sustainability goals.
Long-term contracts to secure your supply in the coming years, especially if you have SBTi targets for 2030 and 2050.

Apolownia’s solutions offer verified credits with measurable ecological impact, designed to meet all your time horizons.

ABOUT APOLOWNIA

Apolownia is a mission-driven company committed to making a significant impact in the climate sector.  

We support businesses and funds willing to engage in long-term and impactful decarbonization strategies - within and beyond their own value chain - by designing, implementing and monitoring science-based carbon reduction projects that restore natural ecosystems.

Through technology and innovative solutions, we aim at shaping a resilient and environmentally friendly world, by encouraging the decarbonization of the economy and supporting social and environmental initiatives.

You can drive positive change for the climate, biodiversity and local communities.