ARR Carbon Credits in India: What VM0047 Means for Corporate Buyers
Tree-planting carbon credits have carried a credibility problem for years. Buyers could rarely tell whether a project's claimed tonnes reflected trees that would have grown anyway. That is now changing, and India has just moved to the centre of the story.
Afforestation, reforestation and revegetation credits — ARR — are the fastest-maturing corner of the carbon removal market. In February 2026, India registered its first project under the market's most demanding ARR rulebook. If your company is planning a nature-based purchase this year, here is what has actually changed and what to check before you sign.
What ARR carbon credits are
ARR credits are issued for carbon that trees and vegetation draw out of the atmosphere as they grow, either on land that was previously non-forest or where degraded forest cover is being restored. They are removal credits, not avoidance credits — a distinction that matters because most corporate claim frameworks and assurance providers treat the two very differently. We covered that split in detail in our guide to carbon removals versus avoidance credits.
The category is also central to Indian climate policy. India's Nationally Determined Contribution commits to creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030, against a 2005 baseline. The Forest Survey of India reports roughly 1.97 billion tonnes achieved so far. Restoration is not a niche corporate gesture here; it is national policy with a funding gap.
Why VM0047 raised the quality bar
VM0047 is Verra's afforestation, reforestation and revegetation methodology, released in October 2023 under the Verified Carbon Standard. Three features separate it from earlier forestry methods:
Dynamic performance benchmarks. Rather than relying on a counterfactual the developer models itself, VM0047 compares the project area against similar real-world control areas tracked by remote sensing over the same period. If trees are regenerating on comparable land anyway, the creditable volume shrinks.
A plant-count option. A complete census approach covers dispersed planting such as agroforestry and urban forestry, where trees sit across many farms or city plots rather than in one contiguous block.
CCP eligibility. The Integrity Council for the Voluntary Carbon Market approved VM0047 v1.0 in December 2024 as meeting its Core Carbon Principles, and has since approved v1.1. Projects using either version carry the CCP label — see our explainer on high-integrity credits and the CCP label.
The methodology is still young enough to be scarce. Verra approved the world's first issuance under VM0047 only in April 2026, when the Brazil Cerrado 1 project was authorised to issue 230,120 units.
India's first VM0047 project
On 19 February 2026, Climate Impact Partners announced the registration of Project Aranya in Madhya Pradesh — the first VM0047 project in India and, at the time, only the fourth registered worldwide. Its published design:
Up to 10 million mixed native trees planted across farmer lands
Around three million tonnes of carbon removal over the project life
Farmer income from a share of carbon credit sales plus sericulture and fruit value chains
Water infrastructure — ponds, borewells and drip irrigation — built in to support tree survival
An ex-ante A.pre rating from BeZero Carbon, with a long-term offtake agreement covering a significant share of the volume
That is the shape of the market Indian buyers are entering. Credible domestic ARR supply now exists, but anchor buyers contract early and quality volume tightens fast.
What Indian buyers should check before signing
Whether you are purchasing issued credits or funding a plantation directly, ask for the same evidence:
Methodology and version. VM0047 v1.0 and v1.1 carry the CCP label. Older afforestation methodologies do not, and are harder to defend in an assurance review.
Ex-ante versus issued. Many ARR deals are forward purchases against future issuance. Understand the delivery risk and what happens contractually if the project under-delivers.
Independent ratings. Ask for the rating agency's reasoning, not just the letter grade, and check whether it is a pre-issuance or post-issuance assessment.
Permanence and buffer. Confirm the buffer pool contribution and reversal provisions. Fire, drought and encroachment are live risks across Indian landscapes.
Land tenure and benefit sharing. On farmer land, the agreement with landholders effectively is the project. Ask to see it.
Survival monitoring. Planting is cheap; keeping trees alive for a decade is not. Our plantation survival-rate due diligence checklist applies equally to ARR projects.
Where this leaves your 2026 budget
ARR is one of the few categories where a domestic purchase, a defensible removal claim and measurable local benefit line up at the same time. It is also a category where scrutiny is rising alongside price, which means the useful work right now is diligence rather than procurement. Companies that understand the methodology, the ratings and the contract structure will buy better than those reacting to a year-end deadline.
Csquare helps Indian companies evaluate nature-based credits and delivers its own native-species afforestation programmes. If you are shortlisting ARR volume for this financial year, talk to our team and we will review the projects on your list against the checklist above.
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