Biodiversity credits: Silver bullet or snake oil? 

Executive summary 

There is a major global shortfall in financing nature. Current estimates suggest we need hundreds of billions of dollars every year to halt and reverse biodiversity loss, yet current financing covers a fraction of this need. Public funding remains the most powerful lever for scaling finance for conservation, but existing finance is insufficient to match the urgency of the crisis. Thus, complementary mechanisms are essential. In particular, the private sector – whose value chains are fundamentally dependent on nature – must play a far greater role.  

Biodiversity credits are emerging as a private-sector tool to help close the nature financing gap. While definitions vary, biodiversity credits generally represent certificates issued when measurable gains in biodiversity are achieved over a defined period. Units are typically measured by a combination of land area, measurable ecological gains (through a suite of metrics) and the duration of the commitment, providing a tangible way to link conservation outcomes with private investment.   

Depending on how the global market develops, biodiversity credits are projected to be worth between $760 million and $2 billion annually by 2030, rising to $6–69 billion by 2050. Today, however, the market is valued at only ~$8 million, reflecting both its potential but also the considerable uncertainty that surrounds its future. In the marine realm, this market is virtually non-existent. Nevertheless, momentum is growing as certification bodies are increasingly partnering with marine NGOs to develop credible, high-integrity pilot projects. 

While private-sector mechanisms such as biodiversity credits should not replace public funding or divert attention from the systemic reforms needed to address biodiversity loss, they can play a valuable role in mobilising long-term finance for locally-led conservation and restoration projects. To be effective, these schemes must be designed with high-integrity – underpinned by robust science, transparent governance and fair benefit-sharing. In the absence of compliance markets, voluntary markets serve as a critical proof of concept, showing whether such approaches can deliver real outcomes for nature and communities. Over time, regulatory drivers will be essential to stimulate demand and scale the market. 

What is ‘Nature Positive’? 

The concept of “Nature Positive”– a global ambition to halt and reverse biodiversity loss – is rapidly gaining traction as a strategic response to the biodiversity crisis. This shift reflects a growing consensus that existing “no net loss” approaches are inadequate to achieve ecosystem recovery at the scale and pace required.  

“No net loss” aims to ensure that any biodiversity lost through development or other human activities is compensated by conservation or restoration efforts elsewhere, usually through biodiversity offsets. In contrast, a “Nature Positive” approach goes further: it explicitly seeks a measurable gain in biodiversity, ensuring that ecosystems are restored and enhanced over time. This distinction is crucial because only a nature positive framework directly addresses ecosystem recovery, rather than merely preventing further degradation. 

The Kunming-Montreal Global Biodiversity Framework (GBF), adopted by 196 countries in 2022, was the first international agreement to embed the Nature Positive vision, setting the direction for biodiversity policy and finance over the next decade. This ambition has since been reinforced by coalitions such as the Nature Positive Initiative and Oxford’s Nature Positive Hub and is increasingly reflected in national biodiversity targets such as National Biodiversity Strategies and Actions Plans (NBSAPS), corporate sustainability strategies and financial disclosure frameworks.  

How can we finance the Nature Positive Agenda? 

Achieving Nature Positive goals requires more than political and private sector ambition – it also demands a significant increase in funding. In 2019, the gap between what is currently spent on biodiversity conservation and what is needed, referred to as ‘the biodiversity financing gap’, was estimated to be in the range of $598 – 824 billion per year. To close this gap, there is a growing need for innovative mechanisms that can channel capital into measurable conservation outcomes. Nature markets – such as carbon and biodiversity markets – are rapidly gaining traction. 

While carbon markets have mobilised some of the necessary finance for climate mitigation, they have often done so in ways that undervalue biodiversity and wider ecosystem health. For example, large-scale monoculture forestry plantations can generate carbon credits but may harm species richness, water systems and local livelihoods. This has created growing recognition that tackling the climate crisis in isolation is insufficient: climate stability ultimately depends on resilient ecosystems and thriving biodiversity. Moreover, many investors have lost trust in carbon markets – largely because they often fail to deliver real, verifiable climate impact. 

Unlike carbon markets, biodiversity credits aligned with the Nature Positive Agenda are designed around measurable gains in ecosystems, rather than just compensating for harm. Nature-positive schemes require that any loss is more than offset by actual restoration or enhancement of habitats, ensuring that biodiversity increases over time. While carbon, with its single metric, is easier to measure, biodiversity credits hold greater potential: by valuing ecosystems as a whole rather than one component, they are more likely to deliver genuine environmental outcomes and, in turn, generate stronger long-term returns. In this way, they align with the global ambition to deliver a Nature Positive future. 

What is driving interest in biodiversity credits? 

Although still in their infancy, biodiversity credit markets are gaining traction. This has recently been signalled by the European Commission, which has formally endorsed the potential of biodiversity credits in its Roadmap Towards Nature Credits, laying the foundation for an EU-wide voluntary market. International policy frameworks, including Target 19(d) of the Global Biodiversity Framework, also support the development of such mechanisms. In parallel, civil society actors like the World Economic Forum, emerging platforms such as the International Advisory Panel on Biodiversity Credits and standards like Plan Vivo’s Nature Standard are working to build the transparency, consistency and credibility needed to scale these markets responsibly. 

Despite growing interest, the global biodiversity credit market remains small and underdeveloped, with an estimated value of just $8 million in 2023 – a tiny fraction of what is needed. While its nascency partly explains the slow uptake, limited buyer confidence also poses a major barrier. This is driven by inconsistent methodologies, the absence of clear standards and guidance and lingering concerns stemming from credibility issues in the carbon market.  

Marine biodiversity credit markets, in particular, are virtually non-existent, due to both the technical complexity of measuring marine ecological outcomes and the lack of established frameworks tailored to ocean ecosystems.  

Mitigating challenges and concerns 

Significant uncertainty remains around whether biodiversity credits can fully deliver on their promises, how transparent and credible they are, where demand will come from and whether they can scale effectively. Additional concerns include the potential for credits to divert government funding from conservation and whether they are feasible in the marine environment given the challenges of monitoring complex ecosystems. We address these issues below: 

1. Research has shown that many nature credit schemes – both carbon and biodiversity – are not delivering what they promise. This includes exaggerating how much nature is actually being restored or claiming credit for recovery that would have happened anyway.   

These concerns need to be taken seriously. This is why we support the development of high-integrity biodiversity credits. What constitutes a ‘high-integrity’ credit is well established, drawing on over three decades of academic research and lessons learnt from carbon markets.  

Together with Plan Vivo Foundation, we have defined ‘high-integrity’ based on three core principles for ensuring impact claims are realistic, transparent and quantifiable11: 

• Clear communication on the biodiversity assessment methodology and impact is crucial, including transparent measurement reporting and verification processes: To maintain and uphold a high-integrity market, credits should be evidence based and third-party validated and verified and the impact on biodiversity and the associated benefits (carbon, communities) have to be communicated. 

• There must be integrated community engagement and participation: Indigenous Peoples and Local Communities should not only benefit financially from biodiversity credit projects, but be integrated in project development and delivery. 

• Credits should be priced fairly, and benefits should be shared equitably: Prices should adequately cover project costs and additional revenues should be distributed equitably between local communities and project partners. 

At Blue Marine, we are piloting the development of some of the first high-integrity, marine ‘Nature Positive’ biodiversity credits through the Solent Seascape Project, a multi-habitat restoration initiative. By grounding this project in robust science, transparent governance, local community engagement and certified by Plan Vivo Foundation, we aim to demonstrate proof of concept that high-integrity credits can accelerate private investment into locally-led conservation while generating measurable benefits for nature, people and climate. 

2. Without clear regulatory drivers or mandated purchase obligations, it’s unclear why a private investor would commit capital, especially when there is limited evidence that such investments can consistently deliver the returns typically required to justify private finance at scale. 

In the marine realm, where no mandatory market yet exists, uptake at present depends on voluntary frameworks, corporate sustainability commitments and risk management tools (read our factsheets for a deeper dive on these drivers). Despite the absence of legal obligations, well-designed, high-integrity voluntary biodiversity credits still offer a compelling pathway for investors and companies. They translate sustainability commitments into measurable outcomes, allowing firms to manage nature and climate risks, generate tangible environmental and social benefits, and enhance their reputation in a market where environmental responsibility increasingly influences consumer and investor decisions. Rising corporate risk exposure, coupled with frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), means that even voluntary markets can create credible financial incentives for private investment. 

That said, proof-of-concept voluntary markets have limits. While they can demonstrate feasibility and attract early adopters, durable, large-scale demand will require regulatory drivers – for example, mandatory reporting (e.g. the Corporate Sustainability Reporting Directive), compliance obligations (e.g. the UK’s Biodiversity Net Gain scheme) or fiscal incentives (e.g. tax breaks for investing in high-integrity credits).  

In the long-term, biodiversity credits should aim to evolve from a voluntary, reputational tool into a compliance pathway, unlocking predictable, scalable private finance for conservation while ensuring measurable benefits for nature and society. 

3. Governments might prioritise investing in developing nature markets over directly funding conservation efforts, potentially diverting critical public resources away from on-the-ground nature restoration. 

For this reason, it is essential that biodiversity credits serve as a catalyst rather than a substitute for public investment. As highlighted above, biodiversity credit markets have the potential to unlock significant private capital and demonstrate innovative financing models that can complement existing funding. However, their success depends on strong public oversight, clear policy frameworks and robust standards to ensure that credits deliver genuine, measurable biodiversity gains without allowing governments to reduce their own conservation budgets. 

In this way, biodiversity credits can act as an accelerator, mobilising additional resources and driving innovation, while governments maintain and increase their direct commitments to nature. Civil society and NGOs have a critical role to play in pushing for these enabling conditions by advocating for policy reform, shaping standards and ensuring that the design of biodiversity credit markets remains rooted in scientific integrity, social equity and environmental impact. 

4. Developing high-integrity biodiversity credit schemes is often seen as too complex, costly and resource-intensive – especially in marine environments.  

Monitoring marine biodiversity is challenging due visibility issues, dynamic currents and tides and interconnected ecosystems that complicate outcome attribution and requires costly specialist equipment as well as a high level of expertise. However, this complexity can be mitigated by anchoring credits in locally-led conservation efforts and leveraging digital tools such as machine learning and satellite imagery to streamline third-party verification and reduce costs.  

In line with Fauna and Flora, we believe that local people and organisations are best placed to identify, implement and sustain the most cost-effective conservation actions. These actors should be equipped, funded and empowered to lead these projects. 

Leveraging existing relationships with local partners as well as tapping into established monitoring systems and volunteer networks can also dramatically lower the cost and complexity of developing new credit schemes. 

5. Marine projects that are small and locally-led are perceived as too limited or risky for big investors seeking to deploy larger amounts of capital and achieve more predictable returns. This has led to concerns that biodiversity credit schemes in the marine environment aren’t attractive enough to deliver nature recovery at scale.  

We believe the key to scaling small-scale marine biodiversity credit projects lies in making them investment-ready through effective de-risking. According to the World Bank, mechanisms such as blended finance structures, guarantees and concessional funding from public or philanthropic sources can absorb early-stage risk, improve project creditworthiness and enhance investor confidence. 

At the same time, aggregating smaller marine conservation efforts into larger, standardised portfolios with common methodologies and centralised monitoring frameworks – can reduce transaction costs, diversify risk and create investable opportunities at scale. 

Crucially, engaging the right buyers – from local sustainability-minded corporates who want to see the benefits of their investment to private sector actors committed to a Nature Positive approach – is key to building credible projects and ensuring lasting impact. 

Conclusion 

Biodiversity credits remain a nascent but promising market instrument. After decades of experimentation with carbon markets, we have learnt valuable lessons to guide their development. Unlike carbon, which relies on a single metric, biodiversity credits have the potential to value ecosystems holistically, delivering genuine long-term environmental outcomes. 

That being said, we are cautious not to present biodiversity credits as a silver bullet capable of single-handedly meeting the $598 – 824 billion annual funding gap needed for nature. However, we do believe they have a role to play in complementing public sector finance, particularly for local nature recovery projects. At Blue Marine, we believe that whether they become a silver bullet or snake oil hinges on the quality of supply and demand.  

On the supply side, credits must be grounded in rigorous science, transparent governance and equitable benefit-sharing. Without this, schemes risk repeating the failures of some carbon markets, commodifying nature without delivering real outcomes for ecosystems or local communities. On the demand side, voluntary commitments and reputational benefits alone are insufficient for the market to scale. Mandatory regulatory frameworks will be essential to stimulate investment and scale the market. In both cases, public policy plays a critical role in unlocking the market’s full potential. 

Lastly, it is important to give both nature and the market the time they need to mature. Prematurely dismissing biodiversity markets risks throwing the baby out with the bathwater – undermining the progress we have made in creating a mechanism that can deliver meaningful, long-term benefits for biodiversity and communities. 

For more information on Blue Marine’s high-integrity credit biodiversity credit pilot project, click here.