Tokenisation Opportunities in Voluntary Carbon Markets: A Sectoral Diagnostic

Voluntary carbon markets (VCMs) are growing rapidly but remain structurally fragmented due to verification delays, lifecycle opacity, inconsistent metadata, and capital mobilisation bottlenecks. While blockchain is often proposed as a digitalisation layer to improve transparency and traceability, this paper reframes tokenisation as a sector-aware financial infrastructure capturing the full lifecycle of carbon credits. Rather than treating it as a digital overlay, this study argues that tokenisation functions as a modular, automated architecture capable of absorbing sector-specific frictions within VCMs. Drawing on 1495 registry-compliant projects from the Berkeley Voluntary Offsets Database (BVOD v2025-06), the study develops the sector tokenisation opportunity matrix (STOM). This diagnostic framework maps registry-derived indicators—issuance volume, credit retirement ratio, and average credits per project—to three tokenisation functions: market expansion, retirement acceleration, and structuring for scale and fragmentation. STOM reveals how tokenisation can address VCM fragmentation by mobilising capital, reinforcing lifecycle integrity, and enabling assets to be packaged across diverse project types. By linking friction diagnostics to governance-sensitive infrastructure design, the research proposes a sector-aware blueprint for climate finance infrastructure and positions tokenisation as a strategic tool for scaling high-integrity climate action.