Credit Retirement

What is credit retirement?

Credit retirement is the act of permanently removing environmental credits from circulation to claim the offset they represent. When a Tokenized Recycling Credit (TRC) or Tokenized Carbon Credit (TCC) is retired, the credit is permanently destroyed on the public registry and can never be re-sold, re-used, or double-counted.

Retirement is what transforms a tradeable financial asset into a permanent environmental claim. Until credits are retired, they represent available inventory. After retirement, they represent claimed impact — recorded permanently on the network's public registry and viewable through the Carrot Registry or any public on-chain explorer.

Two retirement paths

The registry contracts support two methods for retiring credits. Today every purchase uses integrated retirement; standalone retirement is not yet offered through a Carrot interface.

Standalone retirement

The registry contracts support retiring credits held against a buyer's balance at any time after purchase — useful for buyers that acquire credits in advance and retire them according to their own reporting schedules.

1. The retirement order — naming the certificates and the amounts to retire — is signed by a key registered on the registry contracts as an authorized signer, and any relayer can then submit it. Authorization comes from that signature, not from the holder's own wallet.
2. The credits are permanently destroyed from the Vault's custodial balance. The contracts keep no per-holder balance: the authorized signature vouches for the holder's entitlement, and each certificate caps retirement at the amount purchased from it. Credits already delivered to an external account must be returned to the Vault first.
3. The backing certificate's retirement amount is updated.
4. A Credit Retirement Receipt is recorded as permanent proof.
5. The retirement is recorded on the public registry.

Integrated retirement

Credits are purchased and retired in a single atomic transaction. This is how every purchase is delivered today.

1. A purchase order is signed by a key registered on the registry contracts as an authorized signer. The order carries a retirement amount for each certificate allocation, plus retirement metadata (beneficiary, receipt id, metadata URI). The amounts are what retire credits and how much: where they are positive, that portion is burned and the retirement receipt is recorded; the metadata identifies that receipt.
2. USDC payment is transferred to the RewardsVault for rewards distribution.
3. Credits are destroyed directly from the Vault — they never pass through the buyer's account. The contracts can also retire only part of a purchase and transfer the remainder from the Vault to the buyer; today every purchase is retired in full, so no remainder is transferred.
4. Both a Credit Purchase Receipt and a Credit Retirement Receipt are recorded in the same transaction.
5. The retirement is recorded on the public registry.

Integrated retirement is currently the only retirement path in use. It simplifies the process and reduces the number of transactions.

The retirement receipt

Every retirement produces a CreditRetirementReceipt — a permanent, non-transferable record that serves as public proof. Its published metadata records:

• Credit type — Whether TRC (e.g. C-BIOW) or TCC (e.g. C-CARB.CH4) was retired
• Amount — The quantity of credits retired (in metric tons)
• Credit holder — The account address the retired credits were held against
• Beneficiary — The identifier of the party the retirement is claimed for, published as a hash rather than a name. Today the beneficiary is always the buyer
• Date — When the buyer's payment was confirmed. The moment of retirement is the timestamp of the registry transaction that records the receipt
• Certificate references — Links to the backing certificates (GasID or RecycledID)
• MassID references — Links to the underlying waste batches

Because the receipt is non-transferable, it cannot be moved. It is permanently held by the Vault and remains publicly associated with the credit holder's account address and the beneficiary's identifier — and the retirement it records, the credits burned and the certificates behind them, cannot be undone.

Why retirement matters

Retirement solves a critical problem in environmental markets: double counting. In traditional carbon and recycling offset markets, the same credit can be sold multiple times or claimed by multiple parties because there is no definitive mechanism to mark a credit as used.

In the Carrot Network, retirement is irreversible. Destroyed credits cannot be recreated. Anyone can verify on a public block explorer (e.g. PolygonScan), without relying on Carrot, that the credits were destroyed and when. The receipt identifies the beneficiary by a hash, and Carrot can confirm to an auditor which buyer a hash designates. This makes Carrot credits suitable for regulatory compliance where auditability and non-duplication are mandatory.

EPR and ESG compliance

Retirement receipts are the primary evidence for regulatory and voluntary reporting:

• Extended Producer Responsibility (EPR) — Producers retire TRCs matching their waste footprint (e.g., 50 metric tons of TRCs from one certified material stream to offset 50 metric tons of that material placed on the market). Because credits inherit geographic traceability from MassIDs, retirements can satisfy location-specific mandates.
• ESG reporting — Organizations reference their retirement receipts in sustainability reports, demonstrating that commitments are backed by verified, permanently claimed recycling work.

Learn about purchasing credits · Learn about certificates · View the Registry