The concept of carbon credit arose out of increasing awareness of the need to reduce emissions of greenhouse gases to combat global warming which was formalized in the Kyoto protocol. In addition to contribution to sustainable development with energy recovery in the form of methane, carbon credits can be claimed by application of advanced anaerobic processes in wastewater treatment for reducing emissions of greenhouse gases. As anaerobic granular systems are capable of handling high organic loadings concomitant with high strength wastewater and short hydraulic retention time, they could render much more carbon credits than other conventional anaerobic systems. This study investigated the potential carbon credit derived from laboratory-scale upflow anaerobic sludge blanket (UASB) reactors based on a carbon balance analysis. Methane emission reduction could be calculated by calculating the difference of UASB reactors and open lagoon treatment systems. Based on the 2.5 l bench-scale reactor, the total CH(4) emissions reduction was calculated as 29 kg CO(2)/year. On scaling up to a typical full-scale anaerobic digester, the total CH(4) emissions reduction could achieve 46,420 tons CO(2) reduction/year. The estimated carbon credits would amount to 278,500 US$ per year by assuming a carbon price of 6 US$ per metric ton CO(2) reduction. The analysis postulated that it is financially viable to invest in advanced anaerobic granular treatment system from the revenue generated from carbon credits. (C) 2008 Elsevier Ltd. All rights reserved.