News follows U.S. government recognition of role high-integrity voluntary carbon market can play in financing climate action
Published 6 June 2024
The Integrity Council for the Voluntary Carbon Market today announced the first carbon-crediting methodologies that meet its high-integrity Core Carbon Principles (CCPs).
In the third of an ongoing series of assessment decisions, the Integrity Council approved seven carbon crediting methodologies. This means that the high-integrity CCP label can now be used on an estimated 27 million carbon credits generated by projects that tackle potent greenhouse gases by capturing methane from landfill sites and by destroying ozone-depleting foams and refrigerant gases from discarded equipment such as refrigerators and air conditioners.
Organizations
Another 27 categories of carbon credits, representing over 50% of the market, remain under active assessment. In addition, certain other methodologies addressing landfill gas (covering an estimated 76 million more issued credits) and ozone-depleting substances (ODS, covering an estimated 4 million more issued credits) are still being assessed.
Multi-stakeholder assessments of some of the most popular types of carbon credits – REDD+ (Reducing Emissions from Deforestation and Forest Degradation), Jurisdictional REDD (JREDD and clean cookstoves are also underway and due to be completed in the coming months.
The Integrity Council publishes the results of its assessment decisions as they are reached by the Governing Board. The sequence of announcements is due to a range of factors including the availability of information, staggered start times, expert availability and a variety of others, and does not represent any reflection on the relative integrity of different methodologies.
Annette Nazareth, Integrity Council Chair, said: “The Core Carbon Principles set a high bar for integrity and the CCP label is designed to help buyers identify carbon credits that meet our rigorous standards. We are delighted that the first credits can now be tagged with the CCP label – they are generated by projects that capture potent greenhouse gases which are essential to deliver an “emergency brake” on warming in the near term. Governments increasingly recognise that a high-integrity VCM can play a key role in scaling up private sector finance for high-quality projects to reduce emissions and remove carbon from the atmosphere.
“This is just the beginning. We will be announcing further categories eligible for CCP-labels that meet our criteria as we continue our careful and thorough evaluation of the submitted crediting methodologies and properly consider complex issues with our expert stakeholders.”
Today’s announcement follows the U.S. Government’s publication last week of principles for high-integrity carbon credits which are closely aligned with the CCPs. Secretary Yellen’s statement highlighted the potential for a high-integrity voluntary carbon market to support “significant decarbonisation”, directly referencing the work of the Integrity Council and the Voluntary Carbon Markets Integrity initiative (VCMI) to raise standards in the supply and use of carbon credits.
Under the Integrity Council’s “two-tick” process, carbon credits can only be tagged with the CCP label if the carbon-crediting program is approved as “CCP-Eligible” and the projects that generate the credits use methodologies that are also “CCP-Approved”. ACR, Climate Action Reserve (CAR), Gold Standard and Verra (VCS) are all CCP-Eligible and will now be able to apply the CCP label only to carbon credits generated by projects that are issued under an Integrity Council approved methodology.
The CCP-approved status of credits will be visible to buyers in the programs’ registries in due course. Marketplaces, like exchanges, are likely to start bundling CCP-labelled credits for sale during the course of the year.
The CCPs establish a global benchmark for high-integrity carbon credits. They are designed to build trust in the voluntary carbon market, ensure comparability of credits, and enable the market to maximise its potential to tackle rising greenhouse gas emissions and unlock significant private finance for climate solutions. The CCP label will give assurance that credits each represent a tonne of emissions reduced or removed from the atmosphere. It also indicates that credits from new projects have robust social and environmental safeguards and deliver positive sustainable development impacts.
The Integrity Council’s work to establish a global benchmark for the supply of high-integrity carbon credits is complemented by VCMI’s work to ensure integrity in the way they are used. Its Claims Code of Practice sets out guidance for companies making net zero claims on credible ways to support that action through the use of carbon credits. The Claims Code requires that any carbon credits used must be CCP-Approved.
In a joint statement commenting on the U.S. Government’s principles, Michael Bloomberg, UN Special Envoy on Climate Ambition and Solutions, Mark Carney, UN Special Envory on Climate Action and Finance, and Mary Schapiro, Head of the Secretariat for the Task Force on Climate-related Financial Disclosures, called on governments to build on the work of the Integrity Council and VCMI.
They said: “Policymakers should adopt common supply, demand, market, and social integrity standards. This work should leverage the Integrity Council for the Voluntary Carbon Market (ICVCM) supply-side standards and labelling, which several countries are already considering backing.”
Assessment Decisions
The Integrity Council has grouped a first batch of more than 100 methodologies into 29 categories for assessment.
It has approved versions of three methodologies for projects that destroy stockpiles of Ozone Depleting Substances (ODS), covering an estimated 12 million carbon credits that have been generated by projects that collect and destroy refrigerant gases and foams from discarded equipment which, depending on the chemical, can be between 725 and 14,400 times more harmful than CO2.
- ACR’s Destruction of ODS from International Sources version 1.0
- CAR’s Article 5 Ozone Depleting Substances Project Protocol versions 1-2
- CAR’s U.S. Ozone Depleting Substances Project Protocol versions 1-2
The Integrity Council has also approved four methodologies for Landfill Gas (LFG) projects that meet certain conditions1 covering an estimated 15 million carbon credits generated by projects that capture methane from landfill sites. Tonne for tonne, methane is 28 times more powerful a greenhouse gas than CO2 over a 100-year timeframe and 81 times more harmful over a 20-year timeframe.
- ACM0001 – Flaring or use of Landfill Gas versions 15-19, used by Verra and Gold Standard
- AMS iii G – Landfill Methane Recovery version 10, used by Verra and Gold Standard
- ACR’s Landfill Gas Destruction and Beneficial Use Projects version 1-2
- CAR’s US Landfill Protocol version 6
Amy Merrill, Integrity Council Interim COO, said: “We are focused on identifying carbon credits which meet the high-integrity CCP criteria, but many methodologies under assessment are not expected to meet the threshold and will be rejected by the Governing Board. We are committed to due process as set out in our Assessment Procedure which gives programs the right to submit further information and request a hearing where a methodology may be rejected. That means it is a longer process to reach a Governing Board decision to reject a methodology than to approve one.”
Pedro Martins Barata, Co-Chair of the Integrity Council Expert Panel, said: “These first assessments of carbon-crediting methodologies raised complex issues that required detailed discussions, drawing on the expertise of our independent expert panel. Where that has been the case, the Board has included separate observations about the relevant category. These summarise some of the complexities identified, to help programs identify how they might evolve those methodologies at their next revision, as part of the Integrity Council’s commitment to continuous improvement.”
Carbon credits generated using CCP-Approved methodologies must ensure projects make a genuine impact on emissions. They must be permanent; measured robustly and conservatively using sound scientific methods; and verified by independent experts. Reductions and removals must be additional (i.e. they would not have occurred without the incentive created by carbon credit revenues. They must also support the transition to net zero and not lock-in fossil fuel emissions or technologies.
1ACM and AMS methodologies are approved where the following conditions are met:
- All LFG project types that do not generate electricity, and;
- LFG-to-electricity projects with a capacity of equal to or below 10 MWe.
Methodologies >10MWe remain under assessment.
CDM methodologies are being reviewed by the Article 6.4 supervisory body (known as PACM) and CCP-Eligible Programs will need to take account of the outcomes of that. process. The Integrity Council is assessing methodologies used by applicant and eligible carbon-crediting programs, including CDM methodologies.
Assessment of Carbon-Crediting Programs and Methodologies
The Integrity Council has approved five programs with a combined 98% market share as CCP-Eligible: ACR, ART, CAR, Gold Standard and VCS, operated by Verra, which have all updated some of their procedures to meet the high-integrity CCP criteria. It is continuing to assess Isometric, Puro.earth and Social Carbon. Other programs are welcome to apply and encouraged to do so.
The Integrity Council is separately assessing categories of carbon-crediting methodologies, using its internal experts and through Multi-Stakeholder Working Groups (MSWGs), and this work is expected to continue through the end of the year. The MSWGs began convening in January; the first three have now concluded and the fourth and fifth are underway. The sixth will begin in Q3 2024. They are addressing the following categories:
- MSWG 1 – Improved Forest Management.
- MSWG 2 – Sustainable Agriculture, Rice Cultivation Methane Avoidance, Nutrition / Nitrogen Management, Buffer Practices, and Afforestation, Reforestation and Revegetation (ARR).
- MSWG 3 – Renewable Energy.
- MSWG 4 – REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and Jurisdictional REDD (JREDD) methodologies for forestry projects at national or sub-national scale.
- MSWG 5 – Household Energy Demand, including clean cookstoves and household biodigesters.
- MSWG 6 – Biochar, tech-based CCS, industrial biodigesters and other clusters of methodologies that require more specialised review.
The Integrity Council is compiling and reviewing the findings of the first three MSWGs, and these categories of credits are expected to come to the Board for decision in the coming months.
The Integrity Council will publish decisions and make announcements after each month’s Board meeting. In line with its commitment to transparency it is regularly updating its website with the progress of assessments.
Overseeing the market
The Integrity Council’s approach to creating a high-integrity voluntary carbon market is modelled on that of a financial regulator. Its Core Carbon Principles and CCP Rulebook are the result of extensive consultation and set the rules of the market. It does not assess individual carbon-crediting projects, and CCP-Eligible programs will be responsible for correctly tagging credits with the CCP label.
CCP-Eligible programs will be subject to the Integrity Council’s assurance and oversight functions to ensure programs follow its high-integrity rules and properly monitor CCP-labelling of carbon credits. It will audit programs, make spot checks and respond to complaints. If it finds material failings it will, after following due process and in a transparent manner, be able to suspend or terminate the eligibility of the program or methodology.
The Integrity Council intends to improve and strengthen its Assessment Framework over time, based on experience, the latest science and technology, and new developments in the market. It has set up a series of expert Continuous Improvement Work Programmes which will study complex areas where it intends to raise ambition further in the next version of the CCP rules.
Ends.
NOTES FOR EDITORS
About the Integrity Council
The Integrity Council for the Voluntary Carbon Market (Integrity Council) is an independent, non-profit governance body for the voluntary carbon market, which aims to ensure the voluntary carbon market accelerates a just transition to 1.5°C.
The Integrity Council aims to set and maintain a voluntary global threshold standard for quality in the voluntary carbon market. The threshold standard is based on the Integrity Council’s Core Carbon Principles (CCPs) and is implemented through an Assessment Framework that sets out what high quality means by reference to those principles. The result is a threshold standard and label that provide a credible, rigorous, and readily accessible means of identifying high-quality carbon credits.
The latest details on ICVCM’s assessment decisions are available here: Assessment Status.
Landfill Gas Capture and Utilisation (LGF)
Landfills contain organic matter such as food and garden waste, paper, textiles and wood. When this decomposes without oxygen it generates both CO2 and methane. Methane is 81 times more harmful than CO2 for 20 years after it is released; over 100 years it is 28 times more harmful.
About 60% of global methane is generated by human activities. Waste is responsible for 15% of this anthropogenic methane.
Ozone Depleting Substances (ODS)
The Montreal Protocol (1986) phased out ODS globally but did not indicate what to do with existing ODS stores. Destruction of existing ODS is the only way to eliminate future emissions and has yet to be mandated in most countries.
ODS projects collect and destroy refrigerant gases from refrigerators, air conditioners, insulating foam and other discarded equipment. This equipment uses a range of CFC and HCFC gases which are between 725 and 14,400 times more harmful than CO2 over a 100-year period. They are destroyed by burning them at an approved facility.
CCP-Approved projects must go beyond legal requirements. Credits are delivered on destruction rather than annually.
Data disclaimer
Estimates on credit issuance are based on data from January 2024. Note that LFG estimates have a high degree of uncertainty because, for some projects, the version applied is not known, and some projects are ambiguous, using several versions across multiple crediting periods. These estimates do not replace the CCP tagging, which will be implemented by the respective programs.
The Core Carbon Principles
A. GOVERNANCE
Effective governance
The carbon-crediting program shall have effective program governance to ensure transparency, accountability, continuous improvement and the overall quality of carbon credits.
Tracking
The carbon-crediting program shall operate or make use of a registry to uniquely identify, record and track mitigation activities and carbon credits issued to ensure credits can be identified securely and unambiguously.
Transparency
The carbon-crediting program shall provide comprehensive and transparent information on all credited mitigation activities. The information shall be publicly available in electronic format and shall be accessible to non-specialised audiences, to enable scrutiny of mitigation activities.
Robust independent third-party validation and verification
The carbon-crediting program shall have program-level requirements for robust independent third-party validation and verification of mitigation activities.
B. EMISSIONS IMPACT
Additionality
The greenhouse gas (GHG) emission reductions or removals from the mitigation activity shall be additional, i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues.4
Permanence
The GHG emission reductions or removals from the mitigation activity shall be permanent or, where there is a risk of reversal, there shall be measures in place to address those risks and compensate reversals.
Robust quantification of emission reductions and removals
The GHG emission reductions or removals from the mitigation activity shall be robustly quantified, based on conservative approaches, completeness and sound scientific methods.
No double counting
The GHG emission reductions or removals from the mitigation activity shall not be double counted, i.e., they shall only be counted once towards achieving mitigation targets or goals. Double counting covers double issuance, double claiming, and double use.
C. SUSTAINABLE DEVELOPMENT
Sustainable development benefits and safeguards
The carbon-crediting program shall have clear guidance, tools and compliance procedures to ensure mitigation activities conform with or go beyond widely established industry best practices on social and environmental safeguards while delivering positive sustainable development impacts.
Contribution to net zero transition
The mitigation activity shall avoid locking-in levels of GHG emissions, technologies or carbon-intensive practices that are incompatible with the objective of achieving net zero GHG emissions by mid-century....
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