Development and procurement of carbon credits
Towards carbon neutrality in 2050
Currently, governments and corporates around the world are accelerating their decarbonization efforts to achieve ‘net zero’. In order to minimize the damage of the climate crisis, it is important to limit the increase in the global average temperature to 1.5 degrees above pre-industrial levels. This “1.5 degree target” has become a global target. In order to achieve the 1.5 degree target, it is necessary to halve global CO2 emissions by 2030 and reduce them to net zero by 2050. To achieve this goal, companies are required to actively decarbonize.
Green and Blue Planet Solutions provides carbon project development in domestic and international voluntary carbon programs. For inquiries about carbon project development, please contact us here.
| Mandatory carbon market | Voluntary carbon market | |
|---|---|---|
| Managed by the United Nations | Managed by country/region | Managed separately by a private organization |
| CDM | JCM (Japan), Klik (Switzerland), etc. | Verified Carbon Standard (VERRA, USA), The Gold Standard (Gold Standard Secretariat, Switzerland), etc. |
What are carbon credits?
Carbon credits (sometimes called carbon offsets) are the reductions or removal of carbon dioxide or other greenhouse gases such as CO2 (This is a mechanism to issue the amount of reduction and absorption of the Greenhouse Gases or GHGs) as a credit and hence can be traded as an environmental product. Additionally, carbon credit is traded in units of tons of CO2 equivalent.
There are two main markets of carbon offset credits: mandatory and voluntary carbon programs. Mandatory schemes are those managed by international organizations and national governments, such as the Clean Development Mechanism (CDM) implemented under the Kyoto Protocol and the Joint Crediting Mechanism (JCM) promoted by the Japanese government, etc. Voluntary carbon programs, run by private organizations such as NPOs, have received particular attention recently.
What is the difference between “Carbon Credits” and “Renewable Energy Certificates (RECs)”?
“Renewable Energy Certificate (REC)” is a power supply tracking system that promotes and expands renewable energy by converting the environmental attributes of green electricity generated from renewable energy such as wind power, solar power, and biomass into a certificate and trading it. On the other hand, “Carbon Credits” are a form of tradeable greenhouse gas emission reduction effects resulting from projects such as forest protection, energy-saving technology, and the introduction of renewable energy. Its goal is to reduce greenhouse gases (GHGs).
| Main differences | Renewable Energy Certificate (REC) | Carbon Credit |
|---|---|---|
| Unit | Electricity conversion: megawatt hour (MWh) | Carbon dioxide equivalent: tonCO2 |
| Origin | Renewable energy generators | Projects that contribute to the reduction of greenhouse gas emissions |
| Purpose of use | To reduce Scope 2 emissions by procuring green power certificates | To offset Scope 1, 2 and 3 emissions by procuring carbon credits |
| Consumer claim | Use of renewable electricity from a renewable source | Reduction of greenhouse gas emissions as an organization |
| Verification of additionality upon issuance | None | Yes |
| Geographic requirements for use | Yes | None |
| Time-bound (vintage) | Yes | No principle |
What are voluntary carbon credits?
Voluntary credits are credits that are more and more widely used in the world. These credits are issued from projects led by the private sector, such as NGOs and companies, unlike systems led by the United Nations or the government sector. In addition to voluntary carbon offsets by companies, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) also allows the use of voluntary carbon credits that meet global standards.
| Program name | Management body | Unit of credit | Overview |
|---|---|---|---|
| Verified Carbon Standard (VCS) | Verra (United States) | Verified Carbon Unit (VCU) | It is the largest private sector program in terms of both credit creation and transaction volume. A variety of projects from all over the world are registered. |
| The Gold Standard (GS) | Gold Standard Secretariat (Switzerland) | Verified Emission Reduction (VER) | A program established by the World Wildlife Fund (WWF) and others, focuses on generating high-quality credits from sustainable projects. |
| American Carbon Registry | Winrock International (United States) | Emission Reduction Tonne (ERT) | The world’s first private credit system established by Winrock International in 1996. |
| Climate Action Reserve (CAR) | Climate Action Reserve (United States) | Climate Reserve Tonne (CRT) | This program, whose predecessor was the California Climate Action Registry, established by the State of California in the United States in 2001, targets North America and Mexico. |
| Global Carbon Council (GCC) | Gulf Organisation for Research & Development (GORD, Qatar) | Approved Carbon Credit (ACC) | An emerging program from the Middle East established with an eye on aviation sector (CORSIA). |
What are the good quality carbon credits?
In March 2023, the Integrity Council for the Voluntary Carbon Market (ICVCM) released the Core Carbon Principles (CCPs), which are principles for credit quality. These principles will be increasingly emphasized in evaluating the quality of carbon credits.
Followings are the 10 principles set by the CCPs
A) Governance
- Effective governance
- Tracking
- Transparency
- Robust independent third-party validation and verification
B) Emissions impact
- Additionality
- Permanence
- Robust quantification of emission reductions and removals
- No double counting
C) Sustainable development
- Benefits and safeguards for sustainable development
- Contribution towards transition to net zero
Our Service
[Creation of credits from decarbonization projects]
We are developing a carbon project to create voluntary credits from decarbonization projects on the international carbon registry.
- Does our decarbonization project meet the eligibility requirements for registration?
- Which carbon program should I aim to apply for?
- Which is better, renewable energy certificates or carbon credits?
We are happy to develop your carbon project on the international GHG programs. If you are considering applying for project registration, please contact us here.
[Procurement, purchase and use of credits]
Please contact us here for consultations and cost estimates regarding the procurement, purchase, and use of credits.