What are Carbon Offsets?
A carbon “offset” or “credit” is the verified avoidance or capture of one metric ton of carbon dioxide (usually denoted as mtCO2) from the atmosphere. Under a verifying body, the emission reduction is certified under a number of criteria and each metric ton is assigned a credit ID number corresponding to the verification body. Once claimed, the credit is retired in the public registry, ensuring that each reduction can only be claimed once. When purchasing an offset, you are purchasing a specific credit ID number and the right to retire/claim its associated reduction.
Chyulu Hills, Kenya - An Everland Project
Verra’s Verified Carbon Standard (VCS) is one of the largest verifiers of carbon credits and public registries.
Who typically certifies a carbon offset?
There are many verifying bodies out there, but they most common standards for voluntary projects are Verra (Verified Carbon Standard or VCS), Climate Action Reserve (CAR), American Carbon Registry (ACR) and Gold Standard (GS). Each of these standards are CORSIA-approved, but may have certain geographic or project focus. CAR and ACR primarily cover projects in North America while Verra and Gold Standard have additional certifications and represent projects more globally. Verra will typically have more forestry and US projects, while Gold Standard may focus on smaller international projects.
One of the newest CORSIA-approved standard is called the Global Carbon Council framework (GCC) which focuses on projects based in the Middle East. Each framework has its own methodologies that a carbon offset project needs to meet in order verify viability, though there may be some overlap between standards. Typically, project developers will decide which standard is most applicable for them.
How does a credit get certified?
Projects need to go through verification regularly to prove the reductions are real and that the credits meet stringent offset criteria. Each credit needs to verified as meeting what is called the “PAVER” checklist:
Permanent (will not revert or be released later on)
Additional (compared to business as usual, this reduction would not have happened without the project)
Verifiable
Enforceable, and
Real
Credits can only be generated if they meet these criteria as well as criteria specific to the methodology they are being created under. These standards all have public registries that issue the credits, listing all reports associated with a project publicly. Public registries allow for issuance, transfer, and retirement of carbon credits and are open source to all. Offsets are offered by national verification standards and non-verified sources, but be wary of the authenticity and regulatory implications of using credits not from a global verifying or CORSIA-approved standard.
How does a credit get claimed?
A credit gets “retired” when it is claimed. This is done in the public registries associated with each verifying standard. Ensuring these retirements are done publicly prevents double counting and provides transparency to the claiming process. In order to retire, they need to be done through an account on the specific registry. Typically anyone can register, though each has an annual fee for maintaining the registry. Once retired, a retirement cannot be undone, but represents a publicly-verifiable way of seeing that a carbon offset was retired and thus claimed.
What are typical projects?
There are hundreds of different CO2-reducing or greenhouse gas (GHG) reducing projects ranging across different geographies, categories, and ultimately price. Reductions in GHGs can be counted as a carbon offset. Emissions are converted into a CO2-equivalent amount before becoming verified as an offset, which are usually denoted as mtCO2e or mtCO2-e, “metric ton of carbon dioxide equivalent”). Reducing a metric ton of carbon can be achieved by sequestering carbon from the air in the soil, or building renewable energy power plants, or manufacturing and transportation efficiencies. All of these contribute to lowering the emissions within the categories of some of the largest contributors to human induced climate change.
Other considerations
Offset projects are often chosen by geography because they are close to home or operations like the Montague wind farm in Oregon that powers Apple’s data center or Dallas Fort Worth airport’s choice to fund wind and offsets within Texas. Projects can improve socio-economic conditions for communities and make contributions to achieving UN’s Sustainable Development Goals (SDGs) like local health and education. Additional consideration should be given for corporate ESG compliance with reporting standards (like CDP or Science Based Targets), and regulatory requirements (like CORSIA). Using offsets for compliance with CORSIA has certain requirements for the years (“vintages”) and types of offsets eligible to be claimed, so make sure chosen credits meet any requirements before purchasing for compliance.
Knowing the questions to ask and the additional goals you want to achieve help choose projects that not only meet stringent standards but communicate your commitment. Working with trusted partners enhances understanding around the carbon market landscape and can ensure a successful program and compliance with future requirements.
4AIR is happy to assist with exploring carbon offset opportunities and learning more about the process. Offset with 4AIR - Contact Us >
