Renewable energy carbon credits not eligible for CCP

Market: Emissions
06/08/24

The integrity council for the voluntary carbon market (ICVCM), a non-profit governance body, said carbon credits from renewable energy projects will not be eligible for its core carbon principles (CCPs).

Renewable energy credits issued under eight current carbon methodologies "fail to meet the CCP Assessment Framework requirements on additionality because they are insufficiently rigorous in assessing whether the projects would have gone ahead without the incentive of carbon credit revenues," the ICVCM said.

This move automatically excludes 236mn unretired credits or around a third of the supply within the voluntary carbon market. The ICVCM also rejected a methodology for projects reducing the release of sulphur hexafluoride (SF6), also because of weak additionality components. This refers to the methodology AM0065 under Verra's carbon crediting programme, which currently only covers one project in the US for a total of 2.64mn credits issued, of which just 185,000 are unretired.

ICVCM's decision only covers current renewable energy methodologies and does not exclude the possibility of reviewing more rigorous approaches. "Renewable energy projects financed by carbon credits still have a role to play in the decarbonisation of energy grids... more robust methodologies would unlock finance for a new wave of renewable energy projects in places where they are most needed ," ICVCM chair Annette Nazareth said. This refers to renewable energy projects set up in countries with financial and legislative barriers, probably including most of the UN least developed countries (LDCs).

The ICVCM has also approved a new methodology — Verra's AM0023 — covering methane leaks, mainly in Bangladesh and Uzbekistan, which accounts for 19mn unretired credits, taking the total of unretired credits eligible for CCPs to 27mn or 3.6pc of the supply in the voluntary carbon market.

Assessments of key carbon methodologies such as improved forest management (IFM) or afforestation, reforestation and revegetation (ARR) are now concluded and the council's board is expected to make final decisions "soon", the ICVCM said. Assessments of other popular credits such as reducing emissions from deforestation and forest degradation (REDD+) or clean cookstoves are due within the coming months.

By Nicola De Sanctis

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