Certification of carbon offset projects
Carbon neutrality means that as many greenhouse gases (GHGs) as are emitted are absorbed by carbon sinks (oceans, photosynthesis (forests), atmosphere). Respecting the absorption capacity of these carbon sinks requires a drastic reduction in greenhouse gas emissions.
The first step in this reduction is to carry out a GHG assessment, or Bilan Carbone®, which quantifies an organization's emissions over a year and identifies the main emission sources. Sometimes, certain emissions are impossible to quantify. In such cases, the organization can turn to carbon offsetting(as a last resort).
1. Carbon offsetting: financing a certified project.
1.2 To be distinguished from patronage or sponsorship
2.1 What is a carbon offset label?
2.2. Criteria for carbon offset projects
Carbon offsetting: financing a certified project.
❌Compensate, not reduce.
Carbon offsetting refers to the financing of a project aimed at reducing greenhouse gas emissions, or sequestering carbon. By financing such a project, an organization or individual can offset its GHG emissions to the extent of its financing. In this way, the financier does not directly reduce his or her own emissions, but helps finance the overall reduction of GHG emissions into the atmosphere.
Offsetting is based on the principle that a quantity of GHG emitted has the same impact wherever it is emitted. In theory, therefore, reducing emissions at home, or enabling a reduction elsewhere, has the same ultimate benefit on the concentration of greenhouse gases in the atmosphere.
This compensation does not constitute a right to pollute. Offsetting emissions does not reduce their impact. However, it can help when certain emissions cannot be reduced.
In practical terms, the financer buys carbon credits linked to a certified project. These credits are certificates of reduced GHG emissions or sequestered carbon, calculated in CO2 equivalent. There are several types of certificate, depending on the nature of the emissions (reduced/sequestered carbon), and whether they are verified before or after purchase.
💰 To be distinguished from patronage or sponsorship
A carbon credit can only be attached to a certified project, which is the subject of this article. Other types of non-certified project exist, but are referred to as patronage or sponsorship. Patronage enables the financing of projects carried out by public-interest organizations, and is tax-deductible. Sponsorship, on the other hand, is funding granted to projects in exchange for something in return, particularly in terms of communication. It is not tax-deductible.
In addition to these administrative differences, as sponsorship projects are not certified, they do not allow very precise monitoring of their impact on GHG emissions, unlike certified projects.
📃Examples ofprojects
The five main types of carbon offset project, according to ADEME, are projects that enable :
- The development of renewable energies.
- Reducing GHG emissions from waste (particularly methane emissions from landfills)
- Good forest and soil management
- Renewal of household equipment (more energy-efficient).
- Improving the energy efficiency of buildings.
There are also other types of project in the agricultural, transport and industrial sectors.
Certification
📜What is a carbon offset label?
A label, or carbon offset standard, certifies that the project in question complies with certain criteria and methodologies for measuring the reduction of greenhouse gas emissions or carbon sequestration, depending on the project in question. The aim of these labels is to provide a framework for projects by imposing criteria that must be met, particularly in terms of the transparency of the credits traded.
🎯Carbonoffset project criteria
To qualify as a carbon offset project and obtain credits for sale, the project must meet 5 criteria:
- Additionality : the project must be financed at least in part by the sale of carbon credits, in addition to other financing(carbon offset subsidies, for example).
- Measurability : GHG emissions reduced or sequestered must be measured and monitored using internationally or nationally recognized methodologies.
- Permanence : The project must have a permanent impact on GHG emissions and not displace these emissions over time.
- Uniqueness : The same carbon credit cannot be sold to two different entities.
- Transparency and verifiability : The process of obtaining the label includes full verification by external parties and transparent credit monitoring.
🔜Thelabeling process
If a project complies with these criteria, then it can begin a labeling process, which certifies not only compliance with the above criteria, but also compliance with international methodologies for measuring and tracking reduced/sequestered emissions.
The project must pass through 6 mandatory stages:
- A description of the project by its promoter.
- Review of the project by the stakeholders, for presentation to the certification body.
- Setting up and monitoring the project.
- Verification that the methodology is being followed by external players.
- Credit certification, once benefits have been verified.
- Marketing the credits generated by the project. In theory, a credit can only be sold once it has been verified and recognized; however, to ensure the financial security of the project, some players sell credits before they have been certified. In this case, the financier who has made a commitment prior to certification assumes the risk that the credit will not be certified in the end.
Once these steps have been completed, the project can be certified.
📑Thevarious existing labels.
Before presenting the various existing labels (or standards), we need to differentiate between two carbon offset markets:
- The regulatory market, created in the wake of the Kyoto Protocol (1997), on which governments and companies subject to greenhouse gas emission reduction obligations operate.
- The voluntary market, developed in parallel with the regulatory market, in which individuals and companies voluntarily offset their emissions.
There are two types of label: Kyoto certification, and voluntary labels.
⛩️LaKyoto certification
This certification only applies to CDM (Clean Development Mechanism) and JI (Joint Implementation) projects, two mechanisms created by the Kyoto Protocol. CDMs are set up in developing countries, while JI projects are implemented in countries that have ratified Annex I of the Kyoto Protocol.
The carbon credits associated with these projects are certified by the UN.
👋Voluntary standards
As carbon credits traded on the voluntary market are not necessarily subject to certification, voluntary labels have been created to enable these credits to be certified and to compensate for the lack of credibility and transparency of the voluntary market. This is how certified projects are distinguished from the sponsorship projects mentioned above.
The most popular international standards include :
- The Gold Standard
- Verra (formerly Voluntary Carbon Standard
- The REDD+ program
These standards have the advantage of offering a greater diversity of projects, lower costs and shorter lead times. However, the methodology for monitoring and measuring reduced or sequestered emissions differs from one label to another, and it is up to the financer to verify the credibility of the label purchased. Other less widely used labels are :
- The American Carbon Registry
- The Climate Action Reserve
- The Vivo Plan
🇫🇷Le "Low-Carbon" label
The "Bas-Carbone" label is a French label, developed by the French Ministry of Ecological Transition in 2018 at the growing request ofFrench carbon offset players, wanting to reduce emissions on the national territory.
Like other existing labels, its aim is to certify the quality and impact of submitted projects. It applies to all projects in sectors not covered by European regulations, for projects taking place in France.
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