Three carbon credit standards obtain high-quality CCP labels, governance body says

Carbon crediting programs with only a 29% share of the market have so far met the criterion set out in its high-quality Core Carbon Principles labels, the Integrity Council for the Voluntary Carbon Market said April 5.

American Carbon Registry, Climate Action Reserve and Gold Standard have been approved as CCP-eligible programs, according to the independent governance body.

ICVCM, which is tasked with setting threshold standards for high-quality carbon credits, has come up with CCP labels and an assessment framework to help define high-integrity carbon offsets.

CCP-labeled credits are now on track to appear on the market once the ICVCM has approved methodologies used by CCP-eligible programs.

"By the end of September, we expect to have largely completed decisions covering more than 50% of credits in the market," the ICVCM said.

New chapter

But Verra, the world's largest issuer of carbon credits, has still to receive CCP-labels for credits under its Verified Carbon Standard program.

VCS is the world's most widely used carbon crediting program and is considered to be the core document that determines how Verra assesses carbon projects and issues credits. But like Verra, VCS has also come under sharp criticism in recent years, with several academics and media reports questioning the efficacy of the program's carbon offsets.

The ICVCM, however, said its board is expected to take decisions to other carbon crediting program such as Social Carbon, Isometric, Architecture for REDD+ Transactions and Verra's VCS by the end of April or at the latest in May.

"We're really looking to improve the market and improve both the governance of the programs as well as the methodologies," ICVCM chair Annette Nazareth told S&P Global Commodity Insights. "And it's going to be a continuous process. We're going to keep at this, keep improving, keep upgrading. Every two years, we expect to be looking at this and saying, is there a way that we can ratchet this up even more based on best science and best practice?"

These CCP-eligible programs will now be subject to the ICVCM's assurance and oversight functions to ensure that programs follow its high-integrity rules and properly monitor CCP labeling of carbon credits.

"We are launching a new chapter for the voluntary carbon market: The CCPs set a global benchmark for high-integrity, building trust, increasing standardization and making it easy for buyers to identify high-integrity carbon credits," Nazareth added.

Methodology approval

This comes as the ICVCM is in the midst of assessing not only carbon programs but also methodologies.

"CCP-labeled credits will start to appear on the market once we have approved methodologies used by CCP-eligible programs and the volume available will grow steadily over 2024," the ICVCM added. "By the end of September, we expect to have largely completed decisions covering more than 50% of credits in the market."

So far, more than 100 methodologies have been grouped into 29 categories for assessment.

The ICVCM said only 6.1% of credits will be fast-tracked and assessed internally.

These cover categories that include projects related to methane from mines and landfill sites, detecting and repairing leaks in gas systems, and destroying chemicals that damage the ozone layer.

But project types, or categories, covering 45.2% of credits in the market will be assessed by multi-stakeholder working groups because they raise "complex issues." These include renewable energy, efficient cookstoves, improved forest management and REDD+ projects.

Meanwhile, 1.6% of credits in the market, including new natural gas power, waste heat recovery and industrial energy efficiency, "are considered unlikely to meet criteria in the CCP rulebook and will only be assessed once other assessments are complete," the ICVCM added.