How carbon credits get to the voluntary market
Carbon credits, or verified emission reductions (VERs), or verified carbon units (VCUs) are essentially a reduction in greenhouse gas emissions from a project that is independently verified against a third-party certification standard. Each verified emission reduction represents one metric tonne of CO2.
There are internationally recognized organizations that audit and certify projects such as tree planting, sustainable farming or switching to green energy, document reduction in carbon dioxide emissions, and then issue carbon credits for the voluntary market.
Verification organizations typically have the following components:
Standard: These are the specific rules and science-based requirements that should be met by a project to be certified.
Methodologies: They determine how the baseline (the business-as-usual scenario) and the impacts are calculated.
Independent assessment: This is a third-party audit to ensure that a project meets the standard’s requirements. The auditors are validation & verification bodies accredited in accordance with the ISO 14060 family of GHG standards. These standards lay the basis for certification and provide clarity and consistency for quantifying, monitoring, reporting and validating or verifying GHG emissions and removals.
Registry: There is a list of certified projects where you can see project documentation, track project results, see carbon credits issued by the standard, and check ownership rights and offsets made.
To get certified and receive carbon credits, a climate project follows these steps:
- Submit an application that shows that the project meets the standard’s requirements and that the baseline and future carbon removals or avoidance are calculated in accordance with the suggested science-based methodology
- Pay the certification fee
- Pass assessment of a certified third-party auditor
- Get approval of the carbon standard
- Receive carbon credits on the project’s account in the registry when actual removals or avoidance of CO2 emissions are proven (in some cases the credits are released based on annual audits).
Only then the project will be able to sell the received carbon credits or to use them for offsets.