The Integrity Council for the Voluntary Carbon Market (IC-VCM) has released its new global benchmark for “high-integrity” carbon credits. The framework will be used to assess whether carbon credits meet 10 Core Carbon Principles (CCPs).
The VCM gives companies – as well as non-profit organisations, governments, and individuals – the opportunity to buy and sell carbon offset credits. One offset represents the reduction of one metric tonne of carbon dioxide or GHG emissions. However, the credibility of the schemes and the price of the offsets can vary considerably.
Campaigners have long argued that companies should focus on carbon reductions rather than offsetting. But in recent weeks scrutiny has intensified – in particular when offsets are used to make claims such as ‘carbon neutral’.
Regulators in the UK and EU have begun to clamp down on dubious claims, with bans on the horizon. Major food companies including Nestlé, Leon and most recently Sodexo, have drop their carbon neutral claims or targets.
Under the IC-VCM’s new framework, carbon offsetting programmes will submit evidence that they meet the principles. They will for example have to monitor and report on emissions reductions and removals for at least 40 years where there is a risk they may be “reversed” – for example through wildfires – and maintain a risk-based “buffer pool” of carbon credits that can be cancelled to compensate for any reversals. This includes projects that protect and restore forests, wetlands and marine ecosystems, and that store carbon in farm soil.
There must also be compatibility with net-zero, so projects involving carbon capture and storage are ruled out. Once approved, schemes will be able to use the CCP label on specific categories of credits.
Further improvements are also being assessed by the council, such as satellite monitoring of projects and price transparency, ready for an updated framework in 2026.
“We know there is strong demand for high-integrity credits and the CCP label will give more companies confidence to invest,” said council chair Annette Nazareth. “We expect high-integrity credits to trade at a premium, which will incentivise the market to adopt CCP criteria. Greater confidence in the voluntary carbon market will unlock additional investment and create a market that is highly liquid and scalable,” she added.
Since June, the IC-VCM and the Voluntary Carbon Markets Integrity Initiative (VCMI) have been collaborating in a bid to “establish an integrated market integrity framework to ensure quality, transparency, credibility, and accountability for the voluntary carbon market across the value chain”. VCMI has said 2023 has become a “pivotal year” for the voluntary carbon market.
The VCMI has also published a new code of practice detailing how companies should use carbon offsets. Companies making claims will need to publicly disclose their greenhouse gas emissions and set science-based near-term carbon reduction targets and demonstrate they are on track to meet them. They will also need to make credible commitments to net-zero.
The initiative is currently seeking a branding agency to help design new labels for making VCMI claims. Due to be released at the end of the year, the labels “have the potential to drive/encourage more ambitious climate action, support existing progress and commitments from companies, and deliver on other VCMI goals”.
Food companies will be watching developments closely. Some believe that even those making credible claims will come under attack.
“There are some organisations that have got this really amazing offset strategy and have put in a considerable amount of money – and yet they're still being criticised for the offsets they’ve chosen,” Sodexo director of corporate responsibility Claire Atkins Morris told Footprint this week.
The catering firm has just dropped its target to become carbon neutral by 2025. The funds originally put aside for any carbon offsets required are being diverted into decarbonisation projects.
Leon has also phased out its carbon neutral burgers and fries from its menus. The chain was subject to criticism for the offsets it was using in 2021.
In January this year, research into Verra – the world’s leading carbon standard for the rapidly growing $2bn (£1.6bn) voluntary offsets market – by The Guardian, German weekly Die Zeit and investigative journalists at non-profit SourceMaterial, found that more than 90% of its rainforest offset credits (which are among the most commonly used by companies) are likely to be “phantom credits” and “do not represent genuine carbon reductions”.
