Carbon credits from current renewable energy methodologies will not receive high-integrity CCP® label

Integrity Council calls on carbon-crediting programs to raise the bar and develop improved methodologies for renewable energy projects.

The Integrity Council for the Voluntary Carbon Market announced today that carbon credits issued under existing renewable energy methodologies, which account for nearly a third of the voluntary carbon market, will not be able to use its high-integrity CCP® (Core Carbon Principles) label.

The Governing Board decided that eight methodologies used to design and implement renewable energy projects 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. These methodologies cover approximately 236 million unretired credits, making up 32% of the voluntary carbon market.

The latest set of assessment decisions take the total number of unretired credits approved to use the CCP label to an estimated 27 million – 3.6% of the market. The Board has also:

• approved a methodology for projects that detect and repair methane leaks in the gas industry that covers an estimated 19 million unretired carbon credits, accounting for 2.6% of the market;

• approved a further version of a previously approved methodology for projects that capture methane from landfill sites;
• rejected a methodology for projects in the magnesium industry that reduce the release of sulphur hexafluoride (SF6) because it did not meet additionality requirements. A relatively small number of unretired credits use this methodology. 

Multi-stakeholder assessments of some of the most popular types of carbon credits – REDD+ (Reducing Emissions from Deforestation and Forest Degradation), Jurisdictional REDD (JREDD and clean cookstoves are also underway and due to be completed in the coming months.

Annette Nazareth, Integrity Council Chair, said: “We are taking the tough decisions necessary to build a high-integrity voluntary carbon market that can be scaled to meaningfully fund climate solutions and channel material amounts of finance to the Global South. While companies’ first priority must always be to decarbonise their own value chains, carbon credits can be an important supplement, allowing them to go further and take responsibility for emissions they cannot yet cut.”

Amy Merrill, Integrity Council CEO, said: “Our rigorous, science-based assessments are well underway and will give buyers confidence that CCP-labelled carbon credits deliver genuine emissions reductions and bring positive social and environmental benefits that support Indigenous Peoples and local communities. These decisions will shape the development of the market and all participants will benefit over time, as CCP-labelled credits unlock greater investment flows and drive innovation.”

The Intergovernmental Panel on Climate Change is clear that use of renewable energy must be scaled up rapidly between now and 2030 to deliver on global emission reduction goals. While renewable energy costs have fallen dramatically around the globe over the past decade, they have not fallen evenly across all countries, and high up-front expenses and other barriers mean that there are still many places where it is difficult to deploy renewable capacity. The Integrity Council is ready to review more rigorous renewable energy methodologies once they are developed and calls on carbon-crediting programs to develop updated methodologies that better reflect the rapidly changing and variable circumstances around renewable energy deployment across different geographies and regions.

Annette Nazareth said: “Renewable energy projects financed by carbon credits still have a role to play in the decarbonisation of energy grids because it remains challenging for many least developed countries to secure the investment they need to transition away from fossil fuels. However, we need to modernise the design of these carbon projects, which carbon-crediting programs can and should do. More robust methodologies would unlock finance for a new wave of renewable energy projects in places where they are most needed.”

Pedro Martins Barata, Integrity Council Expert Panel Co-Chair, said: “Following this decision, we encourage programs to develop methodologies that take a much more sophisticated approach to assessing whether renewable energy projects are additional. It would also be enormously beneficial for international agencies concerned with improving energy access for all to support this work and develop more reliable models and data sets to draw from.”

The Integrity Council has approved a methodology for projects to detect and repair leaks in existing natural gas pipelines (LDAR), for just one crediting period. The methodology is used in lower income countries which often have ageing infrastructure and do not yet regulate gas leaks. It currently covers an estimated 19 million unretired carbon credits from projects in Bangladesh, accounting for 2.6% of the market.

Amy Merrill said: “Methane is a potent greenhouse gas and leakage into the atmosphere should be subject to regulation. The Board has approved this methodology as a stop gap before regulation is widely in place. Leaks can and should be addressed by the companies responsible for building and maintaining this infrastructure.”

In June, the Integrity Council approved four methodologies for projects that capture methane from landfill sites (LFG) and three for projects that destroy stockpiles of ozone depleting substances (ODS), covering an estimated eight million unretired carbon credits.

See Notes to Editors for more details of assessment decisions.

The CCPs establish a global benchmark for high-integrity carbon credits. They are designed to build trust in the voluntary carbon market, ensure comparability of credits, and enable the market to maximise its potential to tackle rising greenhouse gas emissions and unlock significant private finance for climate solutions. The CCP label will give assurance that each credit represents a tonne of emissions reduced or removed from the atmosphere. It also indicates that credits from new projects have robust social and environmental safeguards and deliver positive sustainable development impacts.

Governments and regulators are now looking to the CCPs as an international standard for high integrity. The US and UK as well as the CFTC (Commodity Futures Trading Commission) and ISDA (International Swaps and Derivatives Association), have endorsed the CCPs or issued principles closely aligned with them.

Under the Integrity Council’s “two-tick” process, carbon credits can only be tagged with the CCP label if the carbon-crediting program is approved as “CCP-Eligible” and the projects that generate the credits use methodologies that are also “CCP-Approved”. The biggest programs, ACR, Climate Action Reserve (CAR), Gold Standard and Verra (VCS), are all CCP-Eligible and able to apply the CCP label to credits using CCP-Approved LDAR, LFG and ODS methodologies.

The Integrity Council is continuing to assess some smaller programs and is encouraging others to apply through its program assessment platform before October, when it will close for submission of program applications for six months.

The Integrity Council has grouped more than 100 methodologies into 29 categories for assessment. Most credit categories are being assessed by multi-stakeholder working groups, including experts with relevant knowledge. Assessments of some important credit categories have concluded and will soon come to the Governing Board for decisions, including Improved Forest Management and Afforestation, Reforestation and Revegetation. Assessments of other popular types of credits are due to be completed in the coming months including REDD+ (Reducing Emissions from Deforestation and Forest Degradation), Jurisdictional REDD (JREDD) and clean cookstoves.

The Integrity Council will ratchet up ambition in successive versions of the CCP Assessment Framework, released every two to three years. It has established a series of Continuous Improvement Work Programmes, expert groups that will study complex topics of importance to the future of the voluntary carbon market. It announced today that it will convene a new one to study how to improve existing ways of assessing whether renewable energy projects are genuinely additional and how they account for emission reductions.

Ends.

NOTES FOR EDITORS

About the Integrity Council

The Integrity Council for the Voluntary Carbon Market (Integrity Council) is an independent, non-profit governance body for the voluntary carbon market, which aims to ensure the voluntary carbon market accelerates a just transition to 1.5°C.

The Integrity Council aims to set and maintain a voluntary global threshold standard for quality in the voluntary carbon market. The threshold standard is based on the Integrity Council’s Core Carbon Principles (CCPs) and is implemented through an Assessment Framework that sets out what high quality means by reference to those principles. The result is a threshold standard and label that provide a credible, rigorous, and readily accessible means of identifying high-quality carbon credits.

The latest details on ICVCM’s assessment decisions are available here: Assessment Status.

ASSESSMENT APPROVALS

The Integrity Council has approved one LDAR methodology, taking the total of approved methodologies to eight. It has also approved a further version of a previously approved LFG methodology.

Leak Detection/Repair in Gas Systems

• VCS – Leak Detection and Repair in Gas Production, Processing, Transmission, Storage and Distribution Systems and in Refinery Facilities (v4).

This methodology is used by Verra for projects to detect and repair leaks in natural gas pipelines, preventing methane escaping into the atmosphere. This version covers more than 99% of credits issued in this category.

These projects must go beyond conventional measures that are required and enforced by local regulations, and often use infrared cameras. Current projects are mainly in Bangladesh, but the methodology is approved for use in any lower middle income or least developed country.

Landfill Gas Capture and Utilisation

• AMS-iii.G (v9) – a landfill gas methodology used by Verra and Gold Standard.<sup>[1]
  
  
  [1] Approved where the these conditions are met: all LFG project types that do not generate electricity, and;  LFG-to-electricity projects with a capacity equal to or below 10Mwe.</sup>

In its last decisions, announced in June 2024, the Integrity Council Board approved three landfill gas (LFG) methodologies for projects that capture methane from landfill sites, including AMS iii G version 10. It has now approved a further version of this methodology, which covers a relatively small number of credits.

Other methodologies addressing landfill gas (covering an estimated 18 million more unretired credits) remain under assessment.

ASSESSMENT REJECTIONS ^[2]

The Integrity Council has rejected eight renewables methodologies used by Gold Standard and Verra, as well as a methodology used by Verra for projects that reduce the release of sulphur hexafluoride.

Grid-connected renewable energy

• ACM0002 – Grid-connected electricity generation from renewable sources — Version 21.0 and below
• ACM0006 – Electricity and heat generation from biomass — Version 16.0 and below
• ACM0018 – Electricity generation from biomass in power-only plants — Version 6.0 and below
• AM0036 – Use of biomass in heat generation equipment — Version 7.0 and below
• AM0072 – Fossil Fuel Displacement by Geothermal Resources for Space Heating — Version 3.0 and below
• AMS-I.D. – Grid connected renewable electricity generation — Version 18.0 and below

Mini-grids

• AMS-I.L. – Electrification of rural communities using renewable energy — Version 4.0 and below

Renewable Energy (off grid)

• AMS-I.A. – Electricity generation by the user — Version 19.0 and below

The Integrity Council is still assessing two further Grid Connected Renewables methodologies as well as other Mini-Grid methodologies with a low market share.

Sulphur Hexaflouride Avoidance

• AM0065 – Replacement of SF6 with alternative cover gas in the magnesium industry v2.1

^{[2] Some projects use a combination of methodologies. If any one of these has been rejected credits that they generate will not be able to use the CCP label.}

Data disclaimer

Estimates on credit issuance are based on data from January 2024. Note that LFG estimates have a high degree of uncertainty because, for some projects, the version applied is not known, and some projects are ambiguous, using several versions across multiple crediting periods. These estimates do not replace the CCP tagging, which will be implemented by the respective programs.

CONTINUOUS IMPROVEMENT WORK PROGRAMS

Five CIWPs are already underway and five will commence in the coming months:

Underway:

• Implications of Corresponding Adjustments under Article 6b of the Paris Agreement;
• Whether all carbon credit projects should make a contribution towards climate adaptation;
• How best to align projects with host country climate commitments;
• How to further strengthen the sustainable development requirements, including how to further increase transparency over the use and management of revenues for benefit sharing;
• How to further strengthen the permanence requirements, including developing and stress testing pooled buffer reserves and lengthening the compensation period.

Later this year:

• How best to ensure the integrity of jurisdictional projects at national and sub-national level;
• Developing universal data standards for digital and remote sensing technologies that can verify, monitor and report on projects, such as satellite imagery and machine learning;
• Developing standards for disclosing credit pricing and revenue, standardised contracts and the market infrastructure needed to support this;
• Strengthening oversight of companies that verify and validate carbon-crediting projects;
• Simplifying paths to CCP-Approval for small projects, while avoiding loopholes.

The Core Carbon Principles

A. GOVERNANCE

Effective governance

The carbon-crediting program shall have effective program governance to ensure transparency, accountability, continuous improvement and the overall quality of carbon credits.

Tracking

The carbon-crediting program shall operate or make use of a registry to uniquely identify, record and track mitigation activities and carbon credits issued to ensure credits can be identified securely and unambiguously.

Transparency

The carbon-crediting program shall provide comprehensive and transparent information on all credited mitigation activities. The information shall be publicly available in electronic format and shall be accessible to non-specialised audiences, to enable scrutiny of mitigation activities.

Robust independent third-party validation and verification

The carbon-crediting program shall have program-level requirements for robust independent third-party validation and verification of mitigation activities.

B. EMISSIONS IMPACT

Additionality

The greenhouse gas (GHG) emission reductions or removals from the mitigation activity shall be additional, i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues.4

Permanence

The GHG emission reductions or removals from the mitigation activity shall be permanent or, where there is a risk of reversal, there shall be measures in place to address those risks and compensate reversals.

Robust quantification of emission reductions and removals

The GHG emission reductions or removals from the mitigation activity shall be robustly quantified, based on conservative approaches, completeness and sound scientific methods.

No double counting

The GHG emission reductions or removals from the mitigation activity shall not be double counted, i.e., they shall only be counted once towards achieving mitigation targets or goals. Double counting covers double issuance, double claiming, and double use.

C. SUSTAINABLE DEVELOPMENT

Sustainable development benefits and safeguards

The carbon-crediting program shall have clear guidance, tools and compliance procedures to ensure mitigation activities conform with or go beyond widely established industry best practices on social and environmental safeguards while delivering positive sustainable development impacts.

Contribution to net zero transition

The mitigation activity shall avoid locking-in levels of GHG emissions, technologies or carbon-intensive practices that are incompatible with the objective of achieving net zero GHG emissions by mid-century.