(C11.2a) Provide details of the project-based carbon credits canceled by your organization in the reporting year.

Question dependencies

This question only appears if you select “Yes” in response to C11.2.

Change from last year

Modified question

Rationale

Carbon credits can be originated from a variety of projects and are verified to a number of standards. Data users are interested in learning about the quality of projects, scope of project types, and the objectives of organizations who have canceled carbon credits and the extent to which the credits are used to achieve these objectives.

Ambition: Carbon credits are issued by a program which adheres to best practice and addresses issues such as additionality, leakage, and reversal.

Connection to other frameworks

SDG

Goal 13: Climate action

NZAM (FS only)

Commitment 4

Response options

Please complete the following table. The table is displayed over several rows for readability. You are able to add rows by using the “Add Row” button at the bottom of the table. *Column/row appearance is dependent on selections in this or other questions.”

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Requested content

Project types (column 1)

• Select the best match for the project from which the credits canceled in the reporting year originated, or select “Other, please specify”.
• You will have the opportunity to provide more details of the project in column 3 “Project description”.

Type of mitigation activity (column 2)

• Select whether the project leads to an:
  • Emissions reduction i.e., an activity that reduces anthropogenic emissions of a greenhouse gas relative to its emissions in the activity’s baseline scenario (adapted from ICVCM); or
  • Carbon removal i.e., an anthropogenic activity that removes carbon dioxide (CO₂) from the atmosphere and ensures its long-term storage in terrestrial, geological, or ocean reservoirs, or in long-lasting products (adapted from UNFCCC).

Project description (column 3)

• Briefly describe the project from which the credits canceled in the reporting year originated, including:
  • the geographic location of the project; and
  • an explanation of how the project leads to GHG emissions reductions or removals (as relevant to your response in column 2).

Credits canceled by your organization from this project in the reporting year (metric tons CO₂e) (column 4)

• Enter, in metric tons CO₂e, the number of credits from this project that were canceled by your organization in the reporting year.
• The figure reported should be the credits canceled by your organization during the reporting year from the project described in column 3, irrespective of whether the credits were issued to or purchased by your organization.
• “Canceled” means that the certificate cannot be used again. For further information, please check the Technical Note “Retirement vs. cancellation of instruments.”

Purpose of cancellation (column 5)

• Indicate whether the credits were canceled in the reporting year to comply with a carbon pricing system (e.g. an Emissions Trading Scheme as reported in C11.1a-b), or whether the credits were canceled as part of your organization’s strategy for voluntary offsetting.
• [Financial services only] “Other, please specify” can be used by banks and asset managers to solicit information on the approach to offsets to meet commitments under the Net-Zero Banking Alliance and the Net Zero Asset Managers initiative respectively, e.g. if the offsets are used to balance residuals, long-term, additional and certified, and only used where no alternatives to eliminate emissions exist.

Are you able to report the vintage of the credits at cancellation? (column 6)

• Indicate whether you can provide a vintage for the canceled credits. Refer to the Explanation of Terms for more information.
• Select “Yes” even if you can only provide a vintage for a proportion of the credits.

Vintage of credits at cancellation (column 7)

• This column is only presented if you select “Yes” in column 6 “Are you able to report the vintage of the credits at cancellation?”.
• If there is more than one vintage for the credits you have canceled from this project, enter the oldest year.

Were these credits issued to or purchased by your organization (column 8)

• Issued - Select this option if you are the company to which the credits were originally issued as a project participant.
• Purchased - Select this option if you bought the credits from another company.

Credits issued by which carbon crediting program (column 9)

• Select “Integrity Council for Voluntary Carbon Markets – Approved carbon crediting program” if your credits have been issued by a carbon crediting program that is not listed but that has been evaluated and approved by the Integrity Council for Voluntary Carbon Markets.
• When selecting one of the “Other…” options, please refer to the following definitions:
  • Private carbon crediting program: A carbon crediting program which has been created by any private entity, such as an NGO, private company, or university.
  • Regulatory carbon crediting program: A carbon crediting program which has been created by a government, regulatory agency, or international governmental organization.
• If you select “Not issued by a program”, explain in column 14 “Comment” who has issued the credits.

Method(s) the program uses to assess additionality for this project (column 10)

• This column is only presented if you select any option other than “Not issued by a program” in column 9 “Credits issued by which carbon crediting program”.
• Additionality is demonstrated if the mitigation activity would not have occurred in the absence of a market for offset credits and associated revenues.
• The Integrity Council for the Voluntary Carbon Market (ICVCM) outlines several methods by which a carbon credit verification standard can assess the additionality of a project:
  • Consideration of legal requirements – can be used to demonstrate that the project would not have been implemented due to existing legal requirements.
  • Investment analysis – can be used to demonstrate that the project would not have been economically attractive without carbon credit revenues.
  • Barrier analysis – can be used to demonstrate that the project faced barriers (e.g., financial barriers, institutional barriers, information barriers, or other barriers specific to the project) not faced by alternatives to the project, and that the expectation of carbon credit revenues was decisive for overcoming these barriers.
  • Market penetration assessment (also referred to as common practice analysis) – can be used to demonstrate that the project activity was not already common practice in the relevant geographical area.
  • Positive lists – can deem the project automatically additional if it meets certain conditions. Companies selecting this option should state in column 13 the eligibility criteria and/or performance benchmarks the standard requires the project to meet to be considered additional.
• If you select “Other, please specify”, provide further details in column 13.
• Select “Not assessed” if the standard does not assess whether the project demonstrates additionality.

Approach(es) by which the selected program requires this project to address reversal risk (column 11)

• This column is only presented if you select any option other than “Not issued by a program” in column 9 “Credits issued by which carbon crediting program”.
• Reversal risk refers to the risk of non-permanence of the mitigation activity.
• The ICVCM outlines two approaches by which a carbon credit verification standard can address, or require the project to address, reversal risk:
  • Monitoring and compensation – where the project aims to guarantee carbon storage for a finite period through long-term monitoring and compensation conditions on potential reversals. For example, unavoidable reversals could be compensated for if the project contributes to a pooled buffer reserve of credits which are retired in the case of an unavoidable reversal event.
  • Temporary crediting – where the standard issues temporarily valid credits to the project in relation to verified ex-post emission reductions or removals. When a credit expires at the end of its validity period and has been retired by a purchaser, the credit purchaser is obligated to replace it with a permanent credit. Temporary crediting aims to guarantee compensation for reversals indefinitely, because credit purchasers need to cover their obligations once a carbon credit expires.
  • No risk of reversal – this option should only be selected for projects where there is no carbon storage and thus no risk of reversal (e.g., renewable energy projects), or where there is no conceivable way for the stored GHGs to be released into the atmosphere. Companies selecting this option should provide a justification of why the project is considered to have no risk of reversal in column 13.
• If you select “Other, please specify”, provide further details in column 13.

Potential sources of leakage the selected program requires this project to have assessed (column 12)

• This column is only presented if you select any option other than “Not issued by a program” in column 9 “Credits issued by which carbon crediting program”.
• Leakage refers to any impact of the project on emissions outside of the project activity – see Explanation of Terms for more information.
• Select the potential sources of leakage emissions the standard selected in column 9 requires the project to assess (sources and examples adapted from the ICVCM):
  • Upstream/downstream emissions – direct impacts of the project on upstream or downstream emissions or removals. E.g., emissions associated with the upstream production of fuel used by the project.
  • Activity-shifting – emissions shifting to locations not targeted or to emissions not monitored by the project. E.g., the displacement of agricultural activity from land that is afforested.
  • Market leakage – emissions occurring elsewhere through an impact on the supply or demand for an emissions-intensive product or service. E.g., rebound effects from energy efficiency measures, where the expected benefit of improved efficiency is reduced due to behavioral or other responses.
  • Ecological leakage – emissions occurring indirectly in areas which are hydrologically connected to the project area. E.g., emissions from wetland soils if water levels are lowered due to the project.
• If you select “Other, please specify” provide further details in column 13.
• Select “Not assessed” if the standard does not require the project to assess leakage emissions.

Provide details of other issues the selected program requires projects to address (column 13)

• This column is only presented if you select any option other than “Not issued by a program” in column 9 “Credits issued by which carbon crediting program”.
• Provide details of how the standard requires the project to minimize and, where possible, avoid negative environmental, economic, and social impacts.
• Provide any other relevant details of the standard selected in column 9.
• If you selected “Other, please specify” in columns 10-12, provide further details here.

Comment (column 14) (optional)

• You can use this text field to enter any additional relevant information.

Explanation of terms

• Vintage: The year in which the mitigation activity took place. For emissions reductions or removals, this should be the year in which the emissions reduction/removal took place. Because the verification process can take two to three years from project inception, projects/programs may generate credits for already-reduced emissions (adapted from the ICVCM).
• Additionality (carbon credits): a project is additional if it would not have occurred in the absence of the incentives from the carbon credit mechanism, taking into account all relevant national policies, including legislation, and representing mitigation that exceeds any mitigation that is required by law or regulation, and taking a conservative approach that avoids locking in levels of emissions, technologies or carbon-intensive practices incompatible with the Paris Agreement goals (adapted from the UNFCCC).
• Reversal risk: refers to the risk of non-permanence of the mitigation activity.
• Emissions leakage: also known as “carbon leakage”, refers to the phenomenon through which efforts to reduce emissions in one jurisdiction or sector simply shift emissions to another jurisdiction or sector where they remain uncontrolled or uncounted (Jenkins et al, 2009).

Additional information

The Integrity Council for the Voluntary Carbon Market (ICVCM)

The Integrity Council for the Voluntary Carbon Market (ICVCM) is an independent governance body aiming to ensure the voluntary carbon market accelerates a just transition to 1.5ºC. Their Core Carbon Principles (CCPs) and Assessment Framework (AF) will set new threshold standards for high-quality carbon credits and define which carbon-crediting programs and methodology types are CCP-eligible. Draft versions of both the CCPs and AF have been published and have undergone a period of public consultation in advance of final versions being released.

Paris Agreement Article 6.4 Mechanism

Article 4 of Paragraph 6 of the Paris Agreement establishes “a mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development”. This mechanism will take the form a new international carbon market, which will replace the Clean Development Mechanism (CDM). Once the mechanism is operational, it is expected to be the best-practice standard for carbon markets.

C11.2a - Scoring criteria

Disclosure scoring criteria

Points will be awarded per completed row in proportion to the number of rows disclosed

A maximum of 8 points is available for this question

Awareness scoring criteria

Full Disclosure points must be awarded to be eligible for Awareness points

i) Any option selected excluding 'Not assessed' in column 'Method(s) the program uses to assess additionality for this project' - 0.25 points

ii) Any option selected excluding 'No requirements' in column 'Approach(s) by which the selected program requires this project to address reversal risk' - 0.25 points

iii) Any option selected excluding 'Not assessed' in column 'Potential sources of leakage the selected program requires this project to have assessed' - 0.25 points

One row scored

Management scoring criteria

Not scored

Leadership scoring criteria

Not scored

Point Allocation