To offset your remaining hard-to-abate emissions, you can buy carbon credits. One credit is meant to offset 1 metric tonne of CO2e. Carbon credits are generated by projects around the world that avoid or remove GHG from the atmosphere, such as reforestation programmes. These projects do not have to be related to your business or located in your own geographical area. Once you buy a carbon credit, it is permanently retired and can't be reused.
Carbon credits are usually certified under an internationally recognised carbon standard (third party agencies for voluntary carbon markets, or governments for compliance markets). The quality of the carbon credit is very important to avoid double counting, ensure additionality, permanence, etc...
Certified Carbon offsetting schemes are run by standard-setting organisations that provide assurance and authenticity for high quality carbon credits. They play a key role in facilitating the flow of carbon credits between the offset project (originator) and the corporate buyer (end-user). Credits can be issued by international, national or independent crediting mechanisms.
Independent carbon offset programmes with the highest issuance are: American Carbon Registry, Climate Action Reserve, Gold Standard, Verra's Verified Carbon Standard, Plan Vivo and the Global Carbon Council. Check also the UN Carbon Offset Platform
In Singapore, Climate Impact X, launched in March 2022, aims to be a global carbon exchange and marketplace providing access and liquidity to high quality carbon credits.
To be considered high quality, any carbon offsetting project need to meet a number of quality criteria. You should plan to carry out independent due diligence on the quality of individual credits purchased throughout your procurement process.
Note: Carbon credits are different from carbon allowances, although the term carbon credit is used interchangeably for both. While both represent one tonne of carbon dioxide equivalent, allowances do not come from carbon reduction projects: they are allocated to companies under a 'cap and trade' system such as the EU Emissions Trading Scheme - they therefore represent a right to emit.
80%
of carbon credits issued in H1 2022 come from nature-based solutions and renewable energy activities
(Climate Focus)
- Understanding the concept of Carbon Trading, by OCBC Bank - Clean Energy Series
- A vibrant carbon market for a low carbon future: Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Climate Impact X Announcement Event, Singapore, 20 May 2021
- Singapore plan: one million-tree project
- WWF position and guidance on voluntary purchases of carbon credits (See Appendix 1 - Credit Quality Criteria)
Nika.eco helps companies who are offsetting emissions through carbon credits to understand the quality of such credits and where to get the best-quality carbon credits with Nika.eco's proprietary remote sensing technology. Nika.eco also has its own portfolio of nature-based carbon projects of high quality.
South Pole has been at the forefront of decarbonization since 2006, developing and implementing comprehensive strategies that turn climate action into long-term business opportunities for Fortune 500 companies, governments and organizations around the world.
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