The Impact of the Core Carbon Principles on the Voluntary Carbon Market

image_pdfDownload PDF

The worldwide effort to combat climate change and the pressing need to shift towards a more sustainable economy have resulted in the formation of various task forces dedicated to expanding voluntary carbon markets and enhancing nature-related financial disclosures.

 

In this article, we emphasize the Core Carbon Principles (CCPs) formulated by The Integrity Council for the Voluntary Carbon Market (ICVCM). The objective is to establish a global standard that guarantees integrity in the Voluntary Carbon Market.

We will talk about:

 

 

Good Reading!

What are the Core Carbon Principles?

the core carbon principles

The CCPs comprise 10 quality criteria for carbon credits in the Voluntary Carbon Market.

 

These principles establish a unified standard for what constitutes a high-integrity carbon credit. They were developed following a public consultation that received over 5,000 comments from 350 organizations.

 

The 10 CCPs focus on three key areas:

 

  • Governance of the projects
  • Effectiveness of carbon credits in reducing emissions
  • Contribution of credits to sustainable development in their implementation regions

Download this post by entering your email below

Do not worry, we do not spam.

The 10 Core Carbon Principles

Governance

1.Effective governance

The carbon crediting program must implement strong governance to ensure transparency, accountability, continuous improvement, and the overall quality of carbon credits.

 

The ICVCM states in its Summary for Decision Makers that it will encompass “meeting governance requirements established by CORSIA,” along with “a transparent and robust corporate governance framework, including reporting and disclosure, as well as risk management policies and controls like anti-bribery and anti-corruption measures”.


2.Tracking

The carbon crediting program must maintain or utilize a registry that uniquely identifies, records, and monitors mitigation activities and issued carbon credits. This ensures that the credits are securely and clearly identifiable.

 

This is a crucial aspect for enhancing the integrity of the Voluntary Carbon Market. Without the ability to trace carbon credits, they could be sold to multiple buyers, diminishing the total carbon mitigation achieved by the market.


3.Transparency

The carbon crediting program must offer detailed and transparent information about all credited mitigation activities. This information should be publicly accessible in electronic format and easy for non-specialists to understand, allowing for thorough examination of the mitigation activities.

 

The ICVCM acknowledges the cumbersome and paper-intensive procedures currently necessary for issuing carbon credits and affirms that digitization is essential for ensuring transparency in carbon markets.


4.Robust independent third-party validation and verification

The carbon crediting program must establish program-level requirements for thorough and independent validation and verification of mitigation activities by third parties.

 

The ICVCM clarifies that to fulfill this criterion, crediting programs must establish the rules for accrediting validation and verification bodies (VVBs), monitor their performance, and create standards and procedures to guide their operations.

 

Emissions Impact

5.Additionality

The greenhouse gas (GHG) emission removals or reductions resulting from the mitigation activity must be additional, meaning they would not have taken place without the incentive provided by carbon credit revenues.


6.Permanence

The GHG emission removals or reductions from the mitigation activity must be lasting. If there is a possibility of reversal, appropriate measures must be implemented to manage and compensate for those risks.

 

This is especially critical for reforestation credits. With climate change leading to more frequent wildfires, it is essential to ensure that forests recently issuing carbon credits are not destroyed.


7.Robust quantification of emission reductions and removals

The GHG emission reductions or removals resulting from the mitigation activity must be rigorously quantified using conservative approaches, comprehensive data, and scientific methods.

 

This CCP addresses the concern that the benefits of some carbon mitigation projects may be exaggerated.


8.No double-counting

The GHG emission removals or reductions from the mitigation activity must be counted only once towards mitigation targets or goals. This requirement addresses and prevents instances of double issuance, double claiming, and double use.

 

Double counting is a major concern in the carbon market, and it will undoubtedly be addressed by the enhanced tracking and traceability measures.

 

Sustainable Impact

9.Sustainable development benefits and safeguards

The carbon crediting program must include clear guidelines, tools, and compliance processes to ensure that mitigation activities meet or surpass widely recognized industry standards for social and environmental safeguards, while also providing positive impacts on sustainable development.

 

This principle mandates that mitigation projects demonstrate how their impacts on the SDGs align with the host country’s objectives and include safeguards to ensure respect for human rights.

10.Contribution toward net zero transition

The mitigation activity must prevent the establishment of GHG emission levels, technologies, or carbon-intensive practices that conflict with the goal of reaching net zero GHG emissions by mid-century.

The Impact of Core Carbon Principles on the Voluntary Carbon Market

June 2024 marked a significant development in the Voluntary Carbon Market (VCM) as the ICVCM approved two Verra methodologies under the Core Carbon Principles (CCPs):

 

  1. AMS-III.G.: Landfill Methane Recovery
  2. ACM0001: Flaring or Use of Landfill Gas

Market Reaction to New CCPs

Following these approvals, there’s been a noticeable increase in activities for projects eligible for the CCP label, such as VCS138, VCS3010, and VCS441.

 

These projects have seen notable price increases for certain vintages. For example, the offered price for VCS138 v22 jumped from $8.50 per metric ton of CO2 equivalent (mtCO2e) to $13.50 mtCO2e.

 

Detailed Price Trends

The price trend for VCS138-v2022, associated with Landfill Gas Management in the US, compared to our Gas Abatement North America curve, reveals interesting insights:

 

  • Over recent months, VCS138 has consistently commanded a premium, averaging $2 above the Gas Abatement North America curve, indicating its perceived higher quality.
  • However, VCS138–2022 experienced a significant price dip of around 35% since mid-March 2024.
  • Remarkably, the price for VCS138 soared from $7.76 mtCO2e to $11.77 mtCO2e, marking a dramatic 50% increase, and returning to its March 2024 levels.

 

This surge in prices following the adoption of CCPs is a positive signal for the market, suggesting robust demand and recognition for projects adhering to these stringent environmental standards.

Viridios AI and ICVCM

At the beginning of 2024, ICVCM approached us with a unique requirement that initially puzzled us, as we primarily see ourselves as a product company. However, their challenges with raw registry data underscored the immense value of the countless hours we have spent cleaning, organizing, and normalizing this data.

 

ICVCM required a clean dataset of carbon project data from the main carbon registries, including detailed information on project methodologies, their versions, and the tools permitted for these methodologies. This data was crucial for their preparation and organization of the assessment work for the Core Carbon Principles.

 

Much of this data was already available on our VAI platform, and we utilized our project document infrastructure and expertise in Large Language Models (LLMs) to extract the rest.

 

This collaboration was more than just a project for us; it was a mission with a deeper sense of purpose. We are proud to support ICVCM in their vital work towards a carbon market with greater transparency and integrity.

 

If you want to learn more about the Core Carbon Principles and how to use the CCP Labels on our platform, book a demo with our specialists.

Book a Demo

Speak with one of our carbon specialists to learn more about the voluntary carbon market and the VAI platform.

About the authors:

Mariana Marins is Content Marketing Manager at Viridios AI. Mariana has 9 years of experience in marketing across different markets and companies, both in the non-profit and private sectors. Her background includes marketing and GTM strategies, CX, inbound marketing, SEO, and content production.She holds a Bachelor’s degree in Communications/Marketing, a MBA in Business Management and Design Thinking, and an Innovation Leadership Program Certificate from The Hebrew University of Jerusalem.

image_pdfDownload PDF