The international carbon market is expecting new quality and integrity qualifiers from July 2023 that will provide further transparency and certainty to those buying carbon credits.
Identifying high-integrity carbon credits
The Integrity Council for the Voluntary Carbon Market (ICVCM) has confirmed new labels will be introduced in Q3 (from July 2023). These labels will identify high-integrity carbon credits—credits that will create verifiable climate change with environmental and social integrity.
The labels come following extensive stakeholder consultation including with Indigenous peoples and carbon credit traders, and the publication of the Core Carbon Principles (CCPs) in March 2023—principles establishing thresholds for integrity ratings based on a range of scientific factors and verifiable data.
Achieving climate goals and SDGs
The ICVCM labels will be key to global achievement towards climate goals by giving companies, governments and investors knowledge to choose high-integrity carbon credits facilitating real action toward climate change mitigation.
They will also include information such as the carbon-crediting program that issued the credit and the credit type. This allows for more certainty in choice and greater guarantee that a carbon credit purchase contributes to the global effort to achieve the 17 Sustainable Development Goals (SDGs) set out by the United Nations and work towards the Paris Agreement on Climate Change.
Demonstrating the integrity of carbon credits
Labels and thresholds will be further segmented with greater information about programs and credit types implemented on an on-going basis from Q3, 2023. The revision process for assessing and updating CCPs is set for 2025 with implementation through to labelling in 2026.
“The new labels will help demonstrate the integrity of a carbon credit and make it easily recognisable regardless of the program, emissions type (removal or reduction), methodology or geography,” says Viridios AI CEO Marcelo Labre.
Additional tagging of carbon credit attributes will also be possible. These attributes could include whether the credit transfer will be adjusted in the host-country’s national emissions tally, under Article 6 of the Paris Agreement on Climate Change, or which SDGs the credit impacts.
“Critically, the ICVCM labels will allow for equitable treatment of carbon credits and assess their true quality based on data rather than reputation. In a fast-growing market being able to qualify carbon credits for their integrity is key to legitimising the industry and promoting further growth,” Labre says.
Supporting the growth of the voluntary carbon market
The voluntary carbon market has seen its value quadruple with trading hitting half a billion tonnes of carbon credits in 2021. Analysts predict a $1 trillion voluntary carbon market by 2037 under rigorous and robust standardisation—one that the new labelling is set to achieve.
The expected outcome of labelling is less fragmentation of the carbon credit system, more certainty that carbon credits are doing good, and greater guarantee that the carbon credit market contributes to a more sustainable world. Over time, the aim of the IC VCM is to drive carbon credit ambition and raise the overall quality and integrity of all carbon credits.
From July 2023, carbon credit buyers should look for the CCP label identifying high-integrity carbon credits on the VAI platform. Now with detailed information on more than 16,000 carbon projects, VAI is one of the leading sources of data on carbon credits around the world and is committed to improving transparency around the voluntary carbon market.