About a third of existing carbon credits failed to meet the criteria for a new standard intended to act as a global benchmark for the voluntary carbon market, its board said on Tuesday.
In the voluntary market, companies can buy credits for projects such as wind farms or global reforestation schemes and use them to meet their internal carbon-cutting goals. All the credits that fell on the benchmark in the latest assessment are linked to renewable energy.
Demand for offsets stalled last year following widespread skepticism that the credits helped reduce emissions.
The Integrity Council for the Voluntary Carbon Market (ICVCM), an independent governing body, sought to address integrity concerns by introducing the Core Carbon Principle (CCP) standards and evaluating the suitability of projects.
ICCM said that eight renewable energy systems, which include 236 million unused, or unused carbon credits that make up 32% of the market, failed to meet their standard requirements for additional reasons.
Addition is a measure of whether the project needed money from the sale of carbon credits to proceed. If the project is to go ahead wherever it is, then the argument that it has led to avoided emissions, and therefore deserves credit, is undermined.
Amy Merrill, CEO of ICCMM said that renewable projects can still be part of the voluntary carbon market and that new methods can be brought forward for consideration.
“There are still places in the world where export constraints mean projects can’t be added,” he said in an interview with Reuters.
The price of renewable energy costs fell 69% last year to $3.88 per metric ton, the non-profit Ecosystems Marketplace reported in May.
Analysts say that failure to meet the CCP standard could lead to the prices of renewable offsets falling significantly this year.
“We don’t want to speculate on the price, we are trying to limit the integrity of the market. We’ve always said that we don’t expect everything to go away,” said Merrill.
—Susanna Twidale, Reuters
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