A carbon credit is a tradeable unit representing the avoidance, reduction or removal of one metric ton of CO₂e from the atmosphere. Organizations and individuals can use these credits to oset their greenhouse gas emissions, or excess credits can be sold on verified crediting platforms, creating an extra revenue stream.

WHAT’S THE DIFFERENCE?

While often used interchangeably, carbon offsets and carbon credits operate on different processes and activities:

Carbon Offsets are an avoidance or prevention activity involving a reduction of CO₂ or other greenhouse gas emissions from the atmosphere in order to compensate for emissions made elsewhere. Some examples are solar and wind power.

Carbon Credits are a removal activity involving a removal of CO₂ or other greenhouse gas emissions from the atmosphere. Some examples are reforestation and biochar production. Companies or individuals who earn carbon credits can sell them to other organizations as carbon
osets to help oset their carbon footprint.

HOW DO CARBON CREDITS WORK?

Each carbon credit is treated as a unique and independently verified reduction of greenhouse gasses that must be traceable back to the specific carbon project that generated the emission reduction.

To qualify, the carbon project must be:

1. ADDITIONAL
The value of reductions must be beyond usual business practices.

2. REAL
Carbon reduction is measurable.

3. PERMANENT
The greenhouse gas removal is permanent and cannot be reversed.

4. REGISTERED
Each carbon credit is a unique, serialized and tracked unit that can be retired only once.

5. VERIFIED
An independent and qualified third party conducts a review of the project and certifies the emission reduction claim

WHAT PROJECTS QUALIFY FOR CARBON CREDITS?

Carbon offset and removal projects come in many forms and activities located all over the world, including:

• Carbon and methane capture and sequestration
• Emission reductions in industrial processes
• Land use and reforestation
• Returning biomass to the soil
• Investing in renewable energy
• Improving energy eciency
• Switching to alternative fuel types

WHAT ORGANIZATIONS VERIFY CARBON CREDITS?

Qualifying carbon projects are governed and verified by independent GHG Registries, such as:

https://acrcarbon.org/
https://verra.org/
https://www.goldstandard.org/
https://www.climateactionreserve.org/
https://puro.earth/
https://www.carbonfuture.earth/
https://unfccc.int/

WHO’S BUYING AND SELLING CARBON CREDITS?

Carbon market allows investors and corporations to trade both Carbon Credits and carbon offsets simultaneously.

There are currently two different carbon markets:

Worldwide compliance market
Companies that are large emitters of greenhouse gasses and are subject to government regulations. They are allowed to use carbon offsets for a portion of an emission reduction commitment.

Voluntary carbon market (VCM)
Allows individuals and companies not under a compliance program the opportunity to sell carbon credits to earn revenue or buy carbon credits to oset their emissions.

CARBON CREDIT / OFFSET LIFECYCLE

1. PROJECT DEVELOPMENT, VALIDATION & REGISTRATION

• Offset project is designed by a project developer, financed, then reviewed by an independent auditor
• Audit paperwork is sent to a standards committee, which certifies the project if standards are met
• Project is valued in terms of GHG reduction potential and co-benefits provided

2. CARBON OFFSET ISSUANCES

• Project is verified annually
• Carbon oset credits are issued based on verified quantity of CO2e GHG reductions

3. CARBON OFFSET TRADING / SALES

• Once issued, offsets can be transferred and traded between third-parties
• Purchaser does not necessarily use the offset
• Offsets can be traded several times

4. CARBON OFFSET RETIREMENT

• Offset holders must retire the offset in order to use them and claim the associated GHG reduction
• An offset can only be retired once

WHAT ARE BIOCHAR CARBON CREDITS?

Biochar carbon credits represent a permanent sequestration (removal) of carbon from the atmosphere. Physically trapping carbon in a stable
form (carbon sink) provides a longer and stronger permanence and higher value than traditional avoidance or reduction activities. When it comes to assessing and valuing carbon credits earned from biochar production and sequestration, it’s essential to work with industry-recognized organizations to ensure that the carbon removal is measurable, reportable, and verifiable.

Der Beitrag What exactly are carbon removal credits and how do they work? erschien zuerst auf PYREG GmbH.