Introduction to Carbon Standards
The voluntary carbon market is mainly led by several independent standard-setting organisations, known as accreditation agencies or carbon standards. Each standard sets its own criteria and protocols to ensure carbon projects meet their stated goals and make measurable, verifiable emissions reductions or removals.
Projects must register with a standard and meet the standard-specific criteria for project development, documentation, and third-party monitoring. After a review process, the standard issues tradeable carbon credits to the carbon project owner.
The most prominent standards on the VCM are Verra, Plan Vivo, and The Gold Standard. Other notable and ICROA-endorsed standards include the American Carbon Registry, Climate Action Reserve and ART TREES (Architecture for REDD Transactions). ICROA endorsement indicates a standard that meets ICROA’s principles for high-quality carbon accounting and positive environmental and social impacts.
Verra currently has the largest market share and is known for its highly technical methodologies, while Plan Vivo has extensive blue carbon experience and focuses on delivering small-scale community-based projects. See our Blue Carbon Project Map for the locations and sizes of currently registered blue carbon projects on the Plan Vivo and Verra registries.
In addition to these major standards, several smaller standards exist that are not endorsed by ICROA, meaning they may not always apply the same rigorous criteria and methodologies.
Some countries, such as Australia, have their own standard and methodology systems.
Types of Carbon Credits
Voluntary carbon market credits fall into one of three categories: accredited carbon offsets, unaccredited verified carbon offsets, and unaccredited and unverified carbon offsets.
Accredited Carbon Offsets
Projects produce accredited carbon offsets by accurately measuring emissions reductions or carbon sequestration using a published technical methodology approved by a carbon standard.
Projects must meet the carbon standard’s requirements and be evaluated by an independent third-party organisation called a Validation and Verification Body (VVB) before issuing credits. The VVB “validates” the information projects provide in their documentation, then “verifies” the emissions removals or reductions are real by conducting monitoring throughout the project. This process is known as the accreditation process.
Once a project is accredited, credit certificates are issued after each verification event, and the credit status is recorded in the standard’s registry. Certified credits can either be retained, traded, or “used” by the owner to formally offset one ton of emissions. When a credit is “used,” it is then considered retired. Register for our mangrove modules for more information on the complete project cycle.
Figures 1 and 2. Project Accreditation Process and Project Implementation and Credit Issuance
Unaccredited verified carbon offsets
Unaccredited verified offsets are produced by projects which have chosen not to go through a carbon standard’s accreditation process. In some cases, projects do not pursue accreditation because of the high cost, while others do not intend to trade the offsets at all to outside individuals or organisations. Some projects will still offer offsets for sale through private websites or directly to interested parties. Check the carbon standard’s registries or Fair Carbon’s Blue Carbon Project Map to view all registered blue carbon projects accredited or under development by an ICROA-approved carbon standard.
Unaccredited but verified projects may choose to use a methodology accepted by any carbon standards or implement their own custom methodology. No matter the methodology, the project engages with a Validation and Verification Body (VVB) or other third-party to verify that their emissions reduction claims are legitimate. While the verification process adds credibility to the project’s carbon benefits, the fact that it is not registered with a standard means the offsets are difficult to track.
Unaccredited, unverified carbon offsets
Unaccredited, unverified carbon offsets are produced by projects making emissions reduction or removal claims which have neither been accredited by a carbon standard, nor verified by any third-party organisation. These projects may or may not measure their impact using reliable carbon accounting methods. While some hold themselves to high scientific and ethical standards, others may be fraudulent.
Many websites offer unaccredited, unverified carbon offsets for sale to companies or the public without any regulation.
Buyers must decide for themselves, based on the information a project provides, whether it is scientifically sound or ethical. Many buyers cannot carry out a thorough due diligence process, and as a result, there have been documented cases of companies purchasing non-existent or illegitimate offsets.
The sale of unaccredited, unverified offsets is often regarded as operating outside the voluntary carbon market, and organisations like ICROA caution against it.
Suggested Citation: Francis, E., Wilkman, A., Beeston, M. "Introduction to Carbon Standards." Geneva, Switzerland: Fair Carbon, 2023. https://faircarbon.org/content/fc/introtostandards
