IC-VCM approves Verra, ART as meeting CCP requirements
Quantum Commodity Intelligence – The world's largest carbon registry, Verra, and the Architecture for REDD+ Transactions have been approved at the programme level by the Integrity Council for the Voluntary Carbon Market's (IC-VCM's) governing board as meeting the criteria set out in the latter's Core Carbon Principles (CCPs).
The move brings the number of CCP-approved programmes to five, joining Gold Standard, ACR and Climate Action Reserve (CAR), with the combined groups accounting for 98% of the voluntary carbon market (VCM), IC-VCM said Thursday.
Verra was approved after "making significant changes to its procedures", IC-VCM said, though it noted that the approved programmes "have all made changes to the way they operate" to comply with the CCP criteria.
Assessments of UK-based carbon removal standard Isometric, Brazil's Social Carbon and Finnish carbon removal standard Puro.earth are underway, IC-VCM said, adding that "other programmes are welcome to apply and encouraged to do so".
ACR and the Architecture for REDD+ Transactions (ART) are also accredited under the Corsia aviation decarbonisation scheme, with Verra, Gold Standard and CAR receiving conditional approval under the scheme in March.
Programmes that are already eligible for Corsia will go through a "streamlined" CCP assessment process, the IC-VCM said.
"The assessment framework covers an enormous amount of criteria. Some of these, if you are approved as a programme by Corsia, we would deem them as being satisfied," Pedro Barata, co-chair of IC-VCM's expert panel, told Quantum.
"Having said that, we do think that we go further than Corsia in our programme requirements," he said.
He cited as examples "disclosure and transparency requirements, including things like the very specific requirements on validation and verification of third-party entities, governance requirements related to things like having established a policy on conflicts of interest".
Other examples would be transparency around financial revenues, and financial accounts of the institutions that are putting forward the programme.
Methodologies
CCP-labelled credits will not hit the market, however, until individual crediting methodologies under the approved programmes have been endorsed by the Integrity Council, with the first methodology decisions expected to be issued next month.
The Integrity Council has grouped more than 100 methodologies into 29 categories for assessment, with methodologies covering some 6.1% of carbon credits in the market which are deemed to be more straightforward being assessed internally by the Integrity Council secretariat and members of the IC-VCM's Expert Panel.
"We're definitely hoping that at the next meeting in June we will have at least one of those categories ready," said Barata.
A second batch of methodologies presenting more complex issues and accounting for 45.2% of carbon credits in the market are being assessed by so-called multi-stakeholder working groups (MSWGs).
Work on three of the latter group – afforestation, reforestation and revegetation, improved forest management and renewable energy – has been completed, Barata said.
"We've concluded those, it's taken us time to now process the conclusions into decisions," he said.
"Our hope is that some of these MSWGs may get their decisions approved also by June – at least one, I would hope. So the aim is that we'll get to September and we'll have a very substantial amount of the work in terms of the both the MSWGs and the internal assessments out in the market in terms of the decisions being made," he added.
Tagging
Once the decisions have been issued, approved registries can start the process of tagging CCP-eligible credits.
"We have a tagging policy that we're developing, and we're sharing it with the programmes fairly soon. This will detail the process for how the programmes will do the tagging," Barata said.
"So we will come out with the decisions, there will be a process by which those decisions will be converted into actual tags that are visible in the registries of each individual programme," he said.
How long this is likely to take will likely vary, but "my expectation nevertheless is that the market impact will come from the board decisions, because once the board decision is there people will understand, it will be clear, which credits pursuant to which methodologies from which programmes are CCP-eligible", Barata said.
Tagging will be applied retroactively, but subject to any conditions attached to a particular methodology's approval, Barata said, noting that this could apply to vintages in situations where a methodology has been through a number of iterations such that earlier versions do not confirm to CCP requirements but later ones do.
The IC-VCM, one of the global meta-standards aimed at improving the integrity of the voluntary carbon market, launched the CCPs in March last year and unveiled the associated assessment criteria in July.
There has been a fairly widespread assumption for some time among VCM participants that confirmation of CCP eligibility will lead to a two-tier market, with CCP-approved credits likely to command a price premium.
"We know already that there is at least some expectation of a differentiation between a CCP-labelled credit and a non-CCP labelled credit. That's not a guiding principle of ours, but we understand that that's very likely to happen," Barata said.
