Carbon Offset Types Used in the Portfolio
For offsets to have validity, they need to be created from projects that go beyond business as usual (this is the issue of additionality). Credible carbon offset standards ensure that a “real, permanent and verified” emission reduction has occurred and work to eliminate the potential for double counting of the credits through the registration and tracking of the offset.
Currently, no one standard is recognised as “The Standard” which all offsets have to meet, thus the quality of offsets can vary widely. Moves are afoot to create a consistent standard but until that occurs, it is a case of buyer beware.
Beyond Neutral® only sources high quality, accredited offsets.
Listed below is a list of standards that have a level of rigour which provides a degree of assurance that the claimed abatement has occurred. To be accredited with any of these standards, offsets go through a validation/ verification process by an accredited independent organisation. Other offset sources will be assessed over time and added to this list if of a similar standard.
The list consists of offsets that have greenhouse plus sustainable development benefits (GHG+SD) and those that are focused primarily on greenhouse abatement (GHG).
Gold Standard (GHG+SD)
The Gold Standard builds on the framework used for Clean Development Mechanism (CDM) and Joint Implementation (JI) projects and includes additional elements such as a restriction on projects to energy efficiency and renewable energy and the application of a strict additionality test. The Gold Standard is targeted primarily at mandatory markets, especially those operating under the Kyoto Protocol but it is sold in the voluntary market.
It is a widely recognised international standard incorporating sustainable development criteria and its credits are considered to be of a very high quality. The Gold Standard ensures that a project contributes to sustainable development through the inclusion of social and environmental indicators and by ensuring broad stakeholder engagement.
Gold Standard for Voluntary Emission Reductions (GHG+SD)
The Gold Standard for Voluntary Emission Reductions (Gold Standard VER) was produced specifically for the voluntary market. It is also only available for renewable energy and energy efficiency projects in developing countries and is for those projects falling outside the CDM.
It utilises the same basic framework as the Gold Standard referred to above, but is applied in a simplified way so is typically applied to smaller projects that are not normally applying for CDM registration.
Voluntary Carbon Standard (GHG)
The Voluntary Carbon Standard (VCS) provide Voluntary Carbon Units (VCUs) from independently verified projects that have quantifiable, additional and permanent emission reductions. VCS provides project developers with the criteria needed for the creation, verification and registration of VCUs, and provides a protocol for offset verifiers.
The VCS only allows certification of emission reductions that have already taken place and all certified projects are registered on the official VCS website. The VCUs have to be registered with an approved VCU Registry. Unlike the previous two standards, the VCS includes agriculture, forestry and other land use (AFOLU) projects.
Greenhouse Friendly™ (GHG)
Greenhouse Friendly™ is an Australian standard developed by the Australian Greenhouse Office (now part of the Department of Climate Change). One aspect of the Greenhouse Friendly™ initiative certifies approved abatement projects which include energy efficiency, renewable energy, forestry, avoided deforestation, the capture and flaring of landfill gas, and waste diversion and recycling projects.
The abatement projects must occur in Australia and meet specific criteria for additionality, leakage, be permanent and verifiable emission reductions or sequestration. Greenhouse Friendly™ will not certify future offsets as these are unable to be verified.
Beyond Neutral® is an accredited verifier with Greenhouse Friendly™ for projects and products. In addition, our director was instrumental in creating the avoided deforestation abatement available through Greenhouse Friendly™.
Renewable Energy Certificates (renewable energy leading to GHG abatement)
Renewable Energy Certificates (RECs) are an Australian standard currently regulated by the Office of the Renewable Energy Regulator. One certificate is equal to 1 MWh of renewable energy generation which typically displaces about 1 tonne of carbon dioxide equivalent from electricity generation using fossil fuels.
RECs are created from renewable energy sources by generating electricity above a 1997 baseline. RECs are marked with a code that indicates amongst other things who created them, what eligible renewable energy source was used and when the certificate was created. Utilising RECs created and certified under the Government scheme ensures credibility as the offset has already occurred.