We’re often asked if a particular activity will qualify for carbon credits. This article briefly explains how project developers can begin to screen their ideas to see if they will qualify for carbon credits.
What Type of Activities can Potentially Earn Carbon Credits?
Carbon credits are earned through activities that reduce emissions.
Many different activities can potentially be recognised with carbon credits for their reduction of emissions. Some of the most popular types of carbon credit projects include:
- Renewable energy projects
- Improving energy efficiency
- Methane capture and other waste management
- Carbon capture and sequestration
- Land use and reforestation
This list is constantly evolving, as carbon credits are intended as a financial incentive to accelerate society’s fight against climate change. They are not intended to be a permanent solution for rewarding project developers.
Can All Activities Earn Carbon Credits?
While there are common types of carbon credit projects, not all emission-reducing activities are eligible for carbon credits.
This might sound odd. But, there are a series of specific rules that determine which specific activities can receive carbon credits. These specific rules vary between types of activities, the country in which the activity is located, and the specific carbon standard on which the activity will be registered as an ’emission reduction project’.
These rules also change over time to ensure that the limited dollars from carbon credits are directed to the right projects. These rules become tighter and more restrictive over time.
Consider a solar farm for a simplified example. A solar farm avoids emissions that would normally occur from a fossil-fuel source of electricity, and in principle, should be rewarded with carbon credits. However, a solar farm in a developed economy is highly unlikely to be eligible because this technology is becoming commonplace. A solar farm in a Least Developed Country would be eligible, because this technology is less common and still needs incentives.
If you can show you’ve met all the latest criteria and can comply with the deadlines, there should be a reasonable chance that your specific activity can earn carbon credits.
What Will Definitely NOT Earn Carbon Credits?
Before turning to the specific rules for your activity, it’s worth knowing that there are a few conditions that will almost certainly invalidate an activity from earning carbon credits.
These include situations where the activity:
- Does not comply with legal standards;
- Is a legal requirement and it has to be implemented;
- Results in net harm to the environment or society;
- Has not adequately engaged stakeholders;
- Cannot substantiate its claims of positive impact on the emission of GHGs; and/or
- Would have been implemented anyway, or should have been implemented anyway, even where carbon credits weren’t going to be earned.
Of course, this is just a short list, and please note there can be exemptions to some of the items above.
So Where do I Find the Rules for My Activity?
This is where the journey begins to get complex. You will need to find a scientific methodology to quantify the emissions reductions from your activity. That scientific methodology may refer to many tools and procedures. You will also need to find a carbon standard that will accept your application.
Sounds Good. How Can I Take the Next Step?
We’re written up a dedicated post on the process to earn carbon credits. The answer to the specific rules for your activity will come from following the development process.
If you need a kick start, we’re also willing to help. Reach out to us for more information.
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