Carbon offset projects are initiatives or activities designed to reduce or remove greenhouse gas (GHG) emissions from the atmosphere. It is a way for companies to offset their emissions in the short term as they work towards their emissions reduction targets, as well as to offset emissions that cannot (yet) be eliminated.
WHY IS ADDITIONALITY IMPORTANT IN CARBON PROJECTS?
To ensure that one offset sold actually represents one metric ton of carbon dioxide removed or avoided it is crucial that the offset is additional. As such, it is reflected as one of the core carbon principles for high-integrity carbon credits.
Additionality, in the context of carbon projects, refers to the concept that a particular activity is generating additional GHG emissions reductions (or removals) beyond what would have occurred in the absence of the project. It is a key criterion for determining the legitimacy and effectiveness of carbon offset projects.
Let’s take a project focused on improving agricultural land management (ALM) practices for example. The project aims to claim emission reductions by reducing fertilizer usage from the current usage levels in country X. However, the government of country X has just implemented regulation requiring the exact same fertilizer usage reduction. As such, the project activity would have happened anyway due to the regulatory environment. Therefore, the project activity is not deemed additional as it cannot prove ‘regulatory surplus’.
However, just because fertilizer reduction is not additional does not mean you can’t develop an additional ALM project in country X. For example, you could instead focus on improving agricultural land management by introducing no tillage and crop rotation practices to increase soil carbon levels. If these activities are not common practice, go beyond what is required by regulation and would not be implemented without carbon finance to compensate for reduced crop yield these could be additional.
BUT HOW CAN COMPANIES CHECK WHETHER A CERTAIN PROJECT (ACTIVITY) IS ADDITIONAL?
Carbon standards, such as the ICROA-endorsed VCM or Gold Standard, describe which additionality tests need to be performed for which type of project activity to be deemed eligible. Such tests often include showing the project activity is not common practice in the area, is not required by law and is facing barriers that prevent the implementation of the activity without the revenue from the sale of carbon offsets.
HOW CAN WE HELP YOU?
At Strive we help you navigate the complexity of the voluntary carbon space and provide you access to high-quality offsets through our deep understanding of environmental markets. With our in-house business development and technical teams, we are able to bring carbon projects from initial ideas into registered, investable assets after a first rigorous screening, due diligence, (pre-) feasibility study, de-risking and transaction structuring.
Contact us to find out more information about how we can support you in the voluntary carbon market space and achieving your climate goals.