How does a carbon credit project get developed?

You’ve heard about carbon credits, or are already using them to offset your organisational footprint. But do you know how they are generated in the first place? We explain how a carbon credit project is developed so you can be confident in your carbon neutral claims.

Carbon credits are awarded for projects that store, avoid or reduce greenhouse gas (GHG) emissions in the atmosphere.

Need a refresher? Read our Carbon Credits 101 article

Good carbon credit projects need to have measurable climate and sustainable development impacts - so they can be used to offset the unavoidable emissions that businesses and communities generate.

But how does this process actually work? Well, a high-quality project is subject to rigorous checks and balances (Read more: Carbon Credits - High vs Low Quality).

In order to become a carbon credit project, there are a number of steps. A significant majority of our credits are from Gold Standard (GS) certified projects, so we’ll use their process as an example.

Phase 1: Design

This initial phase of the project’s development is key to ensuring there is a robust starting place for either avoiding, storing or reducing carbon, along with providing other positive sustainable development.

Developers need to ensure that what they plan to do has measurable climate and sustainable development impacts. They also need to ensure they meet the GS safeguards, which means that any risks will be identified and avoided or mitigated across not only environmental issues, but also social and economic ones.

For example, that a wind farm project ensure that the build and operation provides workers with safe and healthy working conditions and prevents accidents and injuries. The design proposed undergoes an initial review by SustainCERT, Gold Standard’s certification body. If the project meets all requirements, it is given the green light to move forward under GS’s certification process. The design is independently verified (by an SustainCERT accredited validation and verification body) which is then assessed by SustainCERT. Certification status of the design is awarded if all requirements are met.

Phase 2: Implementation

This is when the infrastructure is built, or the technology is disseminated. For instance, it may be a large-scale solar power plant being constructed in India. Another example is the dissemination of efficient cook stoves in Sudan. The project implementation needs to follow the approved design, and then is monitored as per an agreed plan, submitting appropriate updates as required.

Phase 3: Performance Review

This is where outcomes of the project are checked against the initial plan – confirming it avoids, stores or reduces carbon. For the solar power plant example, that the plant is running well and generating the planned amount of electricity. The performance measurements are assessed by an independent body, and this is then reviewed by SustainCERT.

Phase 4: Certification

Final certification of the project is awarded if all phase requirements are met and the impact is achieved. This then becomes a carbon credit that is available for purchase on the carbon credit markets.

Reducing our carbon emissions (from our country, our businesses and our homes) is key to transitioning to a low carbon economy. But carbon credits are vital to achieve the drastic reductions in emissions required if we are to meet the 1.5 degree Celsius temperature rise limit.

We can help your organisation understand your carbon footprint, develop reduction plans and credibly offset your unavoidable carbon emissions.

Get in touch to join the Toitū collective of organisations taking climate action.

We hope you enjoyed reading about how projects become credits. Find out more about carbon credits and other carbon information by browsing our news section.

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