Carbon Units 101

Carbon Units 101

There is increasingly wide acceptance in the community that to achieve net zero carbon emissions, we need to do more than replace fossil fuel energy with renewable energy, we need to improve industrial efficiency.

On our digital workbench CORE Markets, we cover major local and international carbon units, with live market prices and daily price curves on each.

Here is a summary of the main units listed and traded on our CORE Markets platform:

Australian Carbon Credit Units (ACCUs)

Australian Carbon Credit Units are a financial product equivalent to 1 metric tonne CO2e stored or avoided by a project in Australia. ACCUs are created under the legislation enabling the Emissions Reduction Fund (ERF). ACCUs can be created by various methods, including waste (49% of total ACCUs created to date), vegetation/forestry (48%), savanna burning (2%) and agriculture (<1%). To be eligible, projects must meet strict additionality, methodology and reporting requirements.

ACCUs are used to meet corporate requirements under the safeguard mechanism. In addition to this, ACCUs are increasingly used for voluntary carbon offsetting. Creation and tracking of ACCUs is administered by the Clean Energy Regulator, an Australian federal government agency in the Australian National Registry of Emissions Units (ANREU).

ACCUs are generally viewed as the top standard for offsets and are suitable for offsetting under the following schemes and programs:

  • Climate Active
  • NABERS
  • Safeguard mechanism

New Zealand Units (NZUs)

New Zealand Units are carbon credits created under the New Zealand Emissions Trading Scheme (NZ ETS) and are equivalent to 1 metric tonne CO2e. The vast majority of NZUs are created through forestry activities in New Zealand.

NZUs are administered by New Zealand’s Environmental Protection Authority.

NZUs are suitable for offsetting under the following schemes and programs:

  • New Zealand Emissions Trading Scheme

Verified Carbon Standard / Verra (VCS/VCU)

The Verified Carbon Standard is a large voluntary carbon standard with over 1700 projects certified, over 750 million tCO2e of units issued and over 370 million tCO2e of units retired. The Verified Carbon Standard requires compliance with the standard, third party auditing and use of the Verra registry. VCUs can be created under a variety of methods, however the majority are created through reforestation/afforestation (>46%) and renewable energy (>43%) projects.

The Verified Carbon Standard is administered through the Verra Registry by Verra, a not-for-profit founded in 2007 by environmental and business leaders who saw the need for greater quality assurance in voluntary carbon markets.

Gold Standard

Gold Standard are carbon offset units for projects that contribute to the United Nations Sustainable Development Goals. Both VER (Voluntary Emissions Reduction) and CER (Certified Emissions Reduction) units can attain Gold Standard certification by complying with the program rules. Gold Standard certifies a variety of project types, the largest categories being wind energy (32% of total issuance to date), domestic energy efficiency (primarily safe drinking water and energy efficient cookstoves – 25%), and biogas (12.5%).

Gold Standard accreditations are overseen by the Gold Standard Foundation, an NGO founded in 2003 by the WWF and other NGOs.

REDD+

REDD+ are carbon credits associated with the United Nations Reducing Emissions from deforestation and forest degradation in developing countries (REDD+) program. There are five eligible activities under the REDD+ program:

  1. reducing emissions from deforestation;
  2. reducing emissions from forest degradation;
  3. conservation of forest-carbon stocks;
  4. enhancement of forest-carbon stocks; and
  5. sustainable management of forests.

REDD+ credits are typically registered under the Verified Carbon Standard.

Certified Emissions Reduction (CER)

Certified Emissions Reductions are created under the Clean Development Mechanism of the Kyoto Protocol. The majority of CERs are related to renewable and other energy projects predominantly in developing countries. CERs can be used by industrialised countries to offset part of their emissions reductions target under the Kyoto Protocol.

CERs issued under the Clean Development Mechanism (CDM) are administered by the United Nations.

In Summary

All organisations should be looking at pathways to sustainability. Now is a great time for Australian corporates to set their sights on ambitious targets, capture some great value and make a strategic decision about procuring carbon offsets by going direct to the market.

At Renewable Energy Hub, we aim to remove the key barriers to uptake of clean technologies with our world-first energy contract and data marketplace CORE Markets.

CORE Markets provides users with a full suite of data, tools and analytics to facilitate price discovery, robust analytics and deliver low transaction costs for products tailored to your needs.

You can find out more about the CORE Markets platform here.

 

 

 

 

 

 

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