Carbon Credits

Vision

A global leader in developing high integrity, nature based carbon credits that help achieve Net Zero Carbon Compliance targets and directly benefit the social, economic, and environmental well-being of people living in the Amazon Biome and Chaco Forests.

Understanding Carbon Markets

Compliance Carbon Credit Market

Operate under regulatory frameworks where entities are obligated to meet emissions reduction targets set by government authorities. Legal obligation to comply with emission reduction targets or purchase carbon credits to meet regulatory requirements. Non-compliance met with penalties or legal consequences. Rigorous government oversight and frameworks to ensure adherence to emission reduction goals and maintain the integrity of the market.

Examples

  • The EU Emissions Trading System (ETS) has significantly contributed to reducing GHG emissions in Europe by creating a market-driven mechanism that incentivizes investment in clean technologies and demand for compliance carbon credits.

  • China ETS, world’s largest carbon market, drives demand for compliance carbon credits by requiring covered entities to either reduce emissions or purchase credits to comply with regulatory targets.

Market Valuation

The Compliance Carbon Credit Market was valued at $86.1 billion USD in 2022 and set to grow to $321.8 billion USD by 2032 (13.7% CAGR). The evolution of government policies and regulations, coupled with increasing social and environmental awareness, is expected to drive compliance carbon credit market expansion.

Voluntary Carbon Credit Market

Driven by voluntary commitments, companies and individuals choose to purchase carbon credits to offset their emissions, contributing to environmental projects, and supporting sustainable initiatives. Not legally binding, offer flexibility in project development and implementation. Projects vary widely and can include reforestation, conservation, renewable energy, methane capture, and others contributing to emissions reduction or removal.

Incredible Amazonia forest from the sky

Examples

  • Multiple standards, such as the Verified Carbon Standard (VCS) and the Gold Standard, are widely recognized and rigorous frameworks for certification of voluntary carbon credits.

Market Valuation

The Voluntary Carbon Credit Market was valued at $1.8 billion USD in 2022 and set to grow at a rate of 27.4% through 2032. The voluntary carbon credit industry is undergoing significant transformation. Corporations are making substantial sustainability commitments, driving increased demand for carbon credits to offset emissions.

High Integrity Carbon Credits

A hallmark of high integrity carbon credits is their contribution to social and environmental co-benefits, such as access to healthcare, job creation and training, and biodiversity conservation. These credits adhere to recognized third-party certification standards, providing transparency and credibility in the carbon market. The emissions reductions or removals claimed by the project must be accurate, additional, verifiable, permanent, and environmentally sound.

  • Verifiable credits have credibility, reinforced through recognized  third-party verification.

  • Additionality is paramount, greenhouse gas reductions or removals are additional if they would not have occurred in the absence of an offset market.

  • Permanence is achieved when measures are in place to prevent the reversal of carbon sequestration over time, sustaining the benefits of the project.

Article 6 of the Paris Agreement

Article 6 of the Paris Agreement allows for international cooperation to tackle climate change and unlock financial support for developing countries. This means that countries are able to transfer carbon credits earned from their reduction of greenhouse gas emissions to help others meet their climate targets, the Nationally Determined Contributions (NDCs) that countries submitted under the Paris Agreement.

Most NDCs submitted under the Paris Agreement acknowledge that carbon markets will be a key mechanism to achieve their emission reduction targets.

There are two tools under Article 6, specific to carbon markets, that countries can use:

  • Article 6.2: Establishes a new UNFCCC mechanism for the validation, verification, and issuance of high-quality carbon credits. These are authorized as Internationally Transferred Mitigation Outcomes (ITMOs).
  • Article 6.4: Allows countries to exchange mitigation outcomes bilaterally, to report their trade, and use them toward their NDCs.
Red and Yellow Macaw

Internationally Transferrable
Mitigation Outcomes (ITMOs)

The GHG emission reductions or removals transferred under Article 6.2 are a specific type of carbon credit known as ITMOs. To be authorized as ITMO credits, projects are thoroughly vetted by independent, third-party agencies, providing further assurance of additive emissions reduction and carbon sequestration that is monitored and reported over time. Authorized ITMOs allow countries to invest in projects that reduce emissions in developing countries.