November 2024 VCM Updates: Section A
This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.
This is a newsletter from sustainacraft Inc. This article covers Section A (Market Trends) of the VCM Updates (Voluntary Carbon Market Updates).
«VCM Updates Structure»
A. Voluntary Carbon Credit Market Trends ← Covered in this article
Credit Issuance, Retirement, and Investment Trend Analysis
Project Pipeline Analysis
Detailed Analysis Section
Investment in Nature-based Projects
Credit Retirement Corporate Case Studies
Project Pipeline Case Studies
B. Trends in Major Overseas Regulations
Introduction
On Credit Issuance, Retirement, Investment Trends, and Project Pipeline Trends
Regarding retirement trends, while Gold Standard's (GS) share slightly increased this month, Verra's Verified Carbon Standard (VCS) continues to account for the majority. Issuance trends remain unchanged from last month, with an observed increase in the share of registries other than VCS, specifically GS, Climate Action Reserve (CAR), and American Carbon Registry (ACR). In terms of investment in nature-based projects, Nike has announced an initiative in Oregon in partnership with a real estate company.
For new pipeline projects, the trend of projects generating Removal Credits under Verra's VM0047 (Afforestation, Reforestation and Revegetation), VM0042 (Agricultural Land Management, including regenerative agriculture), and VM0033 (Mangrove afforestation) continues from last month. It is also notable that multiple projects utilizing Gold Standard's new Alternate Wetting and Drying (AWD) methodology for rice paddy methane reduction are emerging. Many Project Developers are considering transitioning to standards other than Verra, and it is crucial to continue monitoring pipeline trends.
About Buyer Use Cases
For Credit Retirement Buyer use cases from last month (October 2024), this article primarily introduces Chanel and Mango from the fashion industry. It also briefly touches upon ENGIE, which was covered last month, and Yamato Transport, which had a significant volume of retirements, though not from nature-based projects.
The fashion industry accounts for 2-4% of global Greenhouse Gas (GHG) emissions, and efforts to reduce GHG emissions within the industry are gaining attention. For instance, in 2018, the "Fashion Charter" was launched by the UNFCCC to provide a pathway for the industry to achieve Net Zero by 2050.
At one point, companies in the fashion industry actively promoted carbon neutrality claims through the use of Offsets. However, due to increased Greenwashing criticism and regulations, mainly in Europe, they have now become more restrained in making carbon neutrality claims using Offsets.
Against this backdrop, this article will explain the Credit Retirement activities of Chanel, a luxury fashion brand that does not explicitly mention Offsets, and Mango, a fast-fashion brand that actively states its use of Offsets.
A. Voluntary Carbon Credit Market Trends (Verra)
A-1: Credit Issuance, Retirement, and Investment Trend Analysis
- Registries Analyzed: Verra, Gold Standard (GS), Climate Action Reserve (CAR), American Carbon Registry (ACR)
- Period: October 2024
- Note: Please be aware that real-name registration of retiring companies is not mandatory for registries, and therefore, accuracy cannot be guaranteed. Also, there may be delays in reflection to registries, so please note that the number of projects or status changes for this period may vary in the future.Issuance and Retirement figures for the target period are as follows (figures in parentheses indicate year-on-year change):
- Issuance: 20.75 million (+23%), of which nature-based: 3.92 million (+71%)
- Retirement: 13.81 million (+52%), of which nature-based: 3.50 million (+66%)
<List of Issued Projects>
Below are the top 10 projects for which Credits were issued during the target period.
<List of Retired Projects>
Below is a list of the top 10 nature-based projects with the most retirements during the target period.
<List of Retiring Entities>
Below are the top 10 entities that retired Credits from nature-based projects during the target period.
<Investment Trends in Nature-based Projects>
- Period: October 2024
- Note: We highlight investments in nature restoration, REDD+, and nature-based Carbon Dioxide Removal (CDR) projects. Also, "Credit Volume" and "Investment Amount" may be future estimates.In October, there were various investments in CDR Carbon Credits, but only the following single significant investment in nature-based solutions:
A-2: Project Pipeline Trends
Registries Analyzed: Verra, Gold Standard (GS)
Period: October 2024
Note: Please be aware that there may be a slight time lag in reflection to registries, so the number of projects or status changes for this period may vary in the future.
Terminology: Annual ER refers to the annual Emission Reduction / Sequestration volume (tCO2e).This section first introduces new pipeline projects and then reviews significant changes in last month's pipeline that were not reflected in the previous newsletter.
<This Month's Pipeline>
The pipeline includes a total of 29 projects of all types. For nature-based projects, the following 11 are included. In this issue, we introduce VCS-5289, a grassland restoration project in Uruguay, with an estimated annual Emission Reduction of 290,944 tons.
<Key Changes in Last Month's Pipeline>
In last month's newsletter, the September pipeline included 11 Natural Capital projects. Following the latest data update, 5 new projects have been added.
In this issue, we analyze VCS-5283, an Improved Forest Management (IFM) project in Indonesia with an estimated annual Emission Reduction of 1 million tons.
A-3: Detailed Analysis Section
This section provides a more detailed explanation of some of the Buyer and investment projects, as well as pipeline projects, introduced above.<Investment Trends in Nature-based Projects>
This section introduces information regarding investments in nature-based projects that were announced last month.