May 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 Voluntary Carbon Credit market trends (Starting this month, VCM Updates, which were previously published as a single article, will be released in two separate sections, A and B).
In April 2024, the Issuance of nature-based Credit projects remained low. This article will feature Civitas Resources (a U.S. oil and gas company), City of Logan (an Australian municipality), Boston Consulting Group (a consulting firm), and Chiesi Group (an Italian pharmaceutical company) as case studies, selected from companies with significant Retirement volumes in April.
From a project perspective, Indonesia's Rimba Raya project had the highest Retirement volume. The Rimba Raya project is one of the largest REDD+ projects, with 33 million tonnes of Credits issued to date. Many Japanese companies have procured and retired Credits from this project, but the industry is now in an uproar due to the Indonesian government's recent cancellation of the Rimba Raya license. This will be covered in Section B.
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«VCM Updates Structure»
A. Voluntary Carbon Credit Market Trends ← Subject of this article
- Credit Issuance and Retirement Analysis
- Project Pipeline Analysis
B. Trends in Major Overseas Regulations
A. Voluntary Carbon Credit Market Trends (Verra)
A-1: Credit Issuance and Retirement Trends
In April 2024, a total of 25.46 million units of Voluntary Carbon Credits were newly Issued and 14.17 million units were Retired across the Verra, Gold Standard (GS), Climate Action Reserve (CAR), and American Carbon Registry (ACR) registries. These represent +7% and +1% increases respectively compared to the same month last year.
Limiting to Agriculture, Forestry and Other Land Use (AFOLU) projects, 3.93 million units were Issued and 2.98 million units were Retired. These represent -75% and -13% decreases respectively compared to the same month last year.
The list of Verra projects Retired in April 2024 (AFOLU sector only) is as follows. The top 20 projects accounted for approximately 86% of the total Retirements. The first two projects (Rimba Raya and Katingan) are both REDD+ projects in Indonesia, accounting for 18% of the total Retirements.
The top 20 companies that Retired Credits in April 2024 are listed below. This list includes projects other than VCS and AFOLU.
The top two companies by Retirement volume were Civitas Resources (998,100 units from CAR, ACR, VCS) and Boeing (449,800 units from GS, ACR, VCR). The third was Boston Consulting Group (VCS only; since all Credits were from AFOLU projects, Boston Consulting Group is analyzed in the AFOLU section of the newsletter). City of Logan (GS, VCS) followed. These four accounts collectively accounted for approximately 27% of the total Retirements in April 2024.
Company Case Studies
Retirements by Civitas Resources
Civitas Resources is a U.S. oil and gas company that claims to be "Colorado's first carbon-neutral energy producer." According to Civitas' 2023 Sustainability Report, the company has maintained Carbon Neutrality since its formation from five separate oil and gas companies in 2021. The company aims to maintain Carbon Neutrality by first reducing emissions and then Offsetting its remaining Scope 1+2 Emissions annually. (Source, page 13)
The Sustainability Report makes no mention of its approach to Scope 3 Emissions. Scope 3 Emissions, in this context, arise from the combustion of products by vehicles and industrial activities. Local newspapers have strongly criticized this, pointing out that Scope 3 Emissions account for 85% of Civitas' total emissions, making Civitas' goal "largely meaningless" (Source). The same newspaper questions the validity of Civitas' sustainability claims, given its rapid expansion in Colorado.