May 2024 VCM Updates: Section B
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 the newsletter from Sustainacraft Inc.
This article is part of a series covering major international regulatory trends, and this month we will cover the following three topics (starting this month, VCM Updates, which was previously published as one article, is now divided into Section A and B):
- SBTi announces plans for a major revision of the Corporate Net Zero Standard.
- Verra and ART announced as eligible programs under IC-VCM CCP.
- Indonesia's Rimba Raya project (Verra) has its concession license revoked.
The first point regarding SBTi is a follow-up to the recent discussion on the use of Carbon Credits and other instruments for Scope 3 Emissions, and SBTi's future plans have been announced. The key issue here seems to be what constitutes "Science Based" decision-making. The discussions in this context since last year seem to lean towards a behavioral economics and mechanism design perspective, examining how companies behave under various policies. In this regard, "evidence-based" might be a more fitting description than "science-based."
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«VCM Updates Structure (May 2024)»
A. Voluntary Carbon Credit Market Trends
- Credit Issuance and Retirement Analysis
- Project Pipeline Analysis
B. Major International Regulatory Trends ← Subject of this article
B. Major International Regulatory Trends
(1) SBTi Announces Plans for a Major Revision of the Corporate Net Zero Standard
(link)
Last month, we introduced this article titled "SBTi Issues Statement Suggesting Use of Environmental Attribute Certificates (Note: hereafter EAC), including Voluntary Carbon Credits, for Scope 3 Emission Reduction Targets." Regarding this topic, SBTi has announced its future plans. The summary is as follows:
- June 2024 (Q2): Call for Evidence on the effectiveness of EACs.
- July 2024: Presentation of a discussion paper on Scope 3.
- July 2024: Evaluation of evidence on the effectiveness of EACs in corporate climate targets (Part 1: Carbon Credits).
- December 2024 (Q4): Public consultation for the revised Corporate Net Zero Standard.
The key point here is SBTi's emphasis on "Science Based." A main point of discussion is how the use of EACs, including Carbon Credits, will affect corporate decarbonization. A Call for Evidence on this topic was launched in September 2023 (link). The submission deadline for this is November 24, 2024. Here, we would like to review the content from that time.