September 2024 Methodology Updates (2/n)

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. Methodology Updates is a series that covers Carbon and Biodiversity Credit Methodologies. This time, we introduce Verra's recently developed new Additionality Assessment Tool.

Regarding the discussion on Credit quality, our newsletters have mainly focused on the over-Issuance of Credits due to arbitrary Baseline setting (Reference 1, Reference 2, Reference 3), but Additionality is also an important perspective when discussing quality1. What Additionality claims is that GHG Emission Reductions / Removals occurred in the project area because the Carbon Credit mechanism existed, and the Credits generated from that project are directly related to climate change mitigation effects. Therefore, for a project to be additional, it is a necessary condition for the Issuance of Credits not to be, so to speak, Greenwashing.

Until now, CDM Additionality tools have primarily been used, but they often did not function effectively, and cases where Registered projects were suspected of having Additionality issues were frequently observed. However, Additionality is a key point in achieving IC-VCM CCP eligibility, and understanding Additionality is essential for discussing high-quality Credits in the future.

In this newsletter, by introducing Verra's new Additionality tool draft published last month, we hope to provide an overview of the Additionality assessment concept.

With this revision of the Additionality tool, many projects that were previously considered "additional" are likely to no longer be recognized as additional under the revised Additionality tool. Especially in NbS, there have been multiple cases of commercial afforestation projects involving single tree species with logging, which we believe should not have been recognized as additional. Such projects, as well as afforestation projects involving native species with only partial logging, have been grouped together as "afforestation projects" and traded. Consequently, despite being OTC trades, their transaction prices have not significantly differed until now. With this revision of the Additionality tool, and its clear reflection in the CCP label, it is desirable that Credits from more costly projects, such as native species afforestation, will be properly priced.

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Verra's New Additionality Tool

(Source: Consultation: New VCS Tools for Additionality, Accessed: 2024/09/27)

Last month, Verra, with IC-VCM CCP compliance in mind, published a draft of a new Additionality assessment tool (hereinafter, 'new tool'), and announced that it would solicit public comments on it until September 23.

A report issued by IC-VCM in July 2024 stated that Renewable Energy Methodologies used in VCS (of which there are several, all from CDM) were not deemed CCP eligible2. One of the reasons for this non-eligibility was identified as issues with the CDM Additionality tools. As IC-VCM recommends in the report that Methodologies be revised to meet the requirements of the CCP Assessment Framework, Verra's recent announcement is considered a response to this.

Going forward, the new tool is expected to replace the following CDM tools: