March 2025 Methodology Updates (1/n)
This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.
Sustainacraft Inc. Newsletter.
Methodology Updates is a series dedicated to carbon and biodiversity credit methodologies. In this article, we introduce VCS's new rice methane methodology, VM0051 Improved Management in Rice Production Systems, v1.0, which was announced at the end of last month.
For inquiries, please contact us here.
Announcements: Two Webinars (3/25, 4/22)
We will be holding webinars next week and next month. In addition to the webinar on carbon credit supply potential, which we announced recently, we will also host a webinar on April 22nd explaining the draft of SBTi's Corporate Net Zero Standard Version 2, announced on March 18th. Please see below for details on each.
(1) March 25, 13:30~: Japan's Latest NDC and Carbon Credit Supply Potential Considering GX/ETS and SBTi
This was announced in a previous newsletter. Please refer to the registration page for details.
- Date and Time: March 25 (Tuesday) 13:30-15:00
- Registration: Register here
- Participation Fee: Free
- Capacity: 500 attendees (Zoom Webinar)
(2) April 22, 13:30~: Explanation of the SBTi Net Zero Standard v2.0 Draft
The Science Based Targets initiative (SBTi) has released a draft of its **Corporate Net Zero Standard Version 2.0**. This is the first major update, with revisions being considered from various perspectives, including Scope 3 target setting, the use of environmental attribute certificates (including Carbon Credits), the establishment of interim targets for removals, and measures to promote Beyond Value Chain Mitigation (BVCM).
Public comments appear to be open until **June 1, 2025**, so we will explain the revisions outlined in the draft to aid in submitting public comments.
- Date and Time: April 22 (Tuesday) 13:30-15:00
- Registration: Register here
- Participation Fee: Free
- Capacity: 500 attendees (Zoom Webinar)
* Please note that individuals (those without a company email address), competitors, similar companies, and those in the consulting industry may be declined. Please register using your company email address.
* After registration, a detailed email with a URL will be sent within a few days. If you have any questions or concerns regarding seminar participation, please contact press[at]sustainacraft.com.
Verra's New Rice Methane Methodology VM0051 (VCS)
(Source: Verra Releases New Rice Methodology, accessed March 13, 2025. Unless otherwise specified, image sources are from the linked document.)
Methane is a potent Greenhouse Gas (GHG) with a Global Warming Potential approximately 28 times that of Carbon Dioxide (based on 100-year cumulative warming effect), making its reduction extremely important for climate change countermeasures. Approximately 11% of anthropogenic methane emissions originate from paddy rice cultivation, with 90% of these occurring in Asia (Reference). Rice methane projects aim to reduce methane and other GHG emissions by altering rice cultivation practices. Particularly in Japan, significant Carbon Credit issuance is anticipated from projects utilizing the J-Credit methodology for extended mid-season drainage (AG-005), and Joint Crediting Mechanism (JCM) projects are being formed in Southeast Asia, making this a project type of considerable short- to medium-term interest.
In the Voluntary Carbon Market, CDM Methodologies were originally used for Alternate Wetting and Drying (AWD) activities, but VCS halted the use of CDM Methodologies from 2023 onwards. The VCS-specific Methodology, VM0051, announced this time, serves as a replacement. Requirements for proving Additionality and Monitoring have diverged from existing AWD methodologies. Regarding Additionality, an Adoption Rate of 20% is set as the threshold for common practice. If this rate is exceeded in a given region, the activity will not be considered additional. On the other hand, in the context of JCM, there have been many opinions raised regarding the significant burden of direct measurement using chambers for AWD implementation. In the newly released VM0051, model-based estimation is also permitted as an approach, aiming to reduce the burden of direct measurement.
So, will this impact JCM methodologies? While Voluntary Carbon Market methodologies are not expected to directly influence JCM methodologies, as Paris Agreement Article 6.4 methodologies are developed, they will take into account existing Voluntary Carbon Market methodologies. It is highly probable that Article 6.4 AWD methodologies will, to some extent, follow VM0051, which is the most recent AWD methodology, and in such cases, the gap between Article 6.4 methodologies and JCM (Article 6.2) methodologies will need to be considered. High-level standards for Article 6.4 have already been agreed upon (please refer here), and relatively stringent requirements for Baselines and Additionality are stipulated within these. Therefore, it will likely be necessary to consider how these requirements compare.
Background: Issues with Existing CDM Methodologies
The methodology commonly used for rice methane projects until now was CDM's AMS-III.AU.: Methane Emission Reduction by Adjusted Water Management Practice in Rice Cultivation Version 4.0 (hereinafter, "CDM Methodology"). This was widely used by VCS in the past, and Gold Standard's rice methane methodology also heavily relied on it. However, VCS completely halted the use of this CDM Methodology from 2023 onwards. While the background to this has been thoroughly explained in previous newsletters, we would like to briefly revisit it in this article.
Regarding the re-evaluation of rice methane projects using remote sensing technology:
Regarding the Request For Proposal (RFP) for creating new methodologies:
Verra invalidated the CDM Methodology for several reasons. Firstly, concerns regarding Additionality, Measurement, Reporting and Verification (MRV), and Leakage were raised, and an internal investigation confirmed several significant technical issues. Specifically, the following three points were identified:
- Insufficient guidelines for field stratification, making it difficult to properly classify farmlands with different characteristics. This hindered accurate quantification of Emission Reductions.
- Nitrous Oxide (N₂O) emissions and changes in Soil Organic Carbon (SOC) stock were not considered or measured, thus failing to ensure the accuracy of the overall Greenhouse Gas (GHG) Emission Reduction effect.
- Lack of standardized guidance for methane measurement, leading to inconsistent measurement criteria across projects and concerns about reduced Credit reliability.
In response to these issues, Verra decided to cease the use of the CDM Methodology in March 2023 (Reference).
In addition, it was found that the audit quality of several Validation/Verification Bodies (VVBs) responsible for auditing VCS projects that applied CDM methodologies was problematic. In response, Verra decided to temporarily suspend projects audited by these VVBs and conduct an overall quality management review. As a result, in August 2024, Verra announced an unprecedented response: it formally terminated 37 rice cultivation projects in China and imposed sanctions on the Project Developers and VVBs involved (Reference). The problems identified at that time primarily included:
- Insufficient proof of Additionality
- Incorrect classification as small-scale projects
- Overstated project area
- Insufficient evidence to support the implementation of Baselines and project scenarios
Furthermore, remote sensing data was effectively used in identifying the above issues.
Development of a New Methodology
To address the above issues, Verra began developing its own new rice methane methodology in December 2023. Its official version was released last month.
Compared to the CDM Methodology, the newly improved and introduced items this time are numerous and diverse. While many changes primarily focus on coordination with the existing Agricultural Land Management (ALM) Methodology VM0042, points directly related to resolving the aforementioned issues include:
- Enhanced methods for demonstrating Additionality
- Mandatory monitoring and quantification of N₂O emissions
- Introduction of safeguards to prevent SOC loss due to project activities
- Introduction of a "Dynamic Baseline"
- Expanded guidance on project area stratification and Emission Reduction quantification
In addition to these, the following points have been added as changes aimed at improving convenience for Project Developers and expanding rice methane projects:
- Addition of options for Emission Reduction quantification methods
- Expansion of eligible project activities
- Provision of Digital MRV (dMRV) best practices
Below, we will examine some of these in more detail, primarily comparing them with the CDM Methodology. We will also, where appropriate, highlight the differences with the JCM Philippines AWD Methodology (hereinafter, "JCM Methodology") announced in June 2024. The general trend appears to be that requirements have become more stringent or generalized in the order of their announcement (VM0051, JCM Methodology, CDM Methodology).