April 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.
This is a newsletter from Sustainacraft Inc.
Methodology Updates is a series focusing on carbon and biodiversity credit methodologies. This article explains the meaning of Article 6 and CORSIA labels that carbon registries attach to Credits.
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Introduction
As Paris Agreement Article 6 progresses and more registries are approved as suppliers of aviation Offset Credits under the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) scheme, various registries are affixing labels to Credits that are "assumed to be Corresponding Adjusted" or "deemed eligible under the CORSIA scheme." Although the names may vary slightly by registry, the former is generally referred to as an Article 6 label, and the latter as a CORSIA label.
However, in reality, many countries are still in the preparatory stages for Article 6, and the presence of an "Article 6 label" does not guarantee that Corresponding Adjustment will be implemented. Even for CORSIA Phase 1, where Corresponding Adjustment is mandatory, Credits with a "CORSIA label" are entering the market, but does this definitively indicate their usability under CORSIA?
The Issuance and management procedures and requirements for these labels vary slightly among registries. This article explains the meaning, attribution process, and requirements of Article 6 and CORSIA labels in major registries such as Verra / Verified Carbon Standard (VCS), Gold Standard, American Carbon Registry (ACR), Climate Action Reserve (CAR), Isometric, and Puro.earth.
Keyword: Article 6, CORSIA, Corresponding Adjustment, Article 6 label, CORSIA label
Understanding Article 6 and CORSIA Credit Labels
The Paris Agreement recognizes the use of Carbon Credits as a means for countries to achieve their Nationally Determined Contributions (NDCs). Specifically, Paris Agreement Article 6 provides a mechanism for internationally trading Credits that contribute to achieving these NDCs. This framework enhances the cost-effectiveness of Emission Reduction through market mechanisms, enabling countries to achieve Emission Reduction in more efficient locations outside their own borders. For Article 6-compliant transactions, Credits must have high transparency and meet standards to prevent Double Counting by participating countries.
Meanwhile, CORSIA, introduced as a measure for international aviation emissions, aims to stabilize CO2 emissions from international aviation based on 2020 emission levels for participating countries. Countries can trade certified Credits to Offset aviation sector emissions. Credits that comply with CORSIA requirements must meet the strict transparency and accounting standards set by ICAO.
Given this institutional background, registries have started affixing "labels" to Credits as a means to indicate which Credits are suitable for use in their respective NDCs or CORSIA. These labels serve as important indicators of scheme compliance, and their Issuance and management procedures and requirements vary by registry.