Monthly: Methodology Updates (June)

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 Sustainacraft Inc.'s newsletter. This Monthly Methodology Update will primarily cover topics related to VCS Methodology revisions announced in May 2023.

Monthly Methodology Update

This month's topics include:

• About VCU "Labels" (Verra)
• Minor Revision to VM0003 (Improved Forest Management) (Verra)
• Major Update (ver2.0) to Agricultural Land Management Methodology (VM0042) (Verra)
• Biodiversity Credit Methodology: PV Nature (Plan Vivo)

(1) About VCU "Labels" (Verra)

Around June 2022, discussions began regarding new "labels" to be applied to Verified Carbon Units (VCUs) issued by Verra. This initiative followed the Phase 2 report by the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), which proposed the necessity of additional attributes such as "Removal or Emission Reduction." Public comments were solicited around July 2022, and the review has now been completed, with Verra's responses published. Details of the public consultation can be found here.

The decisions for each label type announced are as follows:

• Reductions and Removals (Emission Reduction or Removal/Sequestration): Verra plans to launch labels that distinguish between Emission Reduction Credits and Removal Credits, along with related updates to the Verified Carbon Standard (VCS) program, during its next update, scheduled for mid-2023.
• Paris Agreement Article 6 Authorization: Verra plans to launch VCU Article 6 authorization labels and related VCS program updates in mid-2023.
• Activity Types and Sustainable Development Impacts: Currently, there are no plans to advance detailed activity type or sustainable development labels. Instead, future VCS program updates will improve access to detailed sustainable development and project activity data to address the diverse interests of stakeholders.

It appears that "Reductions and Removals" and "Article 6 Authorization" labels will be introduced soon. Here, we will briefly introduce the situation with other standards.

Regarding the third point, the SDG perspective: with Gold Standard, SDG numbers are already linked within the Credit Issuance transaction data published on their registry.

Furthermore, Improved Forest Management (IFM) projects generate effects that combine Emission Reductions and Removals. ACR announced an industry-first approach to distinguish Carbon Removal Credits from Emission Reduction Credits and, in response, stated that they have made it possible to differentiate between the two at the time of Credit Issuance.

From the Buyer side, as more companies are clarifying their selection criteria for Carbon Credit procurement, it is believed that the demand for clear labeling as described above is also increasing.