The voluntary market has expanded rapidly in recent years. As the name implies, there is no element of compulsion in the voluntary market. Its evolution has been shaped largely by increasing demand from companies, organisations and individuals seeking to mitigate the negative consequences of their own greenhouse gas emissions.
What is voluntary emissions offsetting?
The carbon dioxide emitted by organisations and individuals as part of their business or personal activities is known as a ‘carbon footprint.’ While a carbon footprint cannot generally be reduced to zero, it is possible to limit the impact of CO2 emissions by offsetting. This is the act of compensating greenhouse gas emissions by purchasing credits from offset projects, often from the developing world.
Project standards and partners
There are a number of industry approved standards and methodologies used in the market for emission reduction certification. At RWE Supply & Trading Switzerland S.A., we have selected three standards that meet a wide variety of purchasing rationales:
1. Clean Development Mechanism (CDM) projects
CDM projects are developed under the United Nations Framework Convention on Climate Change (UNFCCC) treaty and are hosted in developing countries. These projects generate Certified Emission Reductions (CERs).
CDM projects produce very transparent and credible offsets. In order to obtain the CDM status, projects are rigorously assessed by the host country, the UN and independent assessors accredited by the UN.
2) Gold Standard Foundation (GS) projects
Gold Standard provides a high quality carbon credit label and sets a clear and independent standard. We actively source projects that have been approved by the Gold Standard Foundation. These focus on additional social, economic and environmental benefits to the communities where those projects operate.
We are proud of our sponsorship of the Gold Standard Foundation. This organisation is backed by over 60 NGOs, the most prominent of which is WWF. The Dutch Ministry of Housing recently voted Gold Standard the best voluntary certification on the market.
We have pledged to build up and maintain a carbon credit portfolio with a significant number of carbon credits registered under the Gold Standard. We have pledged that 51% of our total portfolio for sale on the voluntary carbon market should be made up from Gold Standard credits by 2010.
3. Voluntary Carbon Standard (VCS) projects
VCS projects are voluntary initiatives to reduce emissions both in developed and developing countries. These projects generate Voluntary Carbon Units (VCUs). VCS procedures are similar to the CDMs, but are less lengthy and costly and therefore appropriate for smaller offset projects. Many projects which are already operational, but have yet to obtain CDM registration, can claim VCUs.
The VCS standard also represents an effective way to promote emission reductions from technologies not yet formally certified under emission trading schemes. The VCU is the most traded carbon credit type in the world.
Contact us if you are interested in a voluntary project or would like to trade emissions credits: carbon@rwe.com
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