These validate the efficacy and sustainability of emission reduction projects. Projects with recognised certification meet the strict additionality, sustainability and transparency criteria that both we and our customers expect.

At Essent Trading, we have selected three standards that meet a wide variety of purchasing rationales.

1. Clean Development Mechanism (CDM) projects

CDM projects are developed under conditions set out in 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 generate very transparent and credible offsets. In order to obtain the CDM status projects are rigorously assessed by the host country, the UN and independent verifiers accredited by the UN.

2. Gold Standard (GS) projects

In addition to reducing greenhouse gas emissions, Gold Standard projects are required to bring social, economic and environmental benefits to the communities affected by them. In particular, projects should demonstrate that they create jobs and enhance the local economy. Gold Standard offsets are therefore highly credible.

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.