![]() Forestry projects are becoming the fastest growing category. This market is aided by certification programs that provide standards and other guidance for project developers to follow in order to generate carbon offsets.Ī variety of greenhouse gas reduction projects can be used to create offsets and credits. Within the voluntary market, demand for carbon offsets is generated by individuals, companies, organizations, and sub-national governments who purchase carbon offsets to mitigate their greenhouse gas emissions to meet carbon neutral, net-zero, or other GHG reduction goals. Since GHG reduction projects generate offset credits, this approach can be used to finance carbon reduction schemes between trading partners around the world. The goal is to allow market mechanisms to drive these sources towards lower GHG emissions. In these programs greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. One carbon offset or credit represents the reduction or removal of one ton of carbon dioxide or its equivalent in other greenhouse gases.Ĭarbon credits are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). Both offsets and credits are measured in tonnes of carbon dioxide-equivalent (CO 2e). a derivative of an underlying commodity) certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. A carbon credit or offset credit is a transferrable financial instrument (i.e. Renewable energy projects are the most common source of carbon offsets.Ī carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. For more information on carbon credits for individuals, see personal carbon trading. In addition to our investment in NBCF, we are separately supporting offset projects in Mexico aimed at improved forest management for future offset issuance.This article is about the use of carbon offsets and carbon credits for countries, corporations, and, in some cases, individuals. As of December 2022, implementation had already begun in three of the six countries. The NBCF’s initial project investment is in the Global EverGreening Alliance’s Restore Africa Programme, which aims to restore 1.9 million hectares of land, directly supporting 1.5 million smallholder farming families in six African countries - Kenya, Ethiopia, Malawi, Tanzania, Uganda and Zambia. This provides long-lasting and verified positive impacts for biodiversity and communities and offers investors the carbon credits it procures. Taking a landscape approach, the NBCF looks to invest in nature-based solutions projects that restore and conserve nature in developing economies. These include carbon credit funds such as Climate Asset Management’s Nature Based Carbon Fund (NBCF). We have initiated investments which will bank credits for future use in our offsets registry accounts, such as Verra's Verified Carbon Standard and the American Carbon Registry. The evaluation criteria for these projects emphasize the need for durability of the reductions or removals and leakage minimization, as well as community, conservation and biodiversity co-benefits to create and increase commercial value for the projects beyond our net-zero operational emissions ambition. Technology-based: relating to energy efficiency, fuel switching, abandoned well management, waste disposal and fugitive emissions reductions.Nature-based: relating to forestry and land use, wetlands, agricultural improvements and grasslands or soil enrichment.The invitations sought a variety of project types that could start issuing offsets by 2025, including those that are: ![]() In early 2022, ConocoPhillips sent invitations to prospective offset developers to propose investment opportunities for ConocoPhillips participation. ![]() ![]() While we do not anticipate the need to utilize offsets to achieve our medium-term targets and did not retire any voluntary offsets in 2022, we are investing now to build a bank of offsets for potential use and retirement in the future. Our preference will be projects in countries and regions in which we operate or have land holdings. This strategy includes developing a diversified portfolio of offsets from third-party projects and funds, as well as considering our own offset projects. Leveraging know-how from our experience in the compliance offset market, we have designed a flexible strategy to develop and purchase voluntary offsets, beginning in 2022. While operational emissions reductions will drive our progress toward our net-zero emissions ambition, ultimately offsets are likely to be required to mitigate residual, hard-to-abate emissions. ![]()
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