Published

22 November 2024

By

James Brown

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UK follows EU & US backing of high integrity Voluntary Carbon Markets (VCM)

The UK’s newly released Principles for Voluntary Carbon and Nature Market Integrity represent a significant step forward in leveraging voluntary carbon markets (VCMs) to lower global emissions, attract climate finance, and restore nature. These principles reflect a growing international trend toward creating structured, transparent standards for market participation.

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Key mechanisms underpinning these principles include the Greenhouse Gas Removal Standard and Nature Investment Standards, developed in partnership with the British Standards Institute. These frameworks aim to create measurable, transparent pathways for businesses to invest in carbon removal and nature restoration, ensuring credibility and scalability in addressing climate goals.

To meet its climate targets, the UK must more than double its annual investment in low-carbon sectors, increasing from £60 billion in 2023 to over £130 billion by the 2030s.

For businesses and investors, this underscores the urgency and opportunity in scaling up their contributions through credible carbon markets and aligned projects.

The principles are as follows:

  1. Use credits in addition to ambitious actions within value chains: Organisations should prioritise reducing their own (and their value chain) emissions and impacts before resorting to credits, ensuring that credits complement internal efforts.
  2. Use high integrity credits: Credits should meet high integrity criteria, including independent validation and verification, to ensure they deliver the claimed environmental benefits without causing social or environmental harm.
  3. Measure and disclose the planned use of credits as part of sustainability reporting: Organisations should transparently report their use of credits, including project details and how these relate to broader environmental goals.
  4. Plan ahead: Organisations are encouraged to set and disclose science-aligned long-term and interim targets to achieve net zero emissions.
  5. Make accurate green claims using appropriate terminology: Claims regarding environmental impact should be accurate and not misleading, using precise terminology.
  6. Co-operate with others to support the growth of high integrity markets: Credit buyers should collaborate with market actors to enhance standardisation, transparency, and equitable market access.

Together, these principles provide a roadmap for organisations to engage responsibly with voluntary carbon markets. By embedding transparency and collaboration into their strategies, businesses can maximise the credibility and impact of their climate actions.

For the first time, we are starting to witness an emerging uniformity in local carbon initiatives, in what has historically been a fragmented market. While this represents significant progress, the details of implementation remain critical.

The alignment of principles is promising, but a robust and reliable system of Monitoring, Reporting, and Verification (MRV) will be central to ensuring these goals are met effectively. This evolving standardisation signals a pivotal moment for the voluntary carbon market, creating new opportunities for corporates and investors alike.

At CFP Energy, we specialise in helping businesses unlock the full potential of carbon markets.

Whether you're seeking short-term access to high-quality credits or looking to co-invest in transformative projects, our team offers tailored solutions to meet your needs. We empower our clients to make confident, strategic decisions in this dynamic landscape.

Let us help you turn emerging opportunities into actionable results—contact us to explore how we can work together.

 

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