Voluntary carbon market Core Carbon Principles to be released 'next week': ICVCM participant

The Voluntary carbon market Core Carbon Principles and Assessment Framework are set to be released the week of March 27, Jeff Swartz, the vice president of Low Carbon Strategy at BP and a participant at the Integrity Council for Voluntary Carbon Markets, said at the North American Carbon World Conference in Anaheim March 23.

"[The full document] is set to be released next week and going to be over 300 pages," Swartz said.

The release of the CCPs from the ICVCM have been delayed repeatedly, with the complexity of ensuring a "quality" metric in the voluntary carbon market proving to be a major source of contention.

The announcement came on the last panel of the day as the two-day conference drew to a close.

The ICVCM grew out of the Taskforce on the Scaling of Voluntary Carbon Markets in 2020 and 2021 and was first announced at COP 26 in Glasgow in November 2021. The report is the culmination of a long journey to define a global standard around voluntary carbon market credit quality.

Outstanding concerns about what constitutes a carbon credit of "high quality" has frustrated development and trading in the market since its inception but has escalated over the last several months amid increased attention globally. Potential demand for voluntary carbon credits has ratcheted up in the last several years due to the uptake for corporate decarbonization targets.

The Guardian and Die Zeit published a report Jan. 18 criticizing carbon credit issuances for Voluntary REDD+ projects that had a significant impact on the market. Platts CNC, which reflects the most competitively-priced nature-based carbon credits, has dropped 27% since then, according to data from S&P Global Commodity Insights.

After years of growth and a record year in 2021, there was a slowdown in both issuances and retirements in the voluntary carbon credit market. Retirements contracted 7% year on year and issuances dropped 21%, S&P Global data showed.

The question of how to best determine and measure voluntary carbon credit quality was a major talking point at the NACW, with opinion somewhat split on whether or not the CCPs could adequately address market concerns about the integrity of voluntary carbon credits.

"If 99% of the projects do not qualify under this, then it won't be a very useful construct," Guy Turner, founder of CEO of Trove Research, also on the panel March 23, said.

Central to market concerns are fundamental questions about whether or not individual carbon credit projects meet the central principles of the voluntary carbon credit market, particularly additionality, and permanence. This has had a particular impact on the Nature Based Solutions space that often struggles with concerns around proving additionality in avoided deforestation.

At issue are Nature-Based Avoidance projects, in particular voluntary REDD+ projects, which rely on methodological baselines to demonstrate risk of deforestation by geographical area. This is often difficult to prove and measure given its reliance on a counterfactual, and has been subject to particular criticism.

"While more clarification from industry stakeholders -- like the membership of the ICVCM -- is welcome, it fundamentally remains a voluntary market, and the potential role of governments in this area is still yet to be determined," said Roman Kramarchuk, the head of Future Energy Analytics at S&P Global.

In questions, Swartz added that "kinks will need to be ironed out" and welcomed feedback on the eventual release.