A third of existing carbon credits have failed to meet the stringent criteria of a new global benchmark, casting doubt on the credibility of the voluntary carbon market
The Integrity Council for the Voluntary Carbon Market (ICVCM) has delivered a shock to the industry, revealing that around a third of existing carbon credits have fallen short of its Core Carbon Principle (CCP) standards. The credits, all linked to renewable energy projects, failed to demonstrate ‘additionality'—the crucial proof that the project would not have gone ahead without the financial incentive of carbon credit sales, reports Reuters.
Amy Merrill, ICVCM CEO, emphasised that renewable energy projects can still participate in the market, but they must meet the new, rigorous standards. She dismissed speculation about plummeting carbon credit prices, stating the council’s focus is on establishing an integrity threshold rather than predicting market fluctuations.
The ICVCM's assessment comes amid growing scepticism about the carbon offset market. Demand for credits plummeted last year following widespread doubts about their effectiveness in reducing emissions. The CCP standards were introduced to address these concerns and restore trust in the market.
With approximately 236 million unretired carbon credits impacted, the industry faces a significant challenge. Analysts predict further price drops for renewable energy offsets following the CCP failures.
Merrill concluded, “There are still regions where barriers hinder renewable energy deployment, making projects eligible for carbon credits. We encourage project developers to submit new methodologies for evaluation.”
The ICVCM’s decision is a watershed moment for the carbon market, forcing a reckoning on the credibility and efficacy of carbon credits.