Carbon Credits

  1. Home
  2. Carbon Credits

Carbon Offset Credits, a definition

A Carbon Offset Credit identifies a reduction of emissions or a removal from the atmosphere of one tonne of carbon dioxide or an equivalent amount of greenhouse gases in terms of global warming potential (GWP).

Credits can be generated by activities that reduce or avoid emissions or remove greenhouse gases from the atmosphere, and certified projects and programs exists for such purpose. Some examples can be the construction of low-emission power plants, forestation and forests preservation, or the capture and destruction of greenhouse gases with a high global warming potential such as methane, nitrous oxide or HFCs.

What makes a credit reliable

The project which generated the credits could not have existed without the carbon credit market. For example, investments and projects that would be already profitable or convenient, as well as linked to regulatory obligations are not considered additional.
Evaluating a project's ability to generate carbon credits requires rigorous calculations, both in the initial estimates and during monitoring periods. In most cases, offset credits are issued only after greenhouse gases reductions or removals have already occurred and have been quantified and verified by third parties.
Since the carbon lifecycle lasts hundreds or thousands of years, offset credits must be associated to greenhouse gases reductions or removals that are equally permanent.
The same credit cannot be used more than once to offset emissions. Each credit must be uniquely identified and definitively assigned to a single entity once it has been withdrawn from the market.
The realization of a project aimed at the generation of carbon credits must not have harmful side effects for the ecosystem and the local communities, and it must always comply with the territory's legislation. For example, the creation of a hydroelectric power plant cannot force the population to relocate or negatively affect biodiversity.
Both governmental and non-governmental organizations have created standards, public registries and project certification processes that aim to ensure a correct estimate of generated credits and the traceability of their lifecycle.

Offset and credit retirement

The CO₂ Offset Program allows your company to offset emissions through the selection and retirement of credits from the carbon market and from international registries. A certificate is issued as proof of the retirement of the credits to offset emissions. In order to ensure transparency, traceability and uniqueness of credits, CO₂ Offset has implemented an offset register which reports the serial number of each batch of credits retired, data about the source project and the date of assignment to the organization.