The Integrity Council for the Voluntary Carbon Market (ICVCM), an entity established in 2021 by a consortium of international financiers, has recently approved three prominent certifiers in the voluntary carbon market: the Gold Standard, ACR (formerly known as American Carbon Registry), and Climate Action Reserve. These certifiers collectively account for over a quarter of the carbon credits traded globally. This approval allows them to use the ICVCM label, signalling higher trust and potentially boosting demand for the credits they verify.
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The Core Carbon Principles (CCPs) serve as a global standard for high-integrity carbon credits, establishing strict criteria for transparency and sustainable development. Formulated through contributions from hundreds of entities across the voluntary carbon market, the CCPs offer a reliable and stringent method for recognising high-integrity carbon credits that deliver tangible, verifiable benefits grounded in contemporary science and best practices.
Annette Nazareth, the chair of the ICVCM, expressed enthusiasm about this development, stating, ‘We are launching a new chapter for the voluntary carbon market: the CCPs set a global benchmark for high-integrity, building trust, increasing standardisation and making it easy for buyers to identify high-integrity carbon credits. This will help mobilise private capital at scale for projects to reduce and remove billions of tonnes of emissions that would not otherwise be viable and will channel investment to the Global South.’
Gold Standard's CEO, Margaret Kim, responded positively to its certification, appreciating the ICVCM's collaborative approach and confirming its compliance with the newly established high-quality threshold. Some major players still have to be certified; Verra, a dominant force in the market responsible for almost 70% of traded credits, is still under review. The ICVCM attributes this delay to the sheer volume of information that needs processing and anticipates a decision before May.
Read more: ICVCM launches core carbon principles for high-impact carbon credits
Further reviews are expected soon for other organisations such as ART, Social Carbon, and Isometric. The council also announced that it would be assessing methodologies covering more than 50% of the market's current volume by October. This gradual approach to evaluation and announcement is intended to provide clarity on which projects meet the stringent criteria for high-quality carbon credits.
Nazareth, speaking to S&P Global Commodity Insights, stressed the importance of these staggered announcements, explaining that a thoughtful, incremental approach helps maintain market stability and trust. ‘This is about doing it right and really going through a rigorous process. If the market understood that this was going to be done in batches, then there shouldn't be a really negative impact’, she noted.
The ICVCM's systematic approach is a response to past criticisms of the voluntary carbon market, which has faced questions regarding transparency and efficacy. By imposing rigorous standards and a transparent review process, the council aims to restore confidence and support higher prices for certified credits.
Read more: The voluntary carbon market's journey through 2023 and beyond
Market reactions have been cautiously optimistic. Analysts predict that the ICVCM's endorsement could lead to price stability and potentially higher prices for CCP-labelled credits, creating a more differentiated market. This strategic approach by the ICVCM is anticipated to significantly influence the future dynamics of the global carbon market, promoting greater transparency, reliability, and environmental integrity.
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