The CarbonNeutral Protocol Index

Requirements/recommendations

The subject’s GHG emissions must be reduced to carbon neutral for the duration defined within the CarbonNeutral® certification. As illustrated by Figure 5, this may be achieved through a combination of internal abatement measures and external environmental instruments.

Requirements/recommendations covering internal emissions reductions

For all subjects, the client should action a GHG abatement plan to deliver internal emission reductions, taking into consideration the main sources of GHGs from the subject and the likely cost-effectiveness of alternative emission reduction actions. In the case of one-off subjects, such as events, this should entail consideration of emission- minimising measures during the planning phase.

In all cases, the methodology used to quantify internal GHG abatement should be the same as that used to quantify the subject’s original GHG emissions.

GHG abatement plans should be reviewed periodically to assess progress against planned actions and to assess the feasibility for further reductions, taking into account the availability of new technologies, enabling policies and incentives provided by government, and the overall business context. Where applicable, a director or senior manager should be given responsibility for overseeing the development and ensuring the implementation of the plan for reducing emissions.

Figure 5: Reduction Measures to Achieve Carbon Neutrality

Requirements/recommendations covering carbon credits

Any carbon credit used towards the achievement of CarbonNeutral® certification must meet the following criteria:

Additional: Refers to an external emission reduction project from which emissions reductions are verified as carbon credits under an applicable carbon accounting standard. An emission reduction project is said to be additional when it can be demonstrated that in the absence of the availability of carbon finance the project activity would not have occurred (the “baseline” scenario); and, such baseline scenario would have resulted in higher GHG emissions. Each eligible carbon accounting standard under The CarbonNeutral Protocol provides tools for how additionality at a project level is tested and demonstrated. For further discussion of this topic, see Annex C.

Legally attributable: Carbon credits must have a clear record of ownership from project owner and thereafter.

Measurable: Emissions reductions are quantified relative to a transparent and robust baseline scenario using recognised, peer reviewed, published methods and project specific data; or, using recognised performance standard procedures.

Permanent: Emissions reductions are permanent. Where reductions are generated by projects that carry risk of reversal, adequate safeguards must be in place to ensure that the risk of reversal is minimised and that, if any reversal occurs, a mechanism is in place that guarantees the reductions will be replaced.

Unique: Emissions reductions are held and retired on a registry to ensure that no more than one carbon credit can be associated with a single emission reduction.

Independently verified: Emissions reductions are verified by an expert third party qualified to verify carbon credits to ensure the criteria above have been met.

Carbon credits certified under the standards set out in Annex C have been determined to meet the requirements above and therefore are qualified for use as an external environmental instrument to reduce a subject’s GHG emissions. Annex C is reviewed annually to ensure it reflects developments in best practice and the performance of carbon credit standards.

When carbon credits are used towards the achievement of CarbonNeutral® certification in advance of their verification and issuance (forward crediting), the client must be provided with a contractual guarantee of delivery or replacement.

Carbon credits must be retired within 12 months from the delivery or purchase of the carbon credits, whichever is the latter event. The CarbonNeutral certifier must retire sufficient carbon credits on behalf of organisations to achieve CarbonNeutral® certification. Alternatively, the certifier must receive full assurances from the party implementing retirement that retired credits are being applied to the Subjects/time periods and could not in any way be deemed to have been double counted.

Ex post carbon credits must be used for CarbonNeutral certifications. Ex ante credits which do not meet the requirements for forward crediting are not permitted for certifications.

Further considerations

Emission reduction projects have effects in addition to GHG emission reductions. Carbon credit standards accepted by The CarbonNeutral Protocol (Annex C) have requirements that material negative impacts should not arise from emission reduction projects.

For reasons laid out in Appendix 4.1, the following project types must not be used towards the achievement of CarbonNeutral® certification, although they are recognised under some carbon credit standards in Annex C:

  • Conventional (i.e. dammed/non run-of-river) hydro-electric power projects with an installed capacity greater than 20MW, unless a qualified independent third party assures compliance with the World Commission on Dams (WCD) sustainability criteria or equivalent assessment introduced by the underlying carbon standard (For example, in 2017, VCS (now Verra) consulted on the use of the Hydropower Sustainability Assessment Protocol as an alternative assessment tool with a view to setting guidance on the issue (see https://verra.org/call-for-public-input-hydropower- sustainability-assessments/).).
  • HFC-23 destruction projects and N2O destruction projects where N2O is the by-product of the industrial processes to produce adipic acid or nitric acid

The non-carbon accounting standards listed in Annex D are those designed to complement carbon credit standards to provide measurable and independently verified assessment of the positive environmental, social, and economic benefits of carbon reduction projects (also known as “co-benefits”). These standards should be used to evaluate and communicate the co-benefits of emission reduction projects.