Carbon Credit Certification Process - What We Know So Far

chethan

ESG_Consultant_Mumbai - Dec 3, 2024
Many people asking about how to actually generate and sell carbon credits once market launches. Let me explain the process:

STEP 1: Implement emission reduction project

Could be renewable energy (solar, wind)
Energy efficiency improvements
Forest conservation/plantation
Methane capture from waste
Industrial process changes

STEP 2: Get project registered with approved certifying body

Need to prove "additionality" - project wouldn't happen without carbon finance
Establish baseline - what emissions would be without project
Define monitoring methodology

STEP 3: Third party verification

Independent auditor verifies actual emission reductions
Issues certificates for verified credits

STEP 4: Credits issued in registry system

Can then be traded on exchange

This is not easy or quick process. Takes 6-12 months minimum. Small projects often not economical due to certification costs.

chethan

RenewableEnergy_Dev - Dec 5, 2024
@ESG_Consultant_Mumbai thanks for explanation. As someone developing solar projects, few questions:

Can existing projects generate credits or only new projects?
Which certification standards will be accepted in India market?
What is typical cost of certification per project?
Can credits from one project be sold multiple times?

These details are crucial for project economics. Carbon credit revenue could make marginal projects viable.

chethan

ESG_Consultant_Mumbai - Dec 6, 2024
@RenewableEnergy_Dev good questions. Based on draft regulations:

EXISTING PROJECTS - difficult. Need to prove additionality. Most existing RE projects dont qualify since they would have happened anyway due to other policies/incentives.
STANDARDS - Likely to accept Verra VCS, Gold Standard, CDM methodologies. India may develop own standard also. Wait for final SEBI circular.
CERTIFICATION COST - Varies widely. Small project (few thousand tons CO2) might cost 5-10 lakhs for certification. Large projects 20-50 lakhs. Depends on complexity and monitoring requirements.
MULTIPLE SALES - NO! Each credit has unique serial number. Once retired/sold for compliance, its gone from system. Can't be reused. This is to prevent double counting.

For project developers, need to do cost-benefit analysis. If project generates 10,000 credits per year at Rs 1000 each = Rs 1 crore revenue. But certification, monitoring, registry costs also need to be deducted.

chethan

ForestryProject_Kerala - Dec 7, 2024
What about forestry-based carbon credits? We have community forest project in Western Ghats. Can we generate credits from forest conservation?

Forestry is more complex because:

Trees take years to grow and sequester carbon
Risk of fire, disease, illegal logging - "permanence" issue
Difficult to measure and verify carbon storage accurately
Leakage - if we protect one forest, deforestation might shift elsewhere

Anyone has experience with forestry carbon projects?

chethan

CarbonMarketExpert - Dec 8, 2024
@ForestryProject_Kerala forestry credits are indeed complex. Generally two types:

AFFORESTATION (planting new forests) - generates credits as trees grow
AVOIDED DEFORESTATION (protecting existing forests from being cut)

Challenges you mentioned are real. Certification requires:

Baseline study showing forest was at risk
Long term monitoring (20-30 years commitment)
Buffer reserves (some credits held back for risk management)
Community engagement proof
Biodiversity co-benefits documentation

Forestry credits often trade at discount to renewable energy credits due to permanence concerns. But they have higher social and environmental value.

For community forest project, suggest partner with experienced carbon project developer. DIY approach very difficult for forestry.