Looking to verify your energy project to generate carbon credits? Understanding two popular verification registries

Verification, or certification, methodologies are voluntary standards that provide procedures for quantifying the greenhouse gas (GHG) reduction benefits of a product or project.  For entities seeking to mitigate their carbon footprint, verified methodologies ensure credibility, provide guidance on project development, set baselines, assess additionality (explained below), and ultimately quantify GHG emission reductions. 

In this alert, we summarize two methodologies: VERRA and Gold Standard. 

VERRA

Methodologies

VERRA (founded in 2007 and formerly known as the Voluntary Carbon Standard) is a US-based organization that was developed by environmental and business leaders to provide greater quality assurance in voluntary carbon markets. Due in part to qualitative standards, VERRA projects and the resulting Verified Carbon Units (VCUs) are now recognized as a leading token in voluntary carbon markets.

VERRA has multiple categories of approved methodologies.  As an example, under the “energy” category, the available methodologies include:

• New Cogeneration Facilities Supplying Less Carbon Intensive Electricity to Grid and/or Hot Water to One or More Grid Customers
• Weatherization of Single Family and Multi-Family Buildings
• Calculating Emission Reductions from Jet Engine Washing
• Energy Efficiency and Solid Waste Diversion Activities within a Sustainable Community
• Fuel Switch from Gasoline to Ethanol in Flex-Fuel Vehicle Fleets
• Transport Energy Efficiency from Lightweight Pallets,
• Campus Clean Energy and Energy Efficiency
• Revisions to AMS-III BC to Include Mobile Machinery
• Methodology for Installation of Law-Flow Water Devices, and
• Methodology for Installation of Hight Efficiency Firewood Cookstoves.

Developing a methodology

If a project does not fit within a current methodology, project developers may develop a methodology through VERRA’s methodology approval process (MAP).  Under MAP, proposed methodologies are reviewed, assessed and validated by an approved third-party validation/verification body (VVB). This process includes a public consultation component.

The basic steps of the MAP include:

• Methodology developer prepares and submits a methodology concept note.
• VERRA reviews methodology concept and accepts it into the full MAP, if it meets evaluation criteria.
• After the concept note is accepted by VERRA, the methodology developer prepares and submits documentation.
• VERRA reviews methodology.
• VERRA conducts 30-day public consultation.
• VERRA contacts VVB to assess the methodology and produce an assessment report, and methodology developer pays VVB directly.
• VERRA reviews documentation and assessment report.
• VERRA approves methodology for use if it meets all VCS Program requirements.

GOLD STANDARD

Gold Standard, established in 2003 by the World Wildlife Fund and other international NGOs is another global benchmark in voluntary carbon markets. Gold Standard has found success by setting requirements for project design, quantification of GHG reductions, and reporting standards with a focus on achieving environmental integrity while contributing to sustainable development and benefiting local populations. As a result, and similar to VCUs, the credits earned by Gold Standard projects (either Verified Emission Reductions, VERs, for emission reductions, or Certified Emission Reductions, CERs, for meeting compliance targets) have increased relative value within international compliance markets.

Certifying a project to Gold Standard

Although there are similarities between the VERRA and Gold Standard processes, they are not the same.

Project planning and stakeholder consultation

At the outset, Gold Standard project developers must assess projects against program safeguards to ensure climate and sustainable development impacts are addressed.  Using this information, the project developer prepares a Key Project Information note and holds a Gold Standard Stakeholder Consultation Meeting. 

Activity requirements and/or associated impact quantification methodologies 

Like VERRA, Gold Standard has predetermined activity requirements and associated impact quantification methodologies.  In general, the activity requirements and/or associated impact quantification methodologies are connected to renewable energy activity, land use and forest activity, and sustainable urban development.  If there is no activity requirement for the project type, then the project may seek to have its project approved following the Principles & Requirements guidelines. 

General eligibility criteria

The following General Eligible Criteria apply to projects seeking Gold Standard Certification:

• Projects must include physical action or implementation on the ground.There are pre-identified project types that contribute to climate security and sustainable development and demonstrate clear and direct contribution to SDG.If these methodologies do not fit the project, there is a process to have a methodology approved called the Impact Quantification Methodology approval procedure.
• Projects need to be measurable and scalable to avoid double counting of generated carbon credits.
• Projects must comply with the applicable host country’s legal, environmental, ecological and social regulations and provide clear contact and full legal ownership, including any third-party beneficiary, details.

Gold Standard impact quantification methodology approval procedure

If a project is submitted under an approved certification standard (i.e. VERRA or other recognized standard) the project may apply for fast track approval. Otherwise, the approval procedure for methodologies that fall outside of Gold Standard’s approved methodologies includes the following steps:

The first step is a preliminary review by SustainCERT, a third-party company that uses technology to review and measure the environmental impact of a proposed project.

The second step is preliminary design approval. The approval of the preliminary design by SustainCert results in Gold Standard Project Listed status, giving the project the go-ahead to move forward.

Next is a third-party validation.  This is an independent assessment conducted by an accredited validation/verification body (VVB).  This consists of both a desk review and field visits to confirm the project meets Gold Standard requirements.

To move to the fourth step, in which the project design is reviewed by SustainCERT, the project must submit (a) a validation opinion from the VBB; (b) the VVB approved PDD SustainCERT documentation and all relevant supporting documentation; (c) a VVB Final Validation Report; and (d) a $1000 Design Review Fee.

Once approved, the project receives a Gold Standard Design Certification status. 

The project is then monitored to maintain the certification status, which includes (among other things) annual reports, third-party validations, and performance reviews by SustainCERT. 

As you move toward verification

The verification or certification of a project helps to positively address climate change while generating value to the project.  DLA Piper’s Commodities Group can assist in helping you to verify or certify your project, whether it is in energy, organic waste, forests, or any sector capable of demonstrating GHG reductions.  Please email DLAPiperCommodities@dlapiper.com for any questions and comments regarding this Commodities Alert.