December 2022
Recent research has shown that we are on track for a significant shortfall between demand and supply of carbon credits eligible for use under the SA carbon tax’s Carbon Offset Administration System (COAS), which will average 100 million credits across each trading phase until at least 2030.
In short, this means that the market is ripe for development of new carbon projects. If you are wondering whether your project could generate carbon offset revenue there are a few key questions to ask:
- Is there a Methodology? – Carbon standards, such as Verra and the Gold Standard, develop methodologies against which projects can be assessed. If a methodology does not exist for your project type, the costs can become prohibitive to develop a new methodology for your project, in order for verified credits to be issued.
- Is there quality data? – Carbon credit issuance is data intensive. An effective Monitoring and Evaluation structure must be in place to support the project’s claims to emission reductions.
- Additionality – without the intervention of carbon finance, the carbon project could not have gone ahead. What does the required carbon finance enable that would not have happened otherwise?
- Is the scale sufficient? – for most projects, the cost to set up the carbon issuance requires a scale of at least 20,000 tons of carbon avoided or sequestrated per issuance cycle to make them viable.
- When does commissioning take place? – projects that have already been commissioned can still begin to generate credits as long as they become registered within 2 years of their commissioning date.
If you know of projects that should be considered, based on the above mentioned criteria, or should you wish to find out more, please email us at: info@climateneutralgroup.co.za
