A carbon credit is an emissions reduction or emissions removal instrument verified by governments or independent certification bodies. It represents one metric tonne of reduced CO2 or its greenhouse gas (GHG) equivalent, emitted into the atmosphere. Carbon credits are transferable and can be used to offset carbon emissions generated by a company or individual.
There are two types of carbon credits available today:
• Reduction/avoidance credits - these reduce/prevent the emission of greenhouse gases into the atmosphere from ‘business-as-usual’ activities eg. deforestation, or reducing emissions from existing sources eg. using to low carbon alternatives like renewable energy.
• Removal credits - these remove carbon from the atmosphere through sequestration like afforestation, injecting carbon into underground rock formations or carbon capture and storage (CCS) technologies.
Project developers engage with third-party, independent certification bodies and auditors to validate and verify a project and its methodology. If the project passes the rigorous auditing processes and meets all the criteria from the independent certification body, the project can start to issue credits once the emissions reduction or emissions removal activity takes place.
After an organisation or individual buys a carbon credit, it has to retire the carbon credit to claim the emissions reduction under its name. This retirement is permanent and irreversible.
Climate Impact X will set up various digital platforms including the Marketplace, Auction and Exchange for buyers and sellers to trade with ease and safety. We apply a stringent set of quality criteria to all projects listed on our platforms and to members joining our platforms.
CIX charges an annual membership fee and a transaction fee on all transactions. To learn more about fees, contact our support staff.
CIX is a global platform for supply and demand of international carbon credits and environmental commodities. We are headquartered in Singapore to leverage the country’s internationally recognised financial, legal and commodities hub infrastructures, but serve customers from all over the world.
Carbon credits available on our platforms are verified by established international standards (e.g. Verra, Gold Standard, etc.). for climate mitigation as well as social and biodiversity impact. In addition, each carbon credit project is subjected to evaluation against a wide range of criteria including carbon attributes and project governance. We also take into account input from independent ratings, satellite monitoring and our international advisory council.
Click here to find out more about our view on high quality credits.
Scope 1 emissions are the direct emissions of a company’s operations and activities, such as process emissions or fuel combustion.
Scope 2 emissions are indirect emissions from purchased power, such as electricity, heat and cooling.
Scope 3 emissions come from upstream and/or downstream activities of a company’s supply chain. Upstream of a supply chain, bought materials, services and more contribute to Scope 3 emissions. The use of a product sold by a company contributes to the downstream Scope 3 emissions.
All scopes have to be covered and addressed for a company to claim a science-based climate target.
Science-based targets are typically defined as emissions reduction targets aligned with the Paris goals. These include keeping global average temperatures below 1.5°C above pre-industrial temperatures. To achieve this, the world needs to reduce emissions significantly and offset any residual, unavoidable emissions. A meaningful science-based target should cover Scope 1, 2 and 3 emissions.
Net-zero refers to a future status which companies commit to achieving. Net zero emissions are achieved when a company reduces their emissions as much as possible and offsets any residual, unavoidable emissions in the set target year. To achieve net zero, purchases of removal credits must fully neutralise unabatable emissions after reductions. Once the net zero target is achieved, net zero emissions must be maintained every year, through removals and avoiding rising emissions.
Carbon neutrality is a present-day claim that companies can make to the offset of current carbon emissions via the purchase of either avoidance/reduction or removal carbon credits. Claims can be made against the whole business or a certain a product or service.
At CIX, we believe that carbon credits should be used as part of a company’s holistic sustainability or climate mitigation strategy in complement to direct reductions in emissions. Carbon credits can be used to compensate for emissions that cannot be avoided or are not abatable. More literature on how to use voluntary carbon credits in a sustainability strategy, can be found here.