Carbon Credits

The carbon credit stands out as an important mechanism that encourages environmentally friendly practices and helps balance carbon emissions. So, are you ready to explore the details behind this concept and why it is so important for businesses? If so, let’s closely examine the role of carbon credits in the business world and discover how they can impact the future of environmental sustainability.

What is a Carbon Credit?

A carbon credit is a financial commitment obtained as a result of projects that reduce or balance the emission of greenhouse gases into the atmosphere. These projects typically involve investing in renewable energy sources, increasing energy efficiency, supporting forest conservation projects, or operating in sustainable development areas. Carbon credits are obtained as a result of successfully implementing such projects and reducing carbon emissions. 

What Are the Types of Carbon Credits?

Certified Emission Reductions (CERs)

Certified emission reduction credits originate from projects approved by the United Nations Framework Convention on Climate Change (UNFCCC). These projects form the basis of the Kyoto Protocol and generally occur in less developed countries.

Clean Development Mechanism (CDM)

CDM is a type of carbon credit obtained from projects carried out as part of the UNFCCC. These projects typically aim to promote sustainable development in developing countries.

Forest Carbon Credits (FCCs)

Forest carbon credits are credits generated from forest conservation projects. These projects may include the conservation of forest areas, restoration, or sustainable forestry practices.

Bioenergy Carbon Credits

Bioenergy credits refer to credits derived from bioenergy projects. These projects generally involve biomass energy production or the operation of bioenergy facilities.

Energy Efficiency Carbon Credits

Energy efficiency credits include credits obtained from energy efficiency-enhancing projects. These projects typically promote energy savings in industrial facilities or buildings.

Marine Biomass Carbon Credits

Marine biomass credits refer to credits derived from projects that protect marine ecosystems and enhance the carbon absorption of organisms such as seaweed.

Direct Air Capture (DAC) Carbon Credits

DAC projects include technologies that directly capture carbon dioxide from the atmosphere. These projects typically focus on air carbon absorption and storage.

Voluntary Emission Reductions (VERs)

These credits are based on the reduction of carbon emissions that occurs with the initiation of a specific project. These projects are generally certified and verified by independent organizations.

Ways to Acquire Carbon Credits

When businesses or individuals consider acquiring carbon credits, they must follow specific steps. First, it is important to identify carbon footprints and determine which projects to invest in. Then, certified projects should be preferred, and the certification processes of these projects should be checked. There are two main ways to acquire carbon credits: investing directly in projects or purchasing already existing credits. Finally, a strategy should be developed regarding how the credits will be used and how their impacts will be monitored.

Calculating Carbon Credits

The process of calculating carbon credits is quite complex and depends on many factors. In calculating the carbon credit, factors such as identifying zero-carbon activities, assessing energy usage, calculating supply chain impacts, and investing in zero-carbon projects are considered. This allows businesses or individuals to determine their carbon footprints and calculate the necessary carbon credits to balance that footprint.

CarbonSmart

With CarbonSmart, the process of carbon credit administration is much easier. We advance your process together with our expert team and the platform with verifiable data in our strategies regarding carbon credits. To get in touch, click here.