ICVCM CCP Labels: Proceed with caution on LFG projects

This past week we have seen organizations incorrectly identifying LFG projects as CCP eligible. In this blog, we provide information on why we cannot yet have clarity on exactly what is “in” versus “out.”

Last week, the Integrity Council for the Voluntary Carbon Market (ICVCM) announced the first project types eligible for the core carbon principle (CCP) label – one of those being landfill gas (LFG) projects. In our initial blog post on this announcement, we focused on some key integrity issues that projects eligible for this label face, including risks of non-additionality and an overestimated baseline. 

That said, we agree that this project type, along with ozone depleting substances (ODS), which was also deemed eligible by the ICVCM, fares better than the market as a whole. In fact, there is only one other project type that has received an A or A+ level from Calyx Global (nitrous oxide abatement) – after rating around 550 projects that comprise around half of all issuances in the past three years.

However, we also touched on some of the unknowns surrounding CCP-eligibility. This blog post delves further into our questions about the criteria for the CCP label in regard to LFG projects and discusses the trends we have noticed between the projects given the CCP label and our rating of them.

Will the ICVCM create “vintage” labels?

While at first glance the criteria for LFG eligibility may seem fairly straightforward, they raise some interesting questions, specifically regarding changes to projects over time. 

According to the ICVCM, eligibility for LFG projects is concerned with two main things: 

1. the version of the methodology applied, and 
2. the electricity generation capacity. 

This presents an issue as a project can update the methodology between monitoring periods or crediting periods, potentially changing its eligibility for the CCP label. For example, the CAR US Landfill Protocol version 6 that was approved was not published until June 2022, so any LFG projects under CAR that started before this time were originally implemented under an earlier version of the methodology. This begs the question:

• Does the project need to have been originally implemented under the approved version of the methodology, or is verification against the approved methodology at any time sufficient? 
• If so, for projects that update from an earlier version to the approved version of the methodology, will the credits issued throughout the project’s entire lifetime now be eligible? Or will the eligibility for the project switch for the monitoring periods verified under the approved methodology?
• In these cases, which (if any) credits are eligible for the CCP label: (a) All credits since the project, at some point, verified using a CCP eligible version of the methodology; (b) Only those credits issued under version 6 or later; (c) None of the credits since the project was initially registered under an earlier version methodology (that is not CCP eligible)?

These issues and questions also apply to projects using ACM0001 or AMS iii.G. under VCS or Gold Standard. 

Similarly, we have noticed that LFG utilization projects often increase their electricity generation capacity during the project lifetime, by adding more engines. Some even switch from exclusively flaring LFG to utilizing it to generate electricity with a capacity of over 10 MW. In addition to the questions raised above, this poses another scenario – how is the time period of eligibility determined if the capacity changes to above or below the threshold in the middle of a monitoring period?

Calyx Global has submitted these questions to the ICVCM and will keep our subscribers updated on any responses we hear.

CCP label exclusion for LFG does not mean lower quality

As noted in our first post and above, the ICVCM provided criteria for LFG projects to earn the CCP label, which seems straightforward and are listed below: 

• VCS projects using ACM0001 versions 15-19 or AMS-iii.G version 10
• Gold Standard projects using ACM0001 versions 15-19 or AMS-iii.G version 10
• ACR’s Landfill Gas Destruction and Beneficial Use Projects version 1-2
• CAR’s US Landfill Protocol version 6
• Exception:  LFG-to-electricity projects with capacity greater than 10MW

In our estimation, flaring or utilizing methane from landfills can generate higher quality credits – a point we raised as early as November 2022 in a blog we called “Wasted Potential.” Therefore, such credits are a good choice to receive the CCP label. However, the versions selected and the “exception” with regard to capacity generation do not necessarily correlate to higher quality. We analyzed a set of LFG projects – ones that do not have the concerns above – and have found that the methodologies and capacity do not make a material difference in our assessments of quality.

One issue is that, when an LFG project has >10MW capacity, it must undergo a more rigorous additionality test. This includes providing an investment analysis, which is not required by LFG projects under 10MW. We recommend that the ICVCM ensure that future decisions require stronger additionality procedures when deciding which credits can receive the CCP label.

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