Vintage matters: a more rigorous carbon credit rating

Carbon projects are dynamic, and during any year of a project’s term there could be a change in conditions that alter additionality, Sustainable Development Goal impact or other factors. Having one rating for all credits produced over the lifetime of a project does not acknowledge that some of the project's credits have the potential to be more or less impactful. To recognize this variability, Calyx Global is introducing ratings by vintage.

Our ratings by vintage approach provides vintage-specific ratings for credits based on the year the emission reductions (or removals) ocurred rather than having one rating for the entire lifetime of the project. We provide vintage ratings for nature-based projects, cookstoves, waste, and renewable energy projects. A couple of examples are offered below:

1. REDD+: project funding and additionality. Some REDD+ projects begin as donor-funded programs with no intention to receive carbon revenues. However, they may at some stage require private funding in order to continue activities that keep forests standing. These projects sometimes “back-date” their crediting period to vintage years that were fully supported by other funding. The earlier years in such cases would incur higher additionality risks in our ratings system. This is consistent with the ICVCM’s core carbon principle of additionality, including its requirement for “prior consideration” of carbon revenues. 
2. Renewable energy: policy development & additionality. According to GS and VCS methodologies, renewable energy projects are assessed for additionality once at the start of each crediting period. This assessment generally includes a demonstration of financial additionality (i.e. evidence that the project would not be funded without the benefit of carbon revenue). However, over the course of the crediting period, new policies may arise to incentivize or even require renewable energy generation. These changes can affect a project’s additionality. To account for such variation, Calyx Global periodically updates a project’s additionality risks based on the development of new legislation and policy enforcement. Our rating approach in this regard is in line with the guidelines set forth by the ICVCM, which require reassessing additionality at least every 5 years.

These examples are but a few of the many conditions under which a project’s rating will vary by vintage year. We believe that ratings by vintage enhance the depth and reliability of project-level assessments, and are an important component of a high-quality rating. Current Calyx Global subscribers can learn more about how we assess the vintage of various project types here. If you’re interested in becoming a subscriber, contact us.