Nitrous oxide abatement project insights

Tuesday, 04 Jun 2024

Nitrous oxide (N2O) abatement in nitric acid production projects only take up a small portion of the voluntary carbon market (VCM), but they have experienced significant changes since their inception. Their current status in the market is in flux with the development of Article 6.4 and the Integrity Council for the Voluntary Carbon Market Core Carbon Principles (ICVCM CCP) label review. This final blog in our initial Nitric Acid series digs into the evolution of nitric acid methodologies and their status today. 

Overview of nitric acid projects in the VCM 

N2O abatement in nitric acid production projects account for 0.1% of the total issued carbon credits in the VCM. To date, there are 118 registered nitric acid projects, many of which are no longer active. The first registered project was CDM 490, which began in 2006; the most recent project is CAR 1624, registered in 2023. 

Calyx Global recently hosted master’s students from Duke University Nicholas School of the Environment. One student created this GIS map, which displays a distribution of nitric acid projects worldwide (note: the map does not include all 118 nitric acid projects but focuses on projects that actively issue credits as of May 2024). China hosts the majority of the nitric acid abatement projects, followed by the United States. These two countries are the top two global nitric acid producers, yet neither country has very stringent regulations regarding nitrous oxide pollution. 

Nitric acid projects are registered on the UNFCCC Clean Development Mechanism (CDM), Climate Action Reserve (CAR), and Verra’s Verified Carbon System (VCS) registries. There are eight projects registered under CAR, nine projects on VCS, and 101 on the CDM platform. Many of the projects on CDM did not complete registration and have not issued credits. Together, the VCS and CAR registries have issued around 19,295,000 credits as of May 2024. About 17.7 million credits have been issued on the CAR registry and 1.5 million on the VCS registry. Of the total amount of carbon credits issued, about 90% have been retired. 

Evolution of nitric acid projects in the voluntary carbon market 

There are four N2O abatement in nitric acid production methodologies. The first methodology developed was AM0034, approved by the UNFCCC in 2006. Most nitric acid projects are registered under this methodology. This methodology came under scrutiny for its potential to inflate baseline emissions and was subsequently replaced by ACM0019 in 2013. The third CDM methodology, AM0028, is still valid. Climate Action Reserve released its first version of the US Nitric Acid Production Protocol in 2009. This methodology is on its fourth version and is still active. See the distribution of projects registered under various methodologies in the Table below. 

At the moment, Calyx Global has not rated any CAR nitric acid projects because there is not sufficient information in the public registry to allow for a robust assessment. If these changes and sufficient data are made publicly available, we will provide ratings for such projects. If a project voluntarily uploads additional information to the CAR registry, it will become eligible for a rating. There is a minimum amount of information we require for ratings, which we wrote about in another blog.

Where do nitric acid projects stand today? 

As of 2020, N2O abatement in nitric acid production projects paused issuances under CDM and VCS. Despite their issuance status being on hold, several developments are occurring in the market that may affect nitric acid projects, including under the ICVCM and the UNFCCC. 

The ICVCM is currently assessing the Climate Action Reserve’s US Nitric Acid Production Protocol for a CCP label. The older methodologies, AM0034 and AM0028, are deprioritized for the CCP assessment. It is unclear whether ACM0019 is currently being assessed. It is likely that older methodologies will not resume issuances and become legacy projects in the market. 

CDM projects were invited to request a transition to Article 6.4. Several nitric acid projects have done so and were approved for the transition, although Article 6.4 negotiations continue under the UNFCCC. The nitric acid facility of a project that requested a transition to Article 6.4 was sanctioned by the United States and the European Union for possible links to terrorism. This serves as a reminder that not all projects eligible for Article 6.4 and CCP labels will have high integrity. Individual project assessments are always key to understanding quality. 

For our subscribers: Read more about the differences in nitric acid methodologies in our subscriber-only blog post. Subscribers can also read more about the sanctioned CDM project and the full details of two CDM projects that requested a transition to Article 6.4 on the Calyx Global platform. 

About the author

Calyx Global

This article includes insights and input from multiple experts in Calyx Global.