ICVCM decision aligns with Calyx Global assessments of renewable energy projects

The ICVCM has not approved a number of renewable energy methodologies from existing GHG crediting programs as eligible for Core Carbon Principles (CCP) labels. Recognizing the potential of renewable energy projects, the ICVCM has extended an invitation to carbon crediting programs to update their methodologies. By doing so, these standards/programs can enhance their integrity and potentially become eligible for the CCP label in the future.

Calyx Global has consistently emphasized the need for rigorous standards and integrity in GHG crediting. The decision by the ICVCM aligns with our analyses of renewable energy projects, specifically large- scale hydropower, solar PV and wind, reinforcing the need for continuous improvement and higher standards in renewable energy methodologies. To date, we have 140 ratings of renewable energy projects and the majority have received relatively low GHG integrity scores, as illustrated below.

Out with the bad…

In November 2023, Verra itself decided to exclude several REDD methodologies (and one cookstove methodology) from its application to the ICVCM. Together with the recent decision by the ICVCM Board to exclude renewable energy credits, around two-thirds of the current market will not receive the CCP label. 

Calyx Global has generated over 370 ratings for credits that have been declared either eligible or ineligible for the CCP label. Among the projects we have rated that fall into these categories, there have been approximately 740 million credits issued. The graph below provides the percentages of issuances that fall into our different rating categories, from A to E.

The ICVCM (and Verra itself) have excluded a large majority of poor quality credits from receiving the CCP label. While difficult, these decisions offer the most promising path forward that we have seen to date. If the market responds, we could see the VCM turn a corner. 

Protecting the world’s remaining forests and scaling up renewable energy are critical for a climate-friendly future. However, carbon finance will only scale if the vast majority of credits in the market represent the emissions avoidance or removal they claim. This requires a correction that we believe the ICVCM is well placed to support – and it appears, so far, that they are holding to their motto: “Build integrity, and scale will follow.”

For more on earlier ICVCM decisions, read "ICVCM announces first CCP labels: LFG and ODS."