Criteria for setting up an Offset project

How are Carbon Compensation Projects verified and validated?

Carbon Compensation Projects must comply with certain criteria and standards internationally recognized. They also need to be officially certified and periodically audited. The 4 main criteria are:

1 – Additionality

Projects are considered to be additional if they would have not occurred in the absence of a market for carbon credits. If they would have happened anyway, i.e. without the possibility of generating income from the sale of carbon credits, then they are not additional. In other words, the possibility of selling carbon credits must play a decisive role in the decision to develop and implement the project.


2 – Not overestimated

Overestimation of GHG reductions can have several causes:

  • The baseline emissions, i.e. the reference against which a GHG reduction are calculated, can be overestimated and thus the reduction as well.

  • Underestimating actual emissions.

  • Failing to account for indirect emissions

Using carbon credits that were estimated in excess would have no mitigation effect and on the contrary make climate change worse. All these issues are addressed by rigorous verification and auditing processes designed by the recognized International Verification Entities.


3 – Permanence

One challenge for carbon offsets to compensate is that the effects of CO2 emissions are long lasting. While a big part of a ton of CO2 emissions is eventually eliminated from the atmosphere, 15% to 40% remain in the atmosphere for hundreds of years. To compensate, offset projects must therefore be designed to be similarly permanent. If CO2 reduction is reversed (e.g. a reforestation project is destroyed by fire) it is no longer serves its compensatory function. Though this is for most projects physically unlikely or extremely unlikely, it can happen in so called “leaky” reservoirs forestry projects. There are ways to mitigate this particular risk of “leaky” reservoirs by establishing buffer reserves that can replace compensation projects that for any reason have gone obsolete.


4 – Exclusive claim to GHG reduction

Double issuance (more than one offset credit is issued for the same GHG reduction), double use (two different parties count the same offset credit towards their reduction claim) or double claiming (offset credits are issued to a project, but another entity then accounts the same GHG reduction towards its reduction goal) can happen, but offset programs have a number of methods to ensure that offset credits convey an exclusive claim to GHG reductions starting with the registration process of the project and assuring that credits are retired when issuing the carbon credit certificate.