Avoidance and removal carbon credits

June 19, 2023

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Carbon neutrality
Grégoire Guirauden

Grégoire Guirauden

Chief Operations Officer

Introduction : 2 types of carbon credits

Within the voluntary carbon market, there are two types of carbon credits, both playing a significant role: avoidance carbon credits and removal carbon credits. While both contribute to mitigating climate change, they differ in their approaches and impact.

biomethanisor for avoidance carbon credits

Avoidance carbon credits

Description of avoidance carbon credits

Many human activities have a substantial carbon footprint, with industrial burning of fossil fuels and the destruction of natural carbon sinks like forests being particularly detrimental. Carbon avoidance projects specifically target these activities with the objective of either capturing the emissions they generate or preventing them altogether.

Avoidance carbon credits, also known as emission reduction credits, focus on preventing or reducing greenhouse gas emissions that would have otherwise occurred. This type of credit supports projects and initiatives that implement strategies to avoid or reduce carbon emissions. Examples include renewable energy projects, energy efficiency improvements, waste management initiatives and reconditioning electronic devices mechanisms.

Mechanism behind the avoidance carbon credits

The core concept behind avoidance carbon credits lies in quantifying the reduction in emissions resulting from these projects. Carbon credit consulting firms or standards measure the baseline emissions that would have occurred without the project's implementation and compare it to the actual emissions observed after the project's implementation. The difference between these two values determines the number of avoidance carbon credits generated. These credits can then be sold in the voluntary carbon market to entities seeking to offset their own emissions.

Importance of the avoidance carbon credits

Avoidance credits compose 65% of the carbon credit market. The IPCC acknowledges that before 2030, avoiding an “overshoot and reliance on future large-scale … carbon dioxide removal (CDR)” requires focusing on avoidance ahead of removals. However, after 2050, carbon removals are needed to guarantee net-zero emissions. It is unlikely that by then we will have the technology necessary to do so purely through avoidance. Therefore, we must ensure that we effectively scale and invest in carbon removal but must not disregard the importance of avoiding emissions in the first place. In the short term, it is clear we must develop carbon avoidance to help achieve our global climate targets.

Avoidance carbon credits can be emitted for electronics recycling and reconditioning activities, low-carbon energies and low-carbon materials.

biomethanizor in field for avoidance

Removal carbon credits

Description of the removal carbon credits

Unlike carbon avoidance projects, which help avoid carbon being released, removal carbon credits focus on capturing and storing carbon dioxide from the atmosphere. These credits support projects that actively remove carbon dioxide, such as afforestation, reforestation, and carbon capture and storage (CCS) initiatives. Removal projects contribute to offsetting emissions by sequestering carbon from the atmosphere, thereby reducing the concentration of greenhouse gases. There are a growing number of techniques for doing this, pioneered by an expanding number of companies and organisations.

There are two types of carbon removal technologies that qualify as removal carbon credits:  Carbon Capture and Storage (CCS) and Carbon Capture and Utilization (CCU). Carbon Capture and Storage (CCS) entails the permanent storage of CO2, while Carbon Capture and Utilization (CCU) centers around the application and utilization of the captured CO2. Unlike CCS, which permanently stores CO2, CCU does not qualify as carbon dioxide removal. However, CCU technologies can significantly contribute to a circular economy by enabling us to utilize existing raw materials instead of extracting new resources.

A subtle yet significant distinction exists between these concepts. Carbon Capture and Storage (CCS) entails the permanent storage of CO2, while Carbon Capture and Utilization (CCU) focuses on utilizing the captured CO2 for various applications. Unlike CCS, which permanently stores CO2, CCU does not qualify as carbon dioxide removal. However, CCU technologies can play a pivotal role in a circular economy by enabling us to utilize existing raw materials instead of extracting additional resources.

Mechanism behind the removal carbon credits

The process of generating removal carbon credits typically involves measuring the amount of carbon dioxide captured by the project. This can be done through methods such as satellite monitoring, ground-based measurements, or remote sensing technologies. The measured amount of carbon dioxide removed is then quantified and translated into removal carbon credits that can be traded in the voluntary carbon market.

Importance of the removal carbon credits

Technological CO2 removal projects play a pivotal role in combating climate change. These projects, particularly those involving permanent CO2 storage like CCS (Carbon Capture and Storage), assist governments and companies in meeting the increasing number of Net Zero commitments worldwide. A Net Zero target signifies the commitment of a company, government, or organization to prevent any net increase in CO2 or other greenhouse gas (GHG) emissions beyond the levels required to stabilize global temperature rise at a maximum of 2 degrees Celsius. Upon achieving Net Zero, it becomes imperative for a company to not only prevent new emissions from entering the atmosphere but also permanently eliminate any remaining emissions that cannot be avoided. The necessity for permanent CO2 removal is most pronounced in sectors and regions where few alternatives exist for aligning with a Net Zero trajectory, thereby underscoring the significance of CO2 removal technologies for challenging-to-decarbonize industries like steel or cement.

Forestry projects can emit removal carbon credits as they capture carbon dioxide throughout their lifetime. BECCS, or Biomass Energy with Carbon Capture and Storage, is a method of carbon dioxide removal where carbon-filled biomass like trees or grasses is burned in order to capture its carbon and bury it underground. Finally, direct Air Capture technologies use chemicals to trap carbon dioxide from the air.

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