Carbon Offset Programs Guide and Examples for 2023

Persefoni Team
By Persefoni Team
October 26, 202213 min read
November 28, 2022, 1:33 PMUpdated
October 26, 2022Updated: November 28, 2022, 1:33 PM13 min read

Carbon offset programs provide individuals, companies, and governments access to vetted carbon offset projects used to offset their overall carbon footprint.

These programs give organizations streamlined access to a variety of projects along with important information about each. This includes background on the project developer, current progress toward their goals, how the investment is used, and how the project is removing or avoiding carbon emissions.

This is an option that some companies choose to use when they don’t have the resources or technology to reduce emissions, like the ones generated from flights or from fossil fuel usage.

There is a wide range of carbon offset programs and markets for all buyers. For example, individuals can purchase offsets when booking flights. Businesses with an emissions cap can purchase offsets to meet compliance obligations, depending on the program. With so many options and varying standards for verification, it can be tough to know which program is the best choice for your needs.

Below, we’ll go over some examples of carbon offset programs, highlighting the features to look for and some of the differences between various programs.

Disclaimer: The information below is accurate at the time of writing. The programs listed below are not indicative of an endorsement for one program over another.

The Clean Development Mechanism (CDM)

  • Year established: 2006

  • Category: Compliance carbon market

  • Label used for carbon offset credits: Certified emission reduction (CER)

  • Total credits issued: More than 2 billion

  • Registered projects: 7,844

  • Project categories: Agriculture, biogas energy, biomass energy, EE households, EE industry, fossil fuel switch, hydro, N2O, reforestation and afforestation, solar, transport, waste handling and disposal, wind

The CDM provides a platform to purchase certified emission reduction (CER) for countries with commitments under the Kyoto Protocol to limit or reduce greenhouse gas (GHG) emissions.

The CDM’s project cycle includes seven steps: project design, national approval, validation, registration, monitoring, verification, and CER issuance. Users can find project information on the CDM’s website for projects at any stage of the registration process.

CDM projects are typically located in developing countries. For example, the CDM’s Biomass Energy Conservation Programme project brings the Chitetezo Mbaula cookstove to Malawi residents. This stove reduces particles emitted in the air and cuts down on firewood consumption.

The CDM added an online platform in September 2015 to let members of the public offset their carbon footprint through the organization. Users can sort with categories like impact, industry, and project type.

Canada’s GHG Offset Credit System

  • Year established: 2022

  • Category: Compliance carbon market

  • Project categories (current): Landfill methane recovery and destruction

  • Project categories with protocols in development: Reducing GHG emissions from refrigeration systems, improved forest management on private lands, enhanced soil organic carbon, livestock feed management, direct air carbon dioxide capture and sequestration

Canada’s GHG Offset Credit System provides offset credits for sale and use in the federal Output-Based Pricing System. The GHG Offset Credit System provides credits for facilities that need to meet compliance. In the future, it will also provide credits for the voluntary market.

This is a new system that’s currently accepting applications for projects that fall under their Landfill Methane Recovery and Destruction protocol. Environment and Climate Change Canada (ECCC) is still developing protocols for other types of projects and may add more types in the future.

Projects must reduce or avoid GHG emissions based on federal offset protocols for eligibility. The protocols include project verification from a third party, like the ANSI National Accreditation Board (ANAB), or third parties accredited to the ISO 14065 standard by the Standards Council of Canada.

Regional Greenhouse Gas Initiative (RGGI)

The RGGI’s goal is to cap and reduce carbon dioxide emissions in the power sector. It’s a collaboration of the following Eastern states in the U.S.:

  • Connecticut

  • Delaware

  • Maine

  • Maryland

  • Massachusetts

  • New Hampshire

  • New Jersey

  • New York

  • Pennsylvania

  • Rhode Island

  • Vermont

  • Virginia

It allows companies to use offsets to meet up to 3.3% of their carbon compliance obligations, however, only seven of the twelve states award offset allowances or provide accreditation to verifiers.

RGGI developed the RGGI CO2 Allowance Tracking System (RGGI COATS) to register and track projects and allow public access to project information. Offset projects must meet RGGI’s requirements by:

  • Submitting a consistency application to ensure they meet that state’s requirements

  • Submitting ongoing verification and monitoring reports to confirm the emissions reduction or sequestration before an RGGI state awards any offset allowances

  • Meeting RGGI’s additionality requirements to ensure that the projects deliver real emissions reductions that would not have otherwise taken place without it

RGGI’s offset program is specifically meant for RGGI states. Power plants in states that do not award offset allowances can use allowances awarded from other RGGI states.

Japan’s J-Credit Scheme

  • Year established: 2013

  • Category: Compliance carbon market

  • Label used for carbon offset credits: J-Credit

  • Total credits issued: 395

  • Registered projects: 399

  • Project categories by methodology: Energy saving, renewable energy, industrial processes, agriculture, waste, forest

The Japanese central government administers Japan’s J-Credit Scheme which merges the Offset Credit (J-VER) and the Domestic Credit Scheme. Organizations can purchase offsets in compliance with several energy- and carbon-related mandates. Individuals can also purchase voluntary carbon offsets.

In addition to Japanese citizens and organizations, foreign organizations are eligible to open accounts and retire, transfer, sell, buy, or hold J-Credits. However, all J-Credit Scheme projects are implemented in Japan. Credits are sold at official auctions and bilateral negotiations.

Projects must follow the J-Credit Scheme’s Implementation Rule for certification, which involves three main phases: development of the project design document (PDD), registration of the project, and monitoring and certification.

Persefoni and Patch Zero-Commission Carbon Offset Marketplace (ZCCOM)

  • Year established: 2021

  • Category: Voluntary carbon market

  • Registered projects: 50

  • Project categories: Biomass, forestry, mineralization, ocean, soil, renewables, clean water, gas capture, energy efficiency

Persefoni has partnered with Patch to launch ZCCOM and offer carbon offsets through Patch’s marketplace. All organizations and individuals can navigate the marketplace to purchase certified long-term carbon offsets that were previously restricted.

There are no minimum purchase requirements, so users can purchase as little as a gram. Offset purchases are maximized to the physical project, not fees. The marketplace also offers project-level information so users can understand exactly where their money is going.

The ZCCOM platform also gives users the option to request new carbon offset projects.

Verra and the Verified Carbon Standard (VCS)

  • Year established: 2005

  • Category: Voluntary carbon market

  • Label used for carbon offset credits: Verified Carbon Units (VCU)

  • Total credits issued: 984 million

  • Registered projects: 1,840

  • Project categories: Agriculture, forestry, and other land use; chemical industry; construction; energy demand; energy distribution; energy industries (renewable/non-renewable sources); fugitive emissions from fuels (solid, oil, and gas); fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride; livestock, enteric fermentation, and manure management; manufacturing industries; metal production; mining/mineral production; transport; waste handling and disposal

Verra is another program that offers individuals and companies the opportunity to reduce and offset their carbon footprint with carbon offsets offered through the VCS program. In addition to VCS projects, users can find other programs in the Verra Registry, like the Plastic Waste Reduction Program and the California Offset Project Registry.

The VCS program has a comprehensive set of requirements and rules for projects wishing to become certified. These include approval of a project’s methodology and completion of monitoring and verification reports. Verra’s VCS is also used to verify projects for other carbon offset programs.

Additionally, projects are subject to assessment from validation/verification bodies (VVBs). These VVBs are accredited in specific areas and are assigned projects that are geared toward their areas of expertise. The VCS program has over 20 VVBs in five continents. The VCS Program Advisory Group also supports the VCS program to further ensure its quality.

Natural Capital Exchange (NCX)

  • Year established: 2010

  • Category: Voluntary carbon market

  • Registered projects: 4.6 million acres of forest participating (of 272 million acres owned by family landowners in the U.S.)

NCX created a forest carbon marketplace using data collected for their Basemap forest dataset. NCX partnered with Microsoft's AI for Earth program to map out forests across America, including information about species and sizes of trees.

Their technology helps provide improved data for better forest management decisions and to provide high-quality carbon offset credits; for example, NCX can provide acre-by-acre baseline measurements. They can also measure and assess the risk of harvesting, along with its capacity for carbon sequestration. NCX is in the process of partnering with Verra to certify its carbon credits.

NCX’s “short-term harvest deferral” methodology states that paying landowners and managers to reduce harvesting will help them grow more carbon-rich and older forests. In comparison to other forestry projects, NCX uses a year-by-year approach, meaning that delivery contracts are for one year rather than decades (or longer). This year-by-year evaluation helps ensure that projects are delivering on expected outcomes.

Potential buyers must contact NCX directly to begin the purchase process. Below is an overview of NCX’s four-step process:

  1. Landowners register online and receive a property assessment.

  2. Landowners enroll properties while companies work with NCX sales reps to solidify their offset commitments.

  3. NCX pairs landowners and buyers and takes baseline measurements while landowners defer harvesting for that year.

  4. NCX and third-party verifiers confirm harvest deferral before paying landowners and issuing carbon credits to buyers.

Any user can look at their carbon credits map to see how many carbon credits are located in different parts of the U.S. To make the program accessible to landowners of all sizes, NCX charges $0 in fees to participate and has no acre minimum for projects.

Terrapass

  • Year established: 2004

  • Category: Voluntary carbon market

  • Registered projects: 42

  • Project categories: Forestry, BEF WRCs, renewable energy, landfill gas capture, farm power

Terrapass offers carbon offset credits to individuals and businesses seeking to reduce their carbon footprint.

They use the American Carbon Registry, CSA Group, Climate Action Reserve, Verified Carbon Standard, and the Gold Standard for their carbon offset project standards and only purchase offsets that have been generated within the past five years. Focusing on this time frame supports the demand for new projects while also ensuring carbon offset purchases are conducive to emission reductions.

Terrapass also puts each offset purchase through a periodic review with an accredited and independent third party. The review looks at Terrapass’ verification and transparency as well as offset quantity and quality.

In addition to carbon offsets, Terrapass also provides other services for customers, like Green-e Energy Certified Renewable Energy Credits and Business BEF Water Restoration Certificates (WRCs).

The Gold Standard

  • Year established: 2003

  • Category: Voluntary carbon market

  • Total credits issued: 191 million

  • Registered projects: 34

  • Project categories: Community-based energy efficiency, fair trade projects, land use activities and nature-based solutions, renewable energy, waste management

The Gold Standard created the Gold Standard for the Global Goals following the adoption of the Paris Climate Agreement and the Sustainable Development Goals.

This holds climate and development projects to a high standard to ensure that they create value and maximize impact. The Gold Standard provides a guided online tour of their standards to help project developers understand the requirements they must follow.

The certification process spans seven steps, beginning with stakeholder consultation and project planning, and ending with a performance review by SustainCERT.

The Gold Standard also offers a marketplace where individuals and businesses can purchase offset credits for a variety of projects. Users have the option to offset through the Gold Standard’s Climate+ Portfolio to support a variety of projects.

Frequently Asked Questions About Carbon Offset Programs

There may be some questions that come up while vetting different programs. We’ll answer a few common ones below.

What’s the Difference Between a Carbon Offset Program and Project?

Carbon offset programs refer to the platforms or organizations managing, vetting, and offering carbon offset credits. Terrapass and Persefoni’s Zero-Commission Carbon Offset Marketplace are examples of these programs.

Carbon offset projects are initiatives that remove or avoid carbon emissions. Reforestation projects and methane capture projects are a couple of examples.

What Are Examples of Carbon Offset Projects?

Carbon offset projects can include reforestation projects to support natural carbon sinks, biochar production to sequester carbon, and the installation of wind turbine generators to avoid using fossil fuels.

Projects can significantly vary based on the region's needs and the focus of a particular carbon offset program. For example, NCX primarily focuses on forestry projects, while ZCCOM features many types of projects.

What’s the Difference Between the Compliance and the Voluntary Carbon Market?

The compliance carbon market is primarily for governments and companies in specific industries that are mandated to meet specific carbon goals. Programs catering primarily to the voluntary carbon market can serve both businesses and individuals who are interested in offsetting their carbon footprint. Several programs serve both markets, offering credits for those looking to either comply with mandated reduction goals and those voluntarily seeking to offset their emissions.

How Can Businesses Pick High-Quality Carbon Offset Programs?

Businesses should look for a program that offers projects which are thoroughly and transparently vetted. They should also consider how transparent the program is in allocating funds after the purchase, along with several other criteria for verifying the program’s credibility. For example, some programs may not vet projects as thoroughly or may keep a larger portion of the offset sale compared to others.

How Can Businesses Purchase Carbon Offsets?

Businesses can typically browse and purchase carbon offsets directly through a program’s website. Projects are categorized by type, such as gas capture or energy efficiency. Some programs require buyers to contact them directly to facilitate a carbon offset purchase.

How Much Are Carbon Offsets?

Carbon offset credits can range greatly from $6 to $1,200 per metric tonne CO2e. Carbon offsets are commonly priced per ton of carbon the project removes. For example, if an offset costs $60 per ton, then 200 tons would cost $12,000 to purchase.

A report from EY’s Net Zero Centre predicts that prices for credits could reach $80 to $150 per tonne in 2020 dollars by 2035. Carbon offsets range in price based on factors like project cost, estimated impact, and demand.

Are Companies Greenwashing by Using Carbon Offsets?

Companies can use carbon offsets as one part of their overall plans for decarbonization. There are high-quality carbon offset projects available that remove or reduce emissions as claimed.

However, companies may unintentionally participate in greenwashing if they support a project that doesn’t remove or avoid the amount of carbon it claims to. The project’s impact may also be unclear if large portions of the investment don’t go back to support the project itself.

Carbon offset programs should have project-level information (like how funds are used) available with their project listings somewhere on their website, or otherwise available upon request.

Companies should prioritize vetting carbon offset programs and the projects themselves to ensure their credibility.

Persefoni and Patch’s Zero-Commission Carbon Offset Marketplace (ZCCOM) provides access to the carbon market to any user. The platform provides project-level information so buyers can see what their investment is funding.

Look through our carbon offset marketplace offered in partnership with Patch to see what projects your business can support.

© 2022 Persefoni AI Inc. All rights reserved. This presentation is the exclusive property of Persefoni and may not be copied or distributed, in whole or in part, without the express permission of Persefoni.

Persefoni is a leading Climate Management & Accounting Platform (CMAP). The company’s Software-as-a-Service solutions enable enterprises and financial institutions to meet stakeholder and regulatory climate disclosure requirements with the highest degrees of trust, transparency, and ease. As the ERP of Carbon, the Persefoni platform provides users with a single source of carbon truth across their organization, enabling them to manage their carbon transactions and inventory with the same rigor and confidence as their financial transactions.

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