GHG registries : the ultimate step towards recognized reductions

Companies that fight against climate change benefit from recording the tons of greenhouse gases (GHGs) they have eliminated in a registry. This brings, in particular, public recognition to their efforts in favor of the environment.

To combat climate change, several organizations and companies are committed to reducing their GHGs or sequestering more carbon. However, only the most serious ones rely on best practices and recognized standards. For example, they set reduction targets according to SBTi standards and develop action plans in accordance with protocols approved by a validation and verification body. Once they have achieved their reductions, however, companies must record them in a public register so that their efforts are given due recognition.

Keeping track

In a nutshell, a registry is a book in which one records the acts or facts one wants to keep track of. There are several types: for weddings, banking transactions or, for about 30 years now, for GHG reductions and carbon sequestration.

Regardless of the type of registry, the objective is always to guarantee the credibility and traceability of a fact or an act. For example, it is thanks to their shared registries that financial institutions can ensure that the same check is not cashed twice. GHG reduction and carbon sequestration registries attest to the quality of these reductions and sequestrations, while keeping track of who produced and purchased them.

Protocols: a guarantee of quality

To carry out their verifications, GHG reduction registries rely on precise protocols. In concrete terms, these are complete and rigorous sets of rules that comply with recognized international standards, such as ISO 14064-2:2019. These processes are similar to those of a bank, for example, which ensures that a banknote is not counterfeit before accepting it.

In the world of GHG reductions, several protocols coexist and each validates only certain types of reduction or sequestration. For example, Logiag’s Dedicated Dairy Farms protocol only validates reductions made on dairy farms in eastern Canada. Other protocols exclusively concern the mining industry, energy projects, field crops, etc.

Although there are many of them, these protocols all have the same objective: to ensure that a GHG reduction or carbon sequestration does not result from chance, but rather from identifiable measures that have been voluntarily implemented. Only this type of reduction or sequestration is considered valid. This includes a dairy farm that decides to strategically reduce its replacement subjects, but not another one whose emissions decline due to a drop in production.

A precise description of GHG reductions

Once a registry has verified the quality and validity of a reduction or sequestration, it records it, noting at least three of its characteristics:

The measures that created it: the actions taken, during what period, by whom, where, etc.;
The number of tons of CO₂ equivalent that it avoided or sequestered;
Its commercial status, i.e. whether this reduction or sequestration is still available for sale or, if it has been sold, who bought it. This helps prevent the same reduction from being claimed multiple times, for example, by different companies.

A competitive market

This sales tracking is important, as the markets for GHG reductions and carbon sequestration are booming. These products are of interest to two main types of organizations and companies:

Those who want to buy reductions from others (so-called “offset credits”) in order to neutralize the emissions that they themselves are unable to eliminate;
Those who operate according to the principles of an integrated market, i.e. who integrate their GHG reductions into their own value chain. The Dedicated Dairy Farms program, for example, is based on such an integrated model. In concrete terms, the GHG reductions created by the farms are valued by the agri-food processors present in their value chain in order to ultimately market low-carbon products.

Finally, it is good to know that the GHG reduction registries do not record the selling price of one tonne of CO₂ equivalent. At present, this price depends on the agreements that buyers and sellers reach at auctions or in private contracts. Ultimately, this price is determined by the quantity of reductions offered on the market – or by supply and demand – as well as by the quality of the registry where they are entered.

There are many GHG reduction registries and they are not all of equivalent quality. Indeed, the market for combating climate change is still young and developing. Thus, unlike bank registries, those that record reductions and sequestrations are not yet governed by perfectly established or universal rules.

At present, even if these registries collaborate with each other and share certain characteristics, they therefore operate according to their own rules. In concrete terms, each of them determines according to which protocols it validates a GHG reduction or sequestration, and how it establishes whether or not it can be sold.

A balance in the making

At first glance, this may seem worrying: how can we know if a registry is reliable and if it offers good quality reductions and sequestrations?

The answer lies in the balance that each registry strikes between the rigour of its processes and its attractiveness. “A registry that uses validation criteria so rigorous that they become impossible to meet is useless, because no organization will be able to use it to validate its reductions,” explains Hendrick Hassert, director of climate strategy at Logiag. “Conversely, a registry with overly permissive criteria is just as useless, because it discourages serious organizations that want to sell their reductions or sequestrations at their fair value.”

Rigorous registries

Several registries stand out for their rigor, good reputation or longevity. The oldest registry is the American Carbon Registry (ACR). Created in 1996, it has validated nearly 900 reduction projects, representing more than 300 million offset credits. The California Climate Action Registry is also more than 20 years old: it was founded in 2001 by the California government rather than by a private organization. Over the years, it has validated 62 projects representing 198 million offset credits.

One particularly respected registry is Gold Standards’ Impact. Founded in 2003 by the World Wildlife Fund, among others, this registry is especially rigorous because it takes into account the environmental and social co-benefits of GHG reduction projects. Over the years, it has validated nearly 3,500 projects and created 29 million offset credits.

The most productive registry is Verra. In operation since 2007, it has validated nearly 2,500 projects totaling approximately 1.3 billion offset credits.

Finally, one of the most recent registries is VIVID. Created in 2018 by SustainCERT, it’s the registry where the reductions created by the Dedicated Dairy Farms program are recorded. This registry stands out for its specialization in scope 3 reductions, i.e. those that come from suppliers or distributors in a company’s value chain. In the case of an agri-food processor, for example, these reductions include those from the groups of farms from which it buys its fresh food.

Increasing reliability

In conclusion, GHG reductions and carbon sequestration registries represent an essential link in the fight against climate change. Even if they remain independent players that decide for themselves the rules governing them, they are increasingly adopting common practices and stepping up their collaborations.

In short, the carbon markets are maturing, becoming more organized and standardizing their methods so that society can recognize the full value of the efforts of companies fighting climate change.