Frequently asked questions
Q1: What are carbon market standards and why are they important in the voluntary carbon market?
A1: Carbon market standards are guidelines and protocols that ensure the environmental integrity of carbon credits. They provide a framework for quantifying, monitoring, and verifying greenhouse gas (GHG) emission reductions or removals. In the voluntary carbon market, these standards are crucial for ensuring that carbon credits represent real, measurable, and permanent GHG reductions or removals, and that they are not double-counted.
Q2: What are some examples of carbon market standards?
A2: There are several carbon market standards used in the voluntary carbon market. Some of the most recognized include the Verified Carbon Standard (VCS), the Gold Standard, the American Carbon Registry (ACR), and the Climate Action Reserve (CAR). Each of these standards has its own methodologies and protocols for quantifying and verifying GHG reductions or removals.
Q3: How do carbon market standards contribute to the credibility of the voluntary carbon market?
A3: Carbon market standards contribute to the credibility of the voluntary carbon market by ensuring that carbon credits are based on real, measurable, and permanent GHG reductions or removals. They provide a framework for third-party verification, which is crucial for ensuring transparency and trust in the market. Without these standards, it would be difficult for buyers to have confidence that the carbon credits they purchase are making a real contribution to climate change mitigation.
Q4: How do carbon market standards help in achieving climate goals?
A4: Carbon market standards help in achieving climate goals by providing a mechanism for quantifying and verifying GHG reductions or removals. This allows businesses, governments, and individuals to account for their emissions by purchasing carbon credits, which can contribute to the achievement of climate goals such as the Paris Agreement's target to limit global warming to well below 2 degrees Celsius above pre-industrial levels.
Q5: How does Proba adhere to carbon market standards?
A5: At Proba, we adhere to recognized carbon market standards by ensuring that the GHG reductions or removals from the projects on our platform are real, measurable, and permanent. We work with recognized third-party verifiers to ensure transparency and credibility. Each tonne of CO2 reduced, removed, or avoided is converted into a distinctive entitlement on a blockchain ledger, ensuring that it can't be claimed or used by any other party.
Q1: What is the verification process in the context of carbon markets?
A1: The verification process in carbon markets involves an independent third-party assessment of a project's greenhouse gas (GHG) emission reductions or removals. The verifier checks that the project has followed the appropriate methodologies and protocols, and that the reported GHG reductions or removals are accurate and complete. This process ensures the integrity and credibility of the carbon credits generated by the project.
Q2: What is the certification process in the context of carbon markets?
A2: The certification process in carbon markets involves the formal recognition that a project has achieved the verified GHG reductions or removals. Once the verification process is complete, the project can apply for certification under a recognized carbon market standard. If approved, the project is issued with carbon credits, each representing one tonne of CO2 equivalent (tCO2e) reduced, removed, or avoided.
Q3: How long does the verification and certification process typically take?
A3: The duration of the verification and certification process can vary depending on the complexity of the project, the standard being used, and the verifier's schedule. It typically takes several weeks or months from the start of the verification process to the issuance of carbon credits.
Q4: How does Proba handle the verification and certification process?
A4: At Proba, we work with recognized third-party verifiers to ensure the transparency and credibility of the projects on our platform. Once a project has been verified and the amount of CO2 reduced, removed, or avoided has been confirmed, each tonne of CO2 (tCO2e) is converted into a distinctive entitlement on a blockchain ledger. This process transforms the GHG reduction efforts into a valuable asset that contributes to the project's revenue stream.
Q5: Can a project fail the verification and certification process?
A5: Yes, a project can fail the verification and certification process if it does not meet the requirements of the carbon market standard being used. This could be due to issues such as inaccuracies in the reported GHG reductions or removals, non-compliance with the standard's methodologies and protocols, or lack of evidence to support the project's claims.
Q1: What determines the market value of a carbon credit?
A1: The market value of a carbon credit is determined by several factors, including the demand and supply of carbon credits in the market, the type of project that generated the credits, the standard under which the credits were issued, and the perceived credibility and environmental integrity of the credits. Market conditions, regulatory policies, and corporate carbon neutrality commitments can also influence the value of a carbon credit.
Q2: How does the price of Emissions Trading System (ETS) serve as a benchmark for the value of a carbon credit?
A2: The price of the Emissions Trading System (ETS) can serve as a benchmark for the value of a carbon credit because it reflects the cost of reducing a tonne of CO2 equivalent (tCO2e) in the regulated sector. However, it's important to note that the prices in the voluntary carbon market and the ETS can differ significantly due to differences in supply and demand dynamics, regulatory frameworks, and the types of projects included.
Q3: What is the current market value of a carbon credit?
A3: The market value of a carbon credit can vary widely depending on the factors mentioned above. Prices in the voluntary carbon market ranged from a few dollars to over $500 per tCO2e. For the most current prices, it's best to refer to recent market reports or data sources.
Q4: Can the value of a carbon credit change over time?
A4: Yes, the value of a carbon credit can change over time due to changes in market conditions, regulatory policies, and corporate demand for carbon credits. For example, if demand for carbon credits increases due to more companies committing to carbon neutrality, the value of a carbon credit could increase.
Q1: What is GHG accounting?
A1: Greenhouse Gas (GHG) accounting, also known as carbon accounting, is the process of measuring the amount of greenhouse gases produced by an organization, a project, or even an individual. It's a key part of managing and reducing GHG emissions and is often used by organizations to understand their environmental impact and to report on their sustainability efforts.
Q2: What are Scope 3 emissions?
A2: Scope 3 emissions are all the indirect emissions that occur in a company's value chain, including both upstream and downstream emissions. They can include emissions from activities such as purchased goods and services, business travel, employee commuting, waste disposal, and the use of sold products. Scope 3 emissions often represent the largest source of a company's carbon footprint.
Q3: Why is it important for a company to measure and reduce its Scope 3 emissions?
A3: Measuring and reducing Scope 3 emissions is important because they often represent the largest portion of a company's carbon footprint. By addressing Scope 3 emissions, companies can significantly reduce their overall GHG emissions, improve their sustainability performance, and demonstrate leadership in climate action.
Q4: How does Proba help companies with their GHG accounting and Scope 3 emissions?
A4: At Proba, we provide a platform that allows companies to turn their GHG reduction efforts, including those related to Scope 3 emissions, into tradable carbon certificates. This not only provides a financial incentive for companies to reduce their emissions, but also helps them track and quantify their GHG reductions, supporting their GHG accounting processes.
Q5: Can a company reduce its Scope 3 emissions by purchasing carbon certificates?
A5: Yes, a company can reduce its Scope 3 emissions by purchasing market-based inset certificates. Unlike traditional carbon offsets, which are used to compensate for a company's emissions, inset certificates are generated from projects within a company's own value chain that reduce or remove greenhouse gas emissions. This approach allows companies to directly contribute to the reduction of emissions within their own supply chain, providing a more integrated and impactful solution for Scope 3 emission reduction.
Q1: What is a Life Cycle Analysis (LCA)?
A1: A Life Cycle Analysis (LCA) is a method used to assess the environmental impacts associated with all the stages of a product's life, from raw material extraction (cradle) through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling (grave). LCA can help to identify opportunities to improve environmental performance and inform decision-making processes.
Q2: What are the main stages of a Life Cycle Analysis?
A2: A Life Cycle Analysis typically involves four main stages:
Goal and Scope Definition: This stage involves defining the purpose of the study, the system boundaries, and the functional unit (the measure of the function of the studied system).
Inventory Analysis: This stage involves data collection and calculation procedures to quantify relevant inputs and outputs of a product system.
Impact Assessment: This stage involves evaluating the potential environmental impacts based on the results of the inventory analysis.
Interpretation: This stage involves analyzing the results, drawing conclusions, and providing recommendations.
Q3: Why is a Life Cycle Analysis important?
A3: A Life Cycle Analysis is important because it provides a comprehensive view of the environmental impacts of a product or service and can help to identify opportunities for improvement. By considering the entire life cycle, LCA helps to avoid "problem shifting" from one stage to another, one geographic area to another, or one environmental medium (air, water, land) to another.
Q4: How can a Life Cycle Analysis be used in decision-making?
A4: A Life Cycle Analysis can be used in decision-making to compare the environmental impacts of different products or services, to identify opportunities for reducing the environmental impacts of a product or service, and to communicate about the environmental performance of a product or service. It can inform strategic planning, product or process design, and public policy development.
Q5: How can a Life Cycle Analysis contribute to the issuance of a carbon credit?
A5: A Life Cycle Analysis (LCA) can play a crucial role in the issuance of a carbon credit by providing a comprehensive assessment of the greenhouse gas (GHG) emissions associated with a product or service over its entire life cycle. By identifying and quantifying these emissions, an LCA can help to establish the baseline emissions against which GHG reductions or removals can be measured. These reductions or removals can then be converted into carbon credits. Furthermore, an LCA can help to ensure that the carbon credits represent real, measurable, and permanent GHG reductions or removals, and that they do not lead to unintended environmental impacts elsewhere in the product's life cycle.
Q1: How does Proba price its services?
A6: Proba's pricing is based on a fixed amount for every issued carbon certificate (between €1 and €3) and yearly subscription fee for the use of our platform (between €2.500 and €15.000). We strive to provide a transparent and fair pricing structure that reflects the value we offer to our clients. For more detailed information about our pricing, please contact us at firstname.lastname@example.org. We don't make money on the trade of carbon credits.
Q2: What is Proba's role in the process of issuing carbon credits?
A7: Proba's role is to facilitate the process of issuing carbon credits. We provide a platform where businesses can register their projects, and we work with recognized third-party verifiers to ensure the transparency and credibility of the projects. Once a project has been verified and the amount of CO2 reduced, removed, or avoided has been confirmed, we facilitate the conversion of these GHG reductions or removals into tradable carbon certificates.