Verra has released two new tools in the Verified Carbon Standard (VCS) Program to assess the additionality of project activities: VCS Tool VT0008 Additionality Assessment and VCS Tool VT0009 Combined Baseline and Additionality Assessment.

VT0008 and VT0009 are designed to meet the additionality requirements of the Core Carbon Principles (CCPs) Assessment Framework of the Integrity Council for the Voluntary Carbon Market (ICVCM).

Verra expects to release revisions of methodologies to adopt these new additionality tools in the coming months. If the ICVCM approves the methodologies relying on the new VCS tools, Verified Carbon Units (VCUs) generated by projects using these methodologies will qualify for CCP labels.

VT0008 and VT0009 provide procedures and requirements for conducting the investment, barrier, and common practice analyses, as well as identifying the baseline scenario where applicable. The tools replace Clean Development Mechanism (CDM) tools TOOL01 Tool for the demonstration and assessment of additionality (external) and TOOL02 Combined tool to identify the baseline scenario and demonstrate additionality (external) for projects using VCS and CDM methodologies in the VCS Program.

The new VCS tools also replace the following CDM tools and guidelines in the VCS Program by consolidating them and including further updates to ensure compliance with the most recent version of the VCS Methodology Requirements and the CCP requirements for additionality:

In its recent methodology decisions announcement, the ICVCM had identified concerns with the CDM tools and encouraged “CCP-Eligible programs using the above CDM Additionality Tools to consider reviewing and/or updating their methodologies/tools to be in line with Assessment Framework requirements on additionality.” [1]

VT0008 and VT0009 do not, at this point in time, replace VT0001 Tool for the Demonstration and Assessment of Additionality in VCS Agriculture, Forestry and Other Land Use (AFOLU) Project Activities and VT0002 Tool for the Demonstration and Assessment of Additionality in IFM Project Activities. In the future, Verra may consolidate VT0001 and VT0002 into VT0008.

Specifically, the new VCS tools include the following updates:

  • A new requirement for the benchmark analysis to demonstrate that carbon credit revenues decisively increase the economic performance of the project and raise the financial indicator (such as Internal Rate of Return) to or above the required financial benchmark
  • A new requirement that assumptions, data, and conclusions in the investment analysis must be consistent with information presented to the entities financing and implementing the project
  • The removal of the “simple cost analysis,” which was a simplified option used to demonstrate that at least one alternative is less costly than the project activity in the absence of financial or economic benefits other than carbon credit revenues. Going forward, projects should apply an investment comparison analysis.
  • A new requirement to provide verifiable evidence to demonstrate each identified barrier to the implementation of the project and proof that that carbon credit revenues are the decisive element in overcoming each identified barrier
  • The removal of the “technological barriers,” such as lack of infrastructure for implementation and logistics for maintenance of the technology
  • The removal of the “first-of-its-kind” additionality test, according to which a project is additional if it introduces a new technology or practice in the host country, eliminating the need for barrier or investment analysis
  • Additional improvements and edits to enhance clarity

Implications for VCS Projects

Projects in the VCS Program must apply VT0008 or VT0009 to determine the baseline scenario and assess additionality as indicated in the applicable methodology. Some methodologies may require the use of another appropriate additionality tool or provide a different approach to assess the baseline and additionality as per the most recent version of the VCS Methodology Requirements.

Previous methodology versions using the CDM tools will be inactivated when the respective methodology revisions are published. Projects may complete validation using the previous methodology version within a grace period.

Projects using a methodology that uses the CDM tools may also apply the new tools until a revision of the underlying methodology is published.

Projects using a small-scale methodology will also have the option to use the new VCS tools instead of CDM TOOL21 Demonstration of additionality of small-scale project activities (external) or CDM TOOL19 Demonstration of additionality of microscale project activities (external) to align with the CCP requirements for additionality.

Per Verra’s new Methodology Change and Requantification Procedure, to be released soon, existing projects from affected methodologies may also update to the newer versions that use the new tools to demonstrate additionality and, once the methodologies are approved by the ICVCM, obtain the CCP label for past and future VCU issuances.

New Electricity Tools

Verra is also preparing to release two electricity tools to replace existing CDM tools.

The above-mentioned forthcoming methodology revisions take these new tools into account as well.

Notes:

[1] See ICVCM Board Observations in Relation to Category Assessment Renewable Energy (external)

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