Verra is activating a Clean Development Mechanism (CDM) methodology, AM0123: Renewable energy generation for captive use, v1.0 (external), for use in the Verified Carbon Standard (VCS) Program. The methodology allows a facility to receive electricity generated from a renewable energy power plant to meet part or all of its electricity demand, through a dedicated transmission line or wheeled through the grid. Along with this activation, Verra is releasing clarifications to AM0123 (PDF), which align the methodology with VCS Program rules and definitions. Project proponents and validation/verification bodies (VVBs) shall apply and interpret AM0123, v1.0 consistent with these clarifications.

AM0123 was released by the United Nations Framework for Climate Change Convention (UNFCCC) in September 2023 and, upon receiving several stakeholder requests, Verra reviewed and decided to activate it for use in the VCS Program.

The clarifications to AM0123 stipulate that projects using this methodology must follow the VCS Standard’s rules that specify the geographies in which renewable energy projects are eligible. Projects must also use the global warming potentials (GWPs) noted in the VCS Standard, v4.7 (which are based on values from the IPCC Assessment Report 5) instead of those included in the methodology.

While Verra excluded most grid-connected renewable energy projects from the scope of the VCS Program when it launched version 4 of the program in 2019, Verra still holds that the targeted application of carbon finance is crucial to overcoming barriers that renewable energy projects face.

Release of VT0011

In addition to activating AM0123, Verra is releasing a new tool, VCS Tool VT0011 Electricity System Emission Factors, v1.0 (PDF), which is a minor revision to Clean Development Mechanism (CDM) TOOL07: Tool to calculate the emission factor for an electricity system, v7.0 (external).

In the context of an earlier category-level assessment, the Integrity Council for the Voluntary Carbon Market (ICVCM) identified deficiencies with TOOL07. In response, Verra is now releasing VT0011, which is designed to meet the requirements of the ICVCM’s Core Carbon Principles (CCPs) Assessment Framework, specifically the criteria for electricity use and generation, as well as VCS Program rules and definitions.

If the ICVCM approves methodologies that require this tool, credits from projects using these methodologies will receive CCP labels.

Specifically, VT0011 revises TOOL07 to update the calculation of the build margin (i.e., the average carbon dioxide emissions per unit of net electricity generation from the most recently built power plants) and increase build margin weight in the combined margin (i.e., the weighted average of the operating margin and build margin emission factors). Other changes were made to ensure conservative assumptions both for projects supplying electricity and for projects increasing electricity consumption.

A public consultation for VT0011 was open from October 3 through November 4, 2024.

Verra plans to publish a VCS methodology revision that is based on AM0123 and that requires use of VT0011. Verra will also revise other renewable energy methodologies to require VT0011. Verra will then submit these methodologies to the ICVCM for review.

Implications for VCS Projects Using TOOL07 or VT0011

  • Projects in the VCS Program using a methodology that requires VT0011 must apply the tool as indicated in the respective methodology.
  • Projects using a methodology that uses TOOL07 may apply VT0011 instead until a revision of the underlying methodology is published.  At this point, any previous methodology versions using TOOL07 will be inactivated.
  • Projects can also use Verra’s new Methodology Change and Requantification Procedure to update to a more recent version of a methodology that uses the new tool. If the methodology is approved by the ICVCM, projects will obtain the CCP label for past Verified Carbon Unit (VCU) issuances.