The Verra registry: analysis and trends of the world’s largest carbon credit registry

12 Mar, 2024

The Verra registry: Analysis and trends of the largest voluntary carbon credit registry. 

Verra : The carbon verification specialist for the voluntary market

Verra is an organization that operates a carbon credit certification program on the voluntary carbon markets. As a not-for-profit organization, Verra holds the world’s most popular voluntary reporting program, the Verified Carbon Standard (VCS). This program aims to certify carbon emission reduction projects.

The VCS program manages the rules and requirements for eligible projects and oversees their validation and verification. It focuses primarily on the greenhouse gas (GHG) reduction attributes of certified projects, while ensuring their integrity. Once certified, GHG emission reductions and removals are then transformed into tradable carbon credits. External validation and verification bodies, known as VVBs (Validation and Verification Bodies), validate the carbon credits after an audit. One credit is equivalent to one tonne of CO2 reduced or absorbed. All these carbon credits are then visible in Verra’s registry, under the name of VCUs (Verified Carbon Units).

This registry guarantees the uniqueness of projects and credits in the system. It then facilitates the transparency of information on certified projects and on units issued and retired. Finally, it enables VCUs to be sold on the voluntary carbon market.

Projects can be classified in one of the following 16 sectoral scopes :

  1. Energy (renewable/non-renewable)
  2. Energy distribution
  3. Energy demand (Will Solutions‘ Sustainable Community project operates in this field)
  4. Manufacturing industry
  5. Chemical industry
  6. Construction
  7. Transport (Will Solutions‘ Sustainable Community project should be operating in this field soon)
  8. Mining/mineral production
  9. Metal production
  10. Fugitive emissions – from fuels (solids, oil and gas)
  11. Fugitive emissions – from industrial gases (halocarbons and sulfur hexafluoride)
  12. Solvent use
  13. Waste management and disposal (Will Solutions‘ Sustainable Community project operates in this field)
  14. Agriculture, forestry and other land uses
  15. Livestock and manure management
  16. Carbon capture and storage

Growing enthusiasm shared by initiators of reduction projects

 

As of November 1, 2023, the Verra register contained 3,886 projects from all over the world. Of these, 2,059 were registered. This means that around 53% of the projects in the register have met the program’s standards and requirements, and have been validated by Verra. The number of registered projects generated around 1,223,000,000 VCUs.

However, although more than half of the projects in the registry are registered, the “statuses” of the remaining projects are varied: under development, in validation, pending, withdrawn, rejected by the administrator, inactive, etc. Among these unregistered projects, the most common “statuses” are those in the process of validation, under development, or requested for registration and verification. These account for over 83% of unregistered projects. Few projects, however, are pending, withdrawn or inactive.

These different cases reflect the arrival of new projects on the Verra register and, more generally, a growing interest on the part of initiators of projects to reduce greenhouse gas emissions.  

A wide range of projects

As mentioned above, the projects in Verra’s register are classified in one of its 16 sectoral areas (scopes). As of October 19, 2023, the estimated annual quantities of reductions by sector were distributed as follows :  

Estimated reductions by sector (inspired by Verra, 2024) 

Despite the varied nature of the projects in the register, two sectoral areas account for the vast majority of the reductions generated by Verra: (1) Energy (renewable/non-renewable) and (14) Agriculture, forestry and other land uses. They are respectively responsible for 178,870,888 tCO2e and 103,836,410 tCO2e, or 69% of the registry’s estimated total emissions.

In the graph above, the sectoral areas highlighted in orange represent the three areas of intervention of Will Solutions. In fact, by grouping together different GHG reduction projects in its Sustainable Communities, Will Solutions enables SMEs, municipalities and other organizations with GHG reduction micro-projects (or PAIs: Projects Activities Instance) to integrate voluntary markets by grouping them within a single local cohort.

Sustainable Communities operate as an umbrella for sector areas (3) Energy Demand and (13) Waste Management and Disposal. Sector area (7) Transport will also be eligible in the near future.

However, the projects present in these 3 sectoral areas combined are responsible for only 23.1% of the total estimated annual reductions in the Verra register. Given that Sustainable Communities projects account for only a small proportion of estimated annual reductions within the 3 sectoral areas mentioned, we can therefore conclude that Sustainable Communities account for only a small proportion of Verra’s total estimated annual reductions.

Considering that Solutions Will operates in only 3 of the 16 sectoral areas, it is possible to anticipate a strong development potential for existing and future Sustainable Communities.

 

A significant under-representation of Western projects

Although a global enthusiasm is shared by GHG reduction project initiators, the number of projects developed varies greatly from one region of the world to another. The following map details the number of projects per country, all “statuses” combined: 

Number of projects by country (Berkeley Carbon Trading Project, 2023)

First and foremost, there are a large number of projects in Asia. Indeed, China is the country with the most projects of all “statuses”, with 1115 projects, 489 of which are registered. India is the country with the most registered projects in the world, with 1,007 projects, including 519 registered.

What about Western countries? They are not yet following the trend set by China and Asia. In Europe, a total of 53 projects have been registered, most of them in Germany. In North America, Canada remains a modest player in the voluntary market, with just 23 projects, of which only 8 have been registered. The United States (USA), although still a long way from China and India, stands out from other Western countries with 157 projects, 94 of which are registered. Our American neighbors alone account for over 75% of projects in North America and Europe, making them a more mature market than Canada and Europe. These findings suggest a strong potential for the development of reduction macro-projects in Europe, similar to the Sustainable Communities set up by Solutions Will in Canada.

This assumption is supported by an analysis of the industry sectors operated by Will Solutions, and more specifically by the geographical location of projects classified within these 3 industry sectors. Figure 3 shows the number of projects in Canada, the United States and Europe within sector areas 3, 7 and 13:

 

Number of projects in Canada, the U.S. and Europe within sector areas 3, 7 and 13 (Inspired by Verra, 2024) 

A comparison of the number of projects in Sectors 3, 7 and 13 in Canada, the USA and Europe reveals very few projects in all three regions, and the same applies to the estimated annual reductions generated by these projects.

Although Sector 13 is a notable exception, with 29 projects in the USA, this does not mean that the American market is saturated. On the contrary, the potential in the USA is just as great when we consider that this country generates around 300 million tonnes of municipal solid waste annually, 50% of which is landfilled (Statista, 2023).

What’s more, the 29 reduction projects in sector 13 in the United States mainly involve the capture and flaring of biogas generated by landfill sites. However, there are very few waste detour, recycling or composting projects, leaving considerable opportunities for new projects. Taken together, these trends point to a strong potential for the development of new sustainable communities in Europe and the United States.

 

Conclusions drawn by Will  Solutions

Will Solutions draws several conclusions from the analysis of the Verra register. Here are the key points to remember: 

  • New projects are in the pipeline;
  • Asia is showing strong activity, in contrast to Western countries;
  • Canada remains a modest player in Verra’s voluntary market;
  • There is strong potential for developing existing multi-sector umbrella macro-projects (sector areas 3, 7 and 13);
  • There is significant potential for the creation of new Sustainable Communities and other carbon macroprojects in Europe and the United States.

References

Mathis Chanvillard
GHG Auditor
Author and Writer

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