New guide outlines good practices for voluntary carbon market
News - Published 1.2.2023
Voluntary climate action is one way to promote climate work in Finland and globally. The guide published by the Ministry of the Environment and Ministry of Agriculture and Forestry on 1 February outlines good practices for the voluntary carbon market. The guide aims to improve the reliability of the domestic carbon market and create opportunities for Finnish companies to act for the benefit of the climate.
The project carried out by the Ministry of the Environment and Ministry of Agriculture and Forestry explored and defined the ground rules for offsetting emissions. The climate claims of companies, such as pledges concerning the carbon neutrality of their products or services, involve considerable uncertainty and suspicion of greenwashing.
According to the good practices, all operators should primarily reduce their own emissions and carbon footprint. Climate actions concerning the companies themselves can be supplemented by supporting voluntary climate actions of other parties that would otherwise not be taken.
The aim of the new guide is to improve the reliability of the domestic carbon market and introduce tools for both companies and consumers. The guide presents international good practices of the carbon market and encourages to apply them in Finland.
“Consumers must be able to trust that products marketed as green are genuinely that. The guide for the voluntary carbon market provides the ground rules and prevents greenwashing in the market. In Finland we have lots of future-oriented and reliable companies, and consumers who are very much interested in these matters, which is why I am sure that the guide will be in great demand,” says Minister of the Environment and Climate Change Maria Ohisalo.
According to the good practices, climate claims must be based on carbon credits that meet internationally established minimum criteria. Carbon credit means a certified mitigation outcome that corresponds to one tonne of carbon dioxide equivalent. The mitigation outcome can be either a reduction in greenhouse gas emissions or increase in carbon removals.
One key minimum criterion for the credits used to prove climate claims is additionality, i.e. the project that produced the credit would not have been carried out in any case e.g. due to statutory requirements or in a way that is economically profitable. It is also important that the climate benefit produced by the credits is genuine and clearly permanent, and verifiable. In addition, double counting must be avoided, i.e. the same carbon credit should not be used several times or to contribute towards several targets.
One easy way for companies to avoid double counting is to make climate claims in their marketing in such a way that the credits used will also contribute to the achievement of Finland’s carbon neutrality target.
“The ground rules will promote growth in the domestic market by enhancing the confidence of both companies and consumers and improving the credibility of the market. It is very good that climate actions taken by companies in Finland will help the whole country achieve our common climate targets,” says Minister of Agriculture and Forestry Antti Kurvinen.
Both ministers wish to remind that voluntary climate actions that do not fulfil all minimum criteria can also produce significant climate and other benefits, which is why it is important and advisable to support these as well. However, these should not be used for carbon offsetting purposes and climate neutrality claims.
EU-wide certification framework for carbon removals developed
The guide published today is based on international good practices, which have evolved and become established over a period of more than 20 years. Besides the international practices the guide describes EU regulation that has impacts on carbon credits and climate claims.
Several certification programmes are in use that assess the fulfilment of the minimum criteria and award carbon credits in registers. An EU-wide certification framework for carbon removals is also being developed.
Besides the certification of carbon removals, within the next few years the EU plans to introduce new regulation and stricter requirements concerning the criteria for climate claims, sustainability reporting by companies and corporate responsibility.
“Practices applied to voluntary climate actions, the legal framework for the activities and interpretations by the authorities are constantly evolving and being developed. It will also be necessary to update the guide when new regulation and good practices are introduced,” says Ville Laasonen, Senior Specialist at the Ministry of the Environment.
A project funded by the Government is under way to study how the national legislation, guidelines and reporting of carbon dioxide emissions should be developed in the long term. The project will analyse the impacts of the changes in the international regulatory framework on national emission reductions, consumer protection and the conditions where the companies operate. The project will start in March an it will run for 1.5 years.
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Special Adviser to Minister of the Environment and Climate Change
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Special Adviser to Minister of Agriculture and Forestry
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Press release from Finland’s Ministry of Agriculture and Forestry and Ministry of the Environment 1.2.2023