What are Carbon Credits?
Carbon credits are used to compensate for emissions by supporting the removal or reduction of carbon emissions elsewhere. Credits are created through financing activities that reduce remove carbon dioxide (CO2) or other greenhouse gas equivalent emissions.
These include initiatives that reduce emissions that otherwise would have been released, like landfill gas capture or use, ozone depletion or reducing gas leakage throughout a delivery network. Elsewhere, carbon credits can be projects that protect or enhance natural resources that fix carbon from the atmosphere – such as improved forest or land management to improve the carbon stocks in biomass or soils. This could also come in the form of natural or technological removals, including reforestation areas or Direct Air Capture (DAC).
These projects are awarded a carbon credit for each tonne of carbon removed or avoided. The carbon credits are certified and issued by an independent body such as the UN CDM, Gold Standard or Verra.
By creating a market where people can buy and sell carbon ‘credits’ they can choose to compensate for emissions through their purchase when options to reduce emissions are unavailable. As such, a greenhouse gas emission on one part of the planet can be compensated for through the purchase and retirement of a carbon credit.
However, not all carbon credits are created equal. Risks around ensuring the quality of carbon credits are prevalent and when that risk is not effectively managed, this can result in reputational and financial damages. bp Carbon Connect works to reduce these risks through ensuring the integrity of credits within our portfolio. To do so, we uphold a rigorous assessment criteria and selection process that seek to ensure the integrity of the emissions reductions and the positive impact on the communities and environments the projects operate in.
The bp Carbon Connect service has helped customer reduce and compensate for millions of tonnes of carbon since 2006. Many of the projects we have supported have also contributed to improving the lives of people in communities around the world through better access to energy, health, education and jobs. Intersecting with human rights, our project support continues to protect, restore and regenerate areas which will enhance biodiversity and ecosystem functions and services.
