Scope 3 emissions often make up the vast majority of a company’s carbon footprint up to 75% on average and in some cases to 99%. Reduction of Scope 3 emissions requires working directly with suppliers, reshaping procurement and sourcing decisions in light of joint climate action.

The most effective way to reduce Scope 3 emissions is doing value chain interventions, with other words: running insetting projects. These decarbonisation projects combine supplier engagement with operational changes implemented along value chain. They focus on direct operational impact, such as improving supplier practices or material sourcing.

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The role of insetting is to assist suppliers in technology transition, which directly reduces Scope 3 emissions within the company’s own value chain. Value chain interventions are fundamental elements and integrate suppliers into the decarbonisation strategy. Insetting is built on co-investments made by the parties; thus, they can co-claim the results via market certificates. Insetting certificates can move along the value chain, and companies can report them among the direct inventory as own projects based on the GHG Protocol (Statement 1).

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On the contrary, companies should only offset the residual emissions that cannot be further reduced or eliminated for technological or economic reasons. It is realised by purchasing green certificates such as verified carbon credits and can report among the off-value-chain and other impacts based on the GHG Protocol (Statement 3)

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A quality carbon credit is based on an eligible climate action project going beyond the legal requirements set against the project owner. Its impact must be additional and free from double counting. It should follow a recognized methodology, be independently verified, and have clear traceability. Strong legal structure and transparent data provisioning are also key indicators of quality.  

Carbon credit prices typically range from $1 to over $100 per ton, depending on project type, sector, region, vintage and quality. Basic forestry and technology avoidance projects tend to be lower priced, while high-integrity removal or carbon farming projects command a premium.

Price alone does not guarantee quality, so verification and traceability are critical. However, we strongly advice not going below 20 USD carbon price (per ton CO2e) based on the recommendations made by Science Based Target initiative for companies want to achieve recognized status.

Companies can avoid low-quality carbon credits by selecting verified projects with transparent data provisioning and strong legal structure. This includes scrutinous third-party verification, clear underlying methodology, and safeguards against double counting.

Working with experienced providers also reduces risk. We suggest purchasing directly from source. Thus, we recommend sourcing from project developers who are only selling certificates from projects they carefully developed and can guarantee their quality and avoiding brokers.

Any climate action project having transparent baseline and a measurable carbon impact can generate carbon credits if it goes beyond legal requirements. It shall deliver additional, quantifiable and verifiable emission reductions or carbon removal. Excluding double counting in a transparent way is also a must.

Eligibility depends on factors such as legal framework, baseline definition, methodology fit, and monitoring capability. A feasibility assessment is typically required before project development to check all boxes.

Developing a carbon credit project may take from 6 to 24 months before verified carbon credits can be issued. This includes a feasibility study, methodology selection, project validation, implementation, and verification. Timelines can vary depending on project type and data availability. To fasten the process and make it safer, we recommend working with experienced carbon project developers that can provide you full-blown services.  

MRV stands for Monitoring, Reporting, and Verification, and it is the process used to measure and validate the real impact of emission reductions or carbon removals. This process ensures that carbon credits are based on real outcomes. Strong MRV systems improve data quality, transparency, and credibility. We suggest working with project developers providing a digital MRV tool instead of simple spread sheets.  

The EU CRCF (Carbon Removal Certification Framework) is a new and forward-leaning regulatory initiative to standardize how carbon removals are measured, certified and traded in Europe. It covers a wide spread of technology-based carbon removals and nature-based carbon farming solutions aligned with the Bioeconomy Strategy of the European Union.

The regulation aims to increase transparency, credibility, and comparability of carbon removal projects. Both project owners and developers need to align early as the framework quickly evolves.

Carbon credits are a valid and highly effective tool for decarbonisation when used to offset residual carbon emissions that cannot be addressed in any other way due to technology or business constraints. They do not replace but supplement the company’s own efforts in climate action. High-quality carbon credits with verified impact are essential for credible offsetting.