Independent Governance Body Issues Core Carbon Principles For Voluntary Carbon Market

On March 30, 2023, the Integrity Council for the Voluntary Carbon Market (ICVCM) introduced the Core Carbon Principles (CCPs), a global benchmark for high-integrity carbon credits. These principles establish strict requirements for transparency and sustainable development.

The ICVCM serves as an independent governance body for the voluntary carbon markets (VCM). Its primary goal is to ensure that VCMs facilitate a just transition to limit global warming to 1.5 degrees Celsius.

In addition to the CCPs, the ICVCM has also released the Program-level Assessment Framework. This framework consists of comprehensive criteria and decision-making tools for each CCP. Furthermore, Assessment Procedures have been developed to integrate the CCPs into the VCM. This Framework and Procedures aim to assist carbon-crediting programs like Verra and Gold Standard in verifying their compliance with the CCPs.

In this article, we provide a summary of the CCPs.

CCPs serve as a reliable guide for selecting high-integrity carbon credits

Although the VCM has a global reach and is increasingly connected to governments and the private sector, it still faces a significant challenge when it comes to ensuring the quality of carbon credits. This challenge is particularly important for companies that are considering long-term agreements to purchase credits, as they want assurance that the credits they obtain are of high quality and integrity. The CCPs address this concern on the supply side as they provide a credible and rigorous framework for identifying carbon credits with high integrity. The CCPs are based on the latest scientific knowledge and best practices, ensuring that the credits generate real and verifiable climate impact.

Until now, companies and financial institutions have had to make purchasing decisions in a fragmented and largely unregulated market, lacking clear guidance. The CCPs aim to address these concerns by helping VCM participants identify high-quality carbon credits. They also strive to establish a standard of quality and integrity across the entire VCM, fostering confidence and comparability.

The ICVCM has launched 10 individual CCPs organsied into 3 thematic categories

The CCPs are a comprehensive set of principles that work together and should be considered as a whole. They provide guidance and serve as a basis for evaluating carbon-crediting programs and categories of carbon credits. Additionally, the CCPs allow for tagging CCP-Approved carbon credits with additional attributes that confirm other verifiable aspects related to the mitigation activity.

The ICVCM has introduced a total of 10 individual principles, organized into three main thematic categories namely governance, emissions impact, and sustainable development.

S. No. Core Carbon Principles Thematic Category
1. Effective governance
The carbon-crediting program shall have effective program governance to ensure transparency, accountability, continuous improvement and the overall quality of carbon credits.
2. Tracking
The carbon-crediting program shall operate or make use of a registry to uniquely identify, record and track mitigation activities and carbon credits issued to ensure credits can be identified securely and unambiguously.
3. Transparency
The carbon-crediting program shall provide comprehensive and transparent information on all credited mitigation activities. The information shall be publicly available in electronic format and shall be accessible to non-specialised audiences, to enable scrutiny of mitigation activities.
4. Robust independent third-party validation and verification
The carbon-crediting program shall have program-level requirements for robust independent third-party validation and verification of mitigation activities.
    Emissions Impact
5. Additionality
The greenhouse gas (GHG) emission reductions or removals from the mitigation activity shall be additional, i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues.
6. Permanence
The GHG emission reductions or removals from the mitigation activity shall be permanent or, where there is a risk of reversal, there shall be measures in place to address those risks and compensate reversals.
7. Robust quantification of emission reductions and removals
The GHG emission reductions or removals from the mitigation activity shall be robustly quantified, based on conservative approaches, completeness and sound scientific methods.
8. No double counting
The GHG emission reductions or removals from the mitigation activity shall not be double counted, i.e., they shall only be counted once towards achieving mitigation targets or goals. Double counting covers double issuance, double claiming, and double use.
    Sustainable Development
9. Sustainable development benefits and safeguards
The carbon-crediting program shall have clear guidance, tools and compliance procedures to ensure mitigation activities conform with or go beyond widely established industry best practices on social and environmental safeguards while delivering positive sustainable development impacts.
10. Contribution to net zero transition
The mitigation activity shall avoid locking-in levels of GHG emissions, technologies or carbon-intensive practices that are incompatible with the objective of achieving net zero GHG emissions by mid-century.

Assessment Framework and Assessment Procedures

The Assessment Framework sets out clear criterion to determine if carbon-crediting programs meet the CCPs requirements. When programs successfully meet these requirements, they become CCP-Eligible, indicating their compliance with the principles.

Additionally, the ICVCM establishes criterion for different categories of carbon credits. Each Category undergoes assessment, and if it meets the specific requirements, it becomes CCP-Approved. Carbon credits belonging to CCP-Approved Categories can then be tagged by CCP-Eligible programs accordingly.

The CCPs also allow CCP-Approved Categories to be further tagged with additional identifying criteria known as CCP Attributes. These attributes highlight specific high-quality aspects of the carbon credits that may be of interest to market participants. A carbon credit can have multiple CCP Attributes, but each attribute must be clearly distinguished from others associated with the credit. Currently, the CCP Attributes include (1) Host country authorization pursuant to Article 6 of the Paris Agreement; (2) Share of Proceeds for Adaptation; and (3) Quantified positive SDG impacts.

The Assessment Procedure outlines the process through which carbon-crediting programs and Categories are assessed. It provides a detailed framework for evaluating their compliance with the CCPs requirements.

Way forward

The introduction of the CCPs and the Assessment Framework is a positive step forward as it allows buyers to evaluate the quality and integrity of carbon credits. This, in turn, helps build confidence among buyers in the market.

The ICVCM will now conduct a review to determine how easily different categories of carbon credits can be assessed according to the CCP criteria. Categories that are expected to meet the criteria with high certainty will undergo an expedited approval process. Categories that pose more complex issues will require a more thorough assessment, and the ICVCM will prioritize those that have a significant current or projected market share.

In the near future, programs will have the opportunity to apply for assessment once the Category-level Assessment Framework is released which the ICVCM expects to publish around the middle of 2023.

Authored by Ashutosh Senger

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