How to Generate Carbon Credits
Did you know that any company or rural producer that implements projects to reduce carbon emissions can generate and trade their carbon credits?
How to Generate Carbon Credits Did you know that any company or rural producer that implements projects to reduce carbon emissions can generate and trade their carbon credits? How many tons of carbon are emitted per hectare?
The amount of carbon emitted or stored per hectare of forest can vary depending on the type of forest and environmental conditions. For example:
Native Amazonian forests have an average carbon stock of 167.7 tons per hectare. Source: Carbon stock of the Amazon forest is 167.7 tons per hectare, research shows – FAPEAM
The Atlantic Forest has an average density of 50 tons of organic carbon per hectare. Source: Atlantic Forest has the highest concentration of carbon per hectare among the country’s biomes – ((o))eco
Some commercial species, such as eucalyptus, can sequester up to 45 tons of carbon per hectare per year, while native species have an average of 2.59 tons per hectare per year.
These numbers highlight the importance of forests in carbon capture and climate change mitigation.
What are the steps to develop a project?
Developing a carbon credit project involves several important stages to ensure its feasibility and compliance with certification standards. Here are the main steps:
Feasibility Study: Technical, economic, and environmental assessment to determine the project’s viability and identify opportunities and risks.
Project Design Document (PDD): Creation of a detailed plan that includes location, methodology, estimated emission reductions, and social and environmental benefits.
Validation: Independent audit to validate the PDD and ensure the project meets certification criteria.
Project Registration: Submission of the project to the chosen certification standard, such as VCS (Voluntary Carbon Standard) or Gold Standard.
Monitoring: Periodic data collection to track emission reductions or greenhouse gas removals.
Verification: Audit to confirm monitoring results and the number of credits generated.
Issuance of Credits: Certification and issuance of carbon credits based on monitoring and verification reports.
Commercialization: Sale of credits in the regulated or voluntary market.
These steps ensure the credibility and environmental integrity of carbon credits.
What is the difference between the voluntary and regulated markets?
The main difference between the voluntary and regulated carbon markets lies in how carbon credits are traded and the context in which they are used:
Regulated Market: Mandatory and governed by public policies, such as the Kyoto Protocol or the Paris Agreement. Companies and countries participating in emissions trading systems (cap-and-trade) must buy carbon credits to meet legally established emission-reduction targets. An example is the European Union Emissions Trading System (EU ETS).
Voluntary Market: More flexible, used by organizations or individuals who want to reduce their carbon footprint voluntarily, without legal obligation. Here, carbon credits are acquired mainly to improve corporate image or reinforce commitments to sustainability.
While the regulated market follows strict rules and is more complex, the voluntary market offers greater freedom for innovation in emissions-reduction or carbon-capture projects.
Are you considering exploring either market? Get in touch with GETS AMBIENTAL.
Which market operates in Brazil?
In Brazil, both regulated and voluntary carbon markets operate, but with distinct characteristics:
Regulated Market: Brazil has recently advanced regulation with the creation of the Brazilian Greenhouse Gas Emissions Trading System (SBCE), established by Law No. 15,042/2024. This system allows companies to trade carbon credits to meet mandatory emission-reduction targets. Additionally, initiatives like ProFloresta+, led by Petrobras and BNDES, have boosted forest restoration projects in the Amazon.
Voluntary Market: This market is also active in Brazil, with companies and individuals purchasing carbon credits to voluntarily offset emissions. The country has strong potential due to its biodiversity and carbon-capture capacity.
Both markets offer opportunities to promote sustainability and generate revenue.
Is there a minimum land area required to carry out projects?
There is no fixed minimum land size for carbon credit projects in Brazil. Small properties can also participate as long as they implement sustainable practices and meet certification standards such as VCS (Verified Carbon Standard) or the Gold Standard.
However, land size can influence economic viability, as smaller areas may generate fewer carbon credits, affecting monitoring and certification costs. In some cases, small landowners can join cooperatives or grouped projects to share costs and increase project scale.
What is the importance of carbon credits?
Carbon credits play a fundamental role in combating climate change and promoting sustainability. Their importance can be seen in several areas:
Reduction of Greenhouse Gas Emissions: Carbon credits create financial incentives for projects that reduce or capture emissions.
Support for the Green Economy: They encourage investments in clean technologies, forest conservation, renewable energy, and sustainable agriculture.
Environmental Valuation: Natural resources such as forests become economic assets, promoting conservation.
Achievement of Global Goals: They help countries and companies reach emission-reduction targets established by international agreements like the Paris Agreement.
Social and Economic Benefits: Carbon credit projects often improve local communities through job creation and sustainable development.
They also strengthen global awareness of environmental impact and support the transition to a more sustainable economy.
What are the requirements to generate carbon credits through forest conservation?
To produce carbon credits in forest conservation projects, it is necessary to meet a series of technical, legal, and methodological requirements. Key elements include:
Eligibility of the Area: Assessment of the site’s capacity to generate carbon credits, considering vegetation, soil, location, and land-use history.
Approved Methodology: The project must follow a methodology recognized by certification standards such as VCS or Gold Standard, including the calculation of avoided emissions or sequestered carbon.
Action Plan: A detailed plan describing conservation activities, timelines, performance metrics, and monitoring strategies.
Community Engagement: Many conservation projects require the participation of local communities to ensure social and economic benefits.
Monitoring and Reporting: Ongoing monitoring systems must measure results and produce periodic reports.
Validation and Verification: Independent audits ensure transparency and credibility.
Legal Compliance: Alignment with local and national environmental legislation, such as Brazil’s Forest Code.
These requirements ensure credits are generated transparently and sustainably.
Who buys carbon credits?
Carbon credits are purchased by various organizations and individuals, depending on their goals:
Companies in the Regulated Market: Industries with mandatory emission caps—such as energy, transportation, and manufacturing—must buy credits to meet legal requirements.
Companies in the Voluntary Market: Organizations seeking to improve sustainability or corporate image voluntarily purchase credits. These include multinational corporations, sustainability-focused startups, and small businesses.
Governments and Public Institutions: To meet international agreements or support national sustainability initiatives.
NGOs and Research Institutions: They may acquire or generate credits to finance environmental programs.
Individuals: Frequent travelers or environmentally conscious individuals may buy credits to reduce their carbon footprint.
Buyers operate in both regulated and voluntary markets, and interest continues to grow as environmental awareness increases worldwide.
How many trees are needed to absorb 1 ton of CO₂?
The number of trees required to sequester 1 ton of CO₂ depends on several factors, such as species, age, soil conditions, climate, and management practices. On average:
A young tree sequesters around 5–10 kg of CO₂ per year.
A healthy adult tree captures 20–22 kg of CO₂ per year.
Based on these values, approximately 45–50 adult trees are needed to sequester 1 ton of CO₂ in one year.
Fast-growing species like eucalyptus may sequester more CO₂ in less time, while native species tend to capture less but provide greater biodiversity and ecological benefits.
What are the benefits associated with carbon credits?
Carbon credits offer several significant benefits that extend beyond climate mitigation:
Combat global warming: By reducing greenhouse gases, they help stabilize the climate.
Financial incentives: They create economic opportunities by turning carbon capture into a tradable asset.
Environmental preservation: They support forest and ecosystem conservation through sustainable practices.
Social benefits: Many projects generate jobs, improve living conditions, and promote sustainable development in local communities.
Support for the green economy: They accelerate the shift toward cleaner industrial, agricultural, and energy practices.
Emission compensation: They allow companies and individuals to offset their carbon footprint.
These benefits position carbon credits as an essential tool to balance economic growth and environmental preservation.