Frequently Asked Questions (FAQ)

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About Carbon Offsetting

What is a carbon offset?

A carbon offset is a certificate representing the reduction, removal, or avoidance of one metric ton of carbon dioxide equivalent emissions, the principal cause of climate change. 

Carbon offset projects issue carbon credits, which are their main revenue stream, and without carbon offsets the projects would not be commercially viable. 

Businesses should purchase carbon offset projects after all other methods of emissions reduction and removal have been considered and when the business desires to support the social development co-benefits, such as poverty alleviation.

What basic criteria is used to assess carbon offset projects? 

The below list includes basic criteria that is used to assess carbon offset projects across global industries.

  • Real: Carbon registries start by asking the simple question of whether or not there is evidence that this project will remove, reduce, or avoid emissions.
  • Additionality: Additionality asks whether or not the removed, avoided or reduction in emissions would have been achieved without the carbon offset market. This requirement must be determined by a third party.
  • Measurable: A project must be accurately measurable to be certified by verification bodies. For example, reforestation projects are often monitored by satellite imagery.
  • Permanent: The project must meet a standard to ensure the emission reductions are permanently removed from the atmosphere.
  • Repeatedly Verifiable: Independent third-parties must be able to routinely verify the project is making the stated emission reductions all through the project’s life.
  • Leakage: Ensuring that developing and operating a carbon offset project does not have negative side effects (i.e. emissions from project supply chain).

What does additionality mean? 

To qualify as a carbon offset, the reductions achieved by a project need to be ‘additional’ to what would have happened if the project had not been carried out (e.g. continued as business-as-usual).

For instance, if a project is viable in its own right, say through the sale of energy, or because of government funding, regulation or other policies, then it cannot be used as an offset project as it would have been undertaken regardless of investment secured through carbon markets.

The concept of additionality is very important, as only carbon credits from projects that are “additional to” the business-as-usual scenario represent a net environmental benefit.

What is carbon offset retirement?

In carbon accounting, a carbon offset may only be counted one time towards the reduction of overall carbon emissions. A carbon offset journey comes to end once a company decides to retire the credit as part of their sustainability strategy for that year.

A retired carbon credit cannot be sold, traded or transferred again. Only the purchaser of the carbon credit can ever claim to have reduced emissions & supported associated SDGs. Retirement is done via the carbon offset's respective registry, and buyers are notified once complete.

What types of carbon offset projects are available on the market?

You can find carbon offset projects that address a wide range of categories:

Energy (Renewable/Non-renewable), Energy Distribution, Energy Demand, Manufacturing Industries,Chemical Industries, Construction, Transport, Mining/Mineral Production, Metal Production, FugitiveEmissions from Fuels, Fugitive Emissions from Industrial Gases, Solvents Use, Waste Handling and Disposal, Agriculture Forestry and Other Land Use & Livestock and Manure Management.

Why is forestry so highly regarded?

Land use plays an enormous role in the carbon balance of the planet. Of the emissions generated by humans, around 30% are caused by the unsustainable use of land.

The amount of carbon still stored in land-based ecosystems means that the potential contribution of the preservation or reforestation of a forestry area to mitigating or decreasing the rate of climate change will be significant.

The Paris Agreement emphasises the urgent need for carbon sinks, like forests, to meet the ambition to limit the global temperature rise. A team of researchers at the U.S. Forest Service (USFS) quantified how many additional trees U.S. forests could hold. Drawing on a federal inventory, the researchers found that more than 16% of forests in the continental United States are “understocked” - holding fewer than 35% of the trees they could support. Fully stocking these 33 million hectares of forest would ultimately enable U.S.forests to sequester about 18% of national carbon emissions each year, up from 15% today.

What is the importance of REDD+ projects?

REDD+ stands for efforts to reduce emissions from deforestation and degradation.

REDD+ is built around addressing the drivers of deforestation and unsustainable practices by using carbon finance to enable new land management techniques, restore forests and transform livelihoods through energy access and other clean technologies.

Most emissions from deforestation take place rapidly and is the second leading cause of global warming, responsible for about 15% of global greenhouse gas emissions, which makes the loss and depletion of forests a major issue for climate change.

In addition to mitigating climate change, stopping deforestation and forest degradation and supporting sustainable forest management conserves water resources and prevents flooding, reduces run-off, controls soil erosion, reduces river siltation, protects fisheries and investments in hydro-power facilities, preserves biodiversity and preserves cultures and traditions.

How is project risk managed?

Some projects are at a heightened risk of being impacted by unforeseen events, such as forest fires, which could result in the sequestered carbon being re-emitted into the atmosphere. The registries have put tools in place to guarantee that even in the case of such an event.

This is managed by the registries who set aside a risk-adjusted percentage of the emission reductions and removals achieved, which are then placed into a global buffer pool. These “buffer credits” are managed by the registry (not by the project owner) and can be cancelled in cases where reversals occur. This is to say that the buffer pool works much like insurance. The project owner pays a “premium” in the form of emission reductions that are deposited into a buffer account, which, in turn, is managed by an independent standards body (the “insurer”). If and as reversals occur in any single project in the system, the carbon losses resulting from them are covered through the cancellation of an equivalent number of buffer credits from the buffer pool.

What does the term carbon neutrality mean? 

To start, the term ‘carbon footprint’ is used to describe the direct and indirect emissions associated with a product, activity or organisation.  The term ‘carbon neutral’ is used when emissions from a product, activity or organisation are balanced or compensated for through an opposite emissions impact, so that there is a zero net impact on the climate.

The ‘carbon neutral’ concept is well understood; however, there is no universal definition. It is generally accepted that it includes the direct emissions from operations and the emissions from electricity used by the organisation (scope 1 and 2 emissions in the Greenhouse Gas Protocol).  Some organisations extend the boundaries of their influence to include business travel, the use of their products or the emissions associated with the processing of purchased materials (scope 3 emissions) but currently there is no universal consistency.  

What is the difference between removed, reduced and avoided emissions? 

Emission removal is when existing carbon in the atmosphere is sequestered, which is the long-term storage of carbon dioxide or other forms of carbon to either mitigate or defer global warming & climate change. The most prominent strategies for achieving removals today involve “nature-based climate solutions” (NCS), which sequester carbon in forests, soils, and other terrestrial reservoirs.

Emission reduction is the means by which you are able to reduce the carbon dioxide or other forms of greenhouse gasses being produced or released. Energy efficiency projects, such a cookstove distribution, burn much more efficiently and use up to 58% less firewood than a traditional open fire.Thus, reducing carbon dioxide or other forms of gasses entering the atmosphere.

Emission avoidance is helping to achieve atmospheric CO2stabilisation and the subsequent decline. This prevents, in the first place, CO2 from entering either the atmosphere or less stable carbon pools on land and in the oceans. Forest conservation & management projects are great ways to ensure we avoid the harmful effects of deforestation, which would release harmful emissions back into the atmosphere.

All three types are needed for the world to slow & reverse climate change.

How are projects priced?

The standard registries sell verified emission reductions (carbon credits) on behalf of participating project developers. To ensure that projects remain viable, a minimum price is applied for each different project type. This minimum price is usually calculated based on a fair trade carbon credit pricing model and adjusted by x cents for every $ of shared value. This takes into account the added benefits delivered beyond simply reducing carbon. With these minimum prices as a starting point, project developers then choose what price to sell their credits.

Each project needs to take into account the cost of the project itself and the value placed on the beyond carbon benefits that it delivers – this will vary from one project to another. The credits sold from any project need to account for the long-term viability of the project.

Market prices are also subject to the normal supply & demand influences, with recent prices broadly reflecting an oversupply of projects. As an example, Asia-Pacific energy generation projects have seen an increase in supply, creating a backlog of older vintage projects. Whilst North American forestry solutions are growing in popularity and shorter in supply. Hence pricing differentials have started to emerge between type of project, geographical location, age of credit issuance and associated co-benefits.

How old the carbon offset is (‘vintage’) has also started to impact the perception of project quality. However, projects runs for multiple years generating a number of credits each year. Not all the credits are bought every year, so smaller amounts float around on the market and are often perceived as less valuable, but “old” carbon offset are just as relevant as a new one, it doesn’t matter when in time the emission reduction took place.

'Additionality' - whether decarbonisation would have happened without offset revenue - also impacts pricing, in particular this has affected the price of many energy generation projects in recent years. In this package of projects, there is built in fees to account for the process of sourcing credible offsets, producing the packaged offer & normal business running costs. 80% of funds are still funnelled towards the project and its environmental & social impact.

What is a Pending Issuance Unit (PIU)

When a new woodland is planted all of its carbon capture potential is in the future – i.e. it will only capture CO2 from the atmosphere as the trees grow. This means that, technically, there aren't really any carbon credits available until the trees have at least done some of that growing, because until that time no carbon has been captured. A typical woodland, because there are some emissions involved in its actual planting, may only begin to achieve overall carbon capture in its 10th year. The Woodland Carbon Code methodology, adopted on our UK project bundle allows them to not only estimate, with a high degree of confidence, the total carbon capture potential of woodland, it also allows them to estimate when it will occur. This means they have a picture at the start of a project of how many "carbon credits" it will achieve, and when.

Due to the significant cost & work involved before any carbon capture is achieved, it is often necessary to sell the future carbon credits that a woodland will achieve at the time of planting. In order to track such sales transparently a special type of credit was created under the Woodland Carbon Code. This credit, called a Pending Issuance Unit (PIU), is a kind of promissory note – confirming that the buyer owns a given amount of the woodland's future carbon capture. Because we know at the start of the project how much carbon capture the woodland is likely to achieve, and when, then we can be sure to issue only the right number of PIUs. Over time, as the trees grow, the PIUs are converted in sequence to a different type of credit – a Woodland Carbon Unit (WCU) - representing the carbon actually captured by the trees. WCUs are the type of credit that can be formally 'retired' against an organisation's emissions. 'Retirement' simply means that the credits are cancelled so they cannot be used again.

About molecu

What can you expect from molecu?

We bundle projects together. Your purchase includes offsets from unique projects that maximize Sustainability Development Goal Impact for People, Planet & Ecosystem. This tailored project bundling ensures a comprehensive offsetting strategy is deployed.

We provide Sustainability Reporting. We pull together a Credibility Report to help communicate the complexities of carbon offsetting, plus each project includes a individual Offset Certificates.

We have also developed a badge to display on email signatures or website illuminating the decarbonising work you will be doing.

How does molecu Curate the Project Bundle?

We believe there is too much choice available in the voluntary offset market.  To make this easier for our customers, we work closely with project developers to find the best collective projects, that we believe are most meaningful to our customers.  

We look at the impact to CO2, making sure as a bundle it Removes, Reduces & Avoids, as we believe each have a place in the climate change efforts.

We try maximize the UN Sustainable Development Goal (SDG) impact, as a bundle, one purchase can therefore support more goals than isolating projects on their own.

We also try to diversify the geographical representation of projects.  Every country is affected by global warming and every country needs to support its reversal.  But we also recognize that local initiatives can be equally powerful from a social and community perspective.  As a result, our package includes global & local orientated projects.

What happens when I make the purchase?

When you purchase carbon credits from molecu to offset your emissions, you are allowing us to:

  • Transfer the full cost of the carbon credits to the project offset developer.
  • Retire the carbon credits on your behalf so no one else would purchase them.
  • Provide you with carbon credits certificates that prove the retirement of credits on your behalf.
  • Provide you with a credibility Report to be shared with your customers and investors.
  • Provide you with high quality badge designed by our inhouse designer.

Your purchase on molecu allows project developers to continue removing, reducing and avoiding carbon emissions. It allows molecu to continue the development of a credible and value adding carbon marketplace for all businesses.

About Sustainability and Development Goals

What are sustainability goals? 

The Sustainable Development Goals (SDGs) are a set of seventeen Global Goals and 169 targets agreed on by the UN General Assembly as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

They provide a framework when certifying the project to ensure that climate action is pursued in tandem with sustainable development. Each project is reviewed against the UN SDG goals and attributed the relevant goal achievement.

What roles do offsets play in the wider climate change efforts? 

All countries and societies need to be actively addressing climate change. We believe offsetting is one of the many means of removing, reducing or avoiding emissions. We actively encourage business and consumers to first take action on controllable parts of their footprint.

When those actions have been exhausted, offsetting can be a impactful way to manage the residual emissions & support people, planet and ecosystem. Offsets can also help reduce the cost of abatement, which for many businesses is the biggest hurdle. We encourage business to view these investments in people, planet and ecosystem as a means of protecting your business for the future.

What more can business do to reduce emissions?

Scope 1 - Are the direct emissions from machinery that you own or control such as a diesel generator.

Start by identifying the sources & assessing the data you have - emission sources can be identified by creating a questionnaire, requesting information about the types of fuels used & how fuel is consumed.

Measure carbon content - this is a measure of the total carbon in the fuel and can be determined through emission factor data.

Quantify the total emissions profile. Calculate Scope 1 stationary combustion emissions using a simplified GHG emissions calculator or similar.

Scope 2 - Are the indirect emissions from the generation of purchased energy.

Identify and understand the risks and opportunities associated with emissions from purchased and consumed electricity.

Identify internal GHG reduction opportunities, set reduction targets and track performance. Engage energy suppliers and partners in GHG management.

Communicate progress to stakeholders and be transparent in public reporting.

Scope 3 - Are the indirect emissions from your customers using your products.

Supply chain (Scope 3) emissions are difficult to quantify, there is mathematically no limit to the number of pathways that can contribute to total supply chain emissions. As business grows, complexity grows which leads to a level of uncertainty. We would always advise business to 'make a start' and incorporate a reasonable level of calculation as a base layer and as skills & experience grows, you can expand the calculations & methodology.

We recommend further reading and advice but as a first step, start talking to your supply chain how they can support your aims to to remove, reduce and avoid.

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