Six types of carbon credits

There are several different types of carbon credits, also known as carbon offsets or emissions reductions. These credits represent the reduction, removal, or avoidance of greenhouse gas (GHG) emissions. Here are some common types of carbon credits:

  1. Renewable Energy Credits (RECs): These credits are generated from renewable energy projects such as wind, solar, hydroelectric, or biomass. They represent the reduction of GHG emissions by displacing fossil fuel-based energy generation.
  2. Energy Efficiency Credits: These credits are earned by implementing energy efficiency measures that result in reduced energy consumption and, consequently, lower emissions. Examples include upgrading to energy-efficient appliances, improving insulation, or using energy-efficient lighting.
  3. Afforestation and Reforestation Credits: These credits are generated by projects that involve planting new forests (afforestation) or restoring and managing existing forests (reforestation). Trees absorb carbon dioxide from the atmosphere, making these projects effective in offsetting emissions.
  4. Methane Capture Credits: Methane is a potent greenhouse gas emitted by various sources such as landfills, agricultural activities, and coal mines. Projects that capture and destroy methane emissions can generate carbon credits.
  5. Agricultural and Land Use Credits: Certain agricultural practices and land management techniques can help sequester carbon and reduce emissions. Credits can be generated by implementing sustainable agricultural practices, adopting conservation tillage methods, or preserving forests and grasslands.
  6. Industrial Gas Credits: Some industrial processes produce potent GHGs, such as hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). Projects that reduce or eliminate these emissions can earn carbon credits.

It’s important to note that the specific types of carbon credits and their availability may vary depending on the carbon market and certification standards. Different organisations and programs may have their own specific criteria and methodologies for generating and trading carbon credits.

Contact one of our carbon specialists today to learn about carbon credits Viridios Capital invests in and how we can work with you to help you meet your net-zero and ESG targets.