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The compliance market has evolved around a set of rules and regulations that define issuance, validity and use of emission allowances and offsets. Principally, they relate to the criteria set forth for the Kyoto Protocol`s flexible mechanisms and the European Directive on Emissions Trading (EU ETS). However, no similar framework has existed for voluntary emission reduction actions.

In response to this, the Voluntary Carbon Standard (VCS) is established to provide a credible and simple set of criteria that provides integrity to the voluntary carbon market. Specifically, the Voluntary Carbon Standard ensures that all voluntary emission reductions meet .This will guarantee the quality of your reductions and ensure that they are generated as credible, tradable and recognizable greenhouse gas offsets or credits.

In particular, the Standard seeks to ensure that emission reductions are:

  • Real: All emission reductions must be proven to have genuinely taken place to qualify as Voluntary Carbon Units.
  • Measurable: All emission reductions that are proposed for verification as Voluntary Carbon Units must use recognized methodologies and techniques for quantification.
  • Permanent: In order to offset emissions released elsewhere, it is essential that any VCU represent permanent emission reductions and are not likely to be reversed.
  • Additional: A key factor in the validity of a project based emission reduction is that it should be additional i.e. result in a lower emission level than would otherwise be the case.
  • Independently verified: All emission reductions proposed for certification as Voluntary Carbon Units must be verified by an approved independent third party verifier i.e. the DOE.


The verification is a result-oriented process to determine the emission reductions achieved by the project. It verifies continued compliance with the criteria defined under the Kyoto Protocol. The verification includes:

  • Review of monitoring results and data collection systems linked to emission reductions.
  • Review of established practices and the accuracy of data collected, as well as monitoring equipment.
  • Review of the management system supporting the reported emission reductions.

What is Voluntary Emission Reduction?

Voluntary Emission Reduction actions allow you to take advantage of voluntary efforts to reduce greenhouse gas emissions by following certain regulations and standards.

Voluntary Emission Reductions are reductions that are not mandated by any law or regulation or by convention, but originate from an organization`s desire to take active part in climate change mitigation efforts. This may enable the organization to be recognized as a proactive advocate for new technologies and approaches in this area.

The Voluntary sector also refers to emission reduction projects that are developed outside of the UNFCCC CDM and which provide emission reductions verified by third party accredited organizations. This is called the Voluntary Market because these credits are purchased by organizations which wish to make voluntary emission reductions for Corporate Social Responsibility reasons, rather than for the purpose of complying to targets under the EU-ETS for example.

VERs are similar to CERs, they are validated & verified as per accepted standard by a accredited third party

Why does this market exist?

Many organizations do not have mandatory targets for emission reductions, but still wish to fight Climate Change, e.g., companies in the USA. Several companies with targets also wish to do more, hence the rise of the Voluntary Market, e.g., companies wanting to become Carbon Neutral.

There are two types of Buyers here:

CSR– those who are participating in voluntary offsetting to go green

Pre-Compliance – those who are preparing themselves for a future cap-and-trade regime, by purchasing offsets and reducing emissions now.

What are the benefits?

The voluntary carbon market is now growing because companies, government bodies, non-governmental organizations and others that are often not subject to binding greenhouse gas regulations wish to:

  • Make a quantifiable contribution to reduce emissions.
  • Increase response options and flexibility of carbon management.
  • Enhance public relations.
  • Generate goodwill by entering the carbon market.
  • Cement strategic interest in specific offset projects.
  • Manage corporate social responsibility commitments.
  • Become carbon neutral and/or sell carbon neutral products and services.

Voluntary Carbon Units are providing companies and institutions with a solution to accelerate the shift towards a low-carbon economy. This is done by channeling funds through voluntary offset programs to low-carbon technologies that directly reduce greenhouse gas emissions from the production and consumption of energy and from industrial processes.