The carbon market can be a quite confusing territory, full of new terms and abbreviations. To make it easier to understand the different products that can hide behind a carbon credit we recreated this graphic, inspired by the University of Oxford principles for credible carbon offsetting. Check out more about these principles on the university’s website. We recommend this as a crucial read for anyone who wants to get involved in the market, as a supplier or buyer of carbon credits.

The most important differentiation that has to be made to understand the carbon market, is the separation of credits based on emission reductions or emission removals. Reductions can come with (Level II & III) or without (Level I) carbon storage. These credits constitute the large majority on the markets today, especially coming from the installation of renewable energy and avoided deforestation. They are important and can be a key enabler to accelerate the use of low emission technology. Unfortunately they are not necessarily suitable to be used in the context of net-zero claims made by corporations and institutions as they do not reduce the emissions of the credit claiming entity but of another sector. 

Carbon removal (Level IV & Level V), however, does lead to the removal of carbon dioxide from the air and can as a consequence actually reduce the emissions of the credit claiming entity. These credits can be seen as next generation carbon credits as they will and have to replace credits coming from emission reductions in the long run. Within the credits based on carbon removal we can separate between carbon removal with long and short lived storage. Afforestation is considered as a short lived storage because the trees can be cut down or a fire can destroy the carbon sink. Enhanced weathering on the other hand is a long lived storage, as it removes carbon in a geological time scale. Woonderlands’ carbon credits are based on a combination of Level IV and V credits and can be used for net-zero claims as they do remove carbon from the air and store it permanently. Read more about our approach and the resulting resilience in our last blog post. 

Get in touch to learn more about our carbon credits and how they can help you with your climate goals.  

Graphic: To reach our climate goal of 1.5 Degrees warming, carbon removal approaches will gain importance throughout the century.