Tabitha Whiting
Tabitha WhitingContent Marketer
Additionality in carbon offsetting, explained
Additionality in carbon offsetting, explained
Additionality is a key marker of quality in carbon offsetting projects. What does additionality mean? And why is it so important? Let’s find out.
August 29, 2022

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Additionality. It’s a term you’ll hear used a lot in the world of carbon markets. 

And it’s an important one to understand, because it’s one of the key elements in deciphering the difference between high and low-quality offset projects (alongside permanence, single-counting, and accuracy of estimations), so if you’re engaging with offsetting you need to know what it means.

So what does additionality refer to in carbon offsetting? And how can you identify it when evaluating which projects to contribute to?

Understanding the basics – defining additionality

Additionality means that a project results in emissions reductions or carbon removals in addition to the ‘business as usual’ scenario which would have occurred without the project existing – so the project needed to exist for those emissions to be reduced or removed.

Why is additionality so important?

If emissions reductions or removals would have occurred anyway, in the absence of the project, then project developers are effectively rewarded financially for taking actions that were going to happen anyway. Even worse, there has been zero additional impact on the fight against climate change. 

And if no additional positive impact is being made by the creation of a project, we’re straying into the greenwashing territory (even if unintentionally). 

That’s why additionality is so important in a carbon offset project.

At first glance, this all seems pretty straightforward. Surely all carbon offset projects are, therefore, providing additional benefit?

In reality, it isn’t that simple. 

It’s very difficult to prove that a carbon offset project is truly providing additional value. 

In fact, research from Berkeley, Oxford, and Carbon Plan found that 85% of offsets sold today are not additional – so purchasing these credits has no impact on climate change. 

85% of offsets sold today are not additional

The main reason for that is because it requires proof that the project wouldn’t have existed without the sale of carbon credits, which relies on a lot of hypothetical thinking and on the word of the project developer – inevitably bringing uncertainty into the equation.

This is why additionality is such a highly debated topic and a major problem in the voluntary carbon market. So how would you go about assessing a project for additionality?

Diving deeper – how can you identify additionality in a carbon offset project?

For a project to be additional, we need to be confident that the ability to sell carbon offset credits is playing a vital, make-or-break role in the project’s development. 

If it doesn’t, and the project could exist without selling credits, the positive impact the project could make is not additional – because it could have existed anyway. 

Evaluating whether this is the case can be tricky. It means comparison to a hypothetical scenario in which the project exists without any income being made from the sale of carbon offset credits – which inevitably relies heavily on assumptions, estimates, and predictions.

And it also means heavily relying on trust in the word of the project owner or developer, because they’re in the best position to say whether the prospect of selling carbon credits was decisive. But they also have a huge financial incentive to argue that it was, indeed, decisive, because if successful, this brings them a guaranteed source of income.

When it’s hard to prove additionality – forest conservation and renewable energy projects 

These difficulties with additionality have caused major issues in the development of the voluntary carbon market so far. In particular, it’s very difficult to prove additionality when it comes to forestry conservation projects and renewable energy projects.

The additionality problem in forest conservation projects 

Forest conservation projects protect forests from being cut down, typically by incentivising the landowner via the income that can be made from selling carbon credits. 

They’re an incredibly valuable type of project, preventing trees being cut down and keeping carbon stored in established forests. 

But, to be additional we need to be able to create a robust baseline scenario which demonstrates how and when the landowner would have cut down the trees without the sale of carbon credits. It’s common to see forestry conservation projects modelled against a baseline scenario where the landowner rapidly and aggressively cuts down their trees to harvest timber, which is unlikely to be a realistic scenario.

It becomes more clear if we have evidence that there were plans in place to cut down the forest in its entirety in order (for instance to replace it with a palm oil plantation), and that the opportunity to sell carbon credits was enough to motivate the landowner to preserve the forest instead. 

But we still have to trust the word of the landowner that this would definitely have gone ahead. And if the project is going to exist for a long time, we have to determine that this deforestation would still be the case if the stream of revenue from carbon credits were to stop tomorrow. 

As you can see, it’s tricky to 100% prove additionality in a forestry conservation project. But these projects are incredibly important, because in many cases the alternative is that the forest is cut down – sold for timber and/or replaced with a different land use. So we absolutely do need the mechanism of carbon credits to be able to pay landowners not to cut down forests, slowing down mass deforestation and preserving carbon storage.

The additionality problem in renewable energy projects 

Renewable energy projects are very common in carbon offsetting – building wind, solar, or hydropower farms in areas where most energy comes from fossil fuel sources to reduce future CO2 emissions.

We absolutely need to scale up renewable energy, so these are valuable projects. But, they’re also problematic as carbon offset projects, including when it comes to assessing additionality.

Part of being additional means that the project could not exist without the sale of carbon credits, and this typically isn’t the case for renewables.

Renewable energy projects are now relatively easy and affordable to set up – because the cost of renewable energy implementation has dropped massively over recent years, and because many countries also have governmental backing and/or incentives in place to scale up renewables. Therefore, it’s highly likely that a renewable project would have been viable even without the sale of carbon credits, meaning that it cannot be said to be additional.

So, as you can see, there are inherent and unavoidable uncertainties when evaluating additionality in offsetting, and that’s where it gets complicated.

When it’s easy to prove additionality – bio-oil sequestration and enhanced weathering

But it isn’t all bad news when it comes to additionality. 

There are some project types where it’s much easier to prove – so if additionality is a key concern for you when evaluating projects, this part’s for you!

Additionality in bio-oil sequestration projects

Take bio-oil sequestration.

Charm Industrial are taking biomass (such as waste from agriculture) and heating it without oxygen, causing it to turn into a thick, black, carbon-rich liquid known as ‘bio-oil’. This bio-oil is then pumped underground, and because the oil hardens over time this creates a stable, permanent store of CO2 which has been removed from the atmosphere.

Because the bio-oil has been produced specifically with the aim of storing CO2 underground, it’s easy to prove additionality – why else would you bother to produce it in the first place?

That’s why research project Carbon Plan gave Charm Industrial their top rating for additionality, particularly citing that the project had a high set up cost and has a lack of commercial value (i.e. the bio-oil has no other use to be sold for) and so the project clearly would not have otherwise existed, providing evidence of additionality.

Additionality in enhanced weathering projects

Another example of a project type that’s easier to prove additionality is enhanced weathering – accelerating natural rock weathering to remove CO2 from the atmosphere more quickly  and permanently store it in rocks.

UNDO, for example (previously part of the Future Forest Company, and now a standalone sister project) use waste, crushed basalt rock from quarry sites and spreads it on soil to accelerate weathering.

The only possible reason to take this waste basalt and spread it is to generate climate benefits, indicating the project is providing additional climate impact. Further, the only alternative viable use for the waste rock is to be used as feedstock for manufacturing, construction etc – which would result in no carbon removal, so using the basalt in this way is clearly providing additional benefit.

Again, that’s why Carbon Plan give the Future Forest Company (published before the enhanced weathering arm became UNDO) the highest rating for additionality.

For all project types, there are also several respected verification organisations for carbon offsets which have their own rules for identifying whether a project is additional, such as Gold Standard, Verra, or PuroEarth. This makes it easier to identify additionality, so our recommendation would be to look for offset projects which are verified by one of these organisations (or are in the process of being, for newer technologies). 

How Gold Standard checks for additionality

As an example, Gold Standard uses a framework for additionality established by the United Nations Framework Convention on Climate Change (UNFCCC) which has four elements to research in a project to demonstrate additionality:

  1. Identifying whether there are other, viable alternatives to produce the desired outcomes of the proposed project – because if this is the only option it’s likely it would have happened anyway. This includes finding out whether the project activity is legally required, or is likely to be in the near future.
  2. Cost analysis to identify whether the project would be financially feasible without the sale of credits.
  3. Identifying whether there are barriers to the proposed project which would prevent it from being developed or implemented without the ability to sell carbon credits (other than the financial barriers in step 2) e.g. lack of infrastructure or trained labour in the area local to the project.
  4. Analysing other activities similar to that proposed by the project to identify whether the project activity is ‘common practice’. And if other, similar projects have been able to take place without selling carbon credits, identifying what factors made that possible compared to the proposed project.

Each of these 4 elements aims to bring us closer to identifying whether the project genuinely needs to sell carbon credits to exist, and therefore whether issuing carbon credits to the project would enable additional emissions reductions or removals to take place.

This is just one example to illustrate the kinds of methods used to try and determine additionality – different verification organisations have different rules and requirements.

Our advice – work with a sustainability partner you trust to evaluate projects

As you can see, additionality can be a complex subject. 

And it isn’t the only factor when identifying high-quality projects – there’s also permanence, double-counting, estimation accuracy, co-benefits, and more to consider.

It’s also incredibly important to get right, because we need to know that the carbon offset projects we’re contributing to are actually making a real difference. Otherwise we’re doing nothing good for the planet, which is a real shame for organisations that truly want to make a positive difference – whilst also leaving them open to allegations of greenwashing.

Our advice? Consider working with a trusted sustainability partner like Lune which has an established methodology for evaluating project quality – it will take the worry away from the process for you, and gives you an expert partner to lean on in your environmental decision-making.

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