Our team has prepared a LawFlash discussing the Biden administration’s recently released Voluntary Carbon Markets Joint Policy Statement and Principles for High-Integrity Voluntary Carbon Markets. Through the Voluntary Carbon Markets (VCMs), entities that engage in activities that remove or reduce carbon emissions from the atmosphere may generate carbon credits that can be sold, and entities that emit carbon dioxide can purchase carbon credits to offset carbon emissions.
This joint policy statement signals a commitment to addressing existing challenges with the VCMs and identifies principles to promote the function and integrity of VCMs and responsible VCM participation. It recognizes that high-integrity and high-functioning VCMs can present economic opportunities for sellers of carbon credits to transfer high-quality carbon credits to buyers seeking to achieve their decarbonization goals. The principles emphasize transparency, market integrity, accountability, and accurate measurement to ensure the credibility of carbon credits.
Companies transacting in the VCMs must ensure that the carbon credits are valid and verifiable and that associated net-zero and carbon-neutral representations and disclosures are accurate and supported amidst increasing scrutiny and regulatory oversight.