COP28: Netherlands, Germany, France, Spain, Finland, the federal government of Belgium and Austria propose framework to prevent greenwashing and restore integrity in voluntary carbon markets

Effective and trustworthy voluntary carbon markets can play a role in supporting faster and more ambitious climate action. They facilitate trade in carbon certificates, where one certificate equals one ton of CO2. Based on these certificates, organizations and companies make climate claims.

However, without robust standards and safeguards, the use of carbon credits can undermine climate action and cause environmental or social harm. Low prices, a lack of transparency and the absence of clear guidance, currently risk delaying the urgent near-term mitigation that the market could in fact provide.

That’s why a group of European countries today propose joint recommendations to improve the integrity of the voluntary carbon market. These recommendations aim to ensure full transparency, high-quality credits and credible claims. They are designed to help companies make choices in line with Paris. They can be adopted immediately by the market – in the long run they serve as input for frameworks at the EU-level. The group consists of the Netherlands, Germany, France, Spain, Finland, the federal government of Belgium and Austria.

The recommendations are to:

  1.  Map direct and indirect emissions and draw up a climate plan with clear emission reduction targets in line with Paris.
  2. Prioritize emission reductions in own organization and value chains, before looking at the use of carbon certificates.
  3. Formulate clear claims in response to the use of carbon certificates while providing sufficient details to avoid misleading. And indicate whether the certificates are used to meet own climate goals (offset claim) or contribute to meeting climate goals in the host country (contribution claim), to avoid double claiming.
  4. Buy certificates of high quality that represent real, additional and permanent mitigation.
  5. Pay attention to the situation in the host country and how the purchase of carbon certificates there contributes to sustainable development goals.
  6. Report and provide transparency on the use of carbon certificates.

Minister of Climate and Energy Rob Jetten: "Greenwashing is detrimental for trust in companies, the functioning of markets and for the climate. This is why today we are proposing a framework to improve the integrity of voluntary carbon markets. Our concrete recommendations give guidance to the market and direction to further EU discussions."

H.E. Agnès Pannier-Runacher, Minister for the Energy Transition, France
"Following the launch, with Spain and the Commission, of the “Call to action for Paris aligned Carbon Markets” at the Finance Summit organised in Paris last June, today's Joint Statement is an important milestone towards a higher level of integrity in carbon markets. Its focus on the demand-side claims is innovative and very much needed to bring trust in the carbon markets.”

H.E. Teresa Ribera, Deputy Prime Minister of the Government of Spain and Minister for Ecological Transition and Demographic Challenge, Spain
“Voluntary Carbon Markets can and must play an important complementary role in the fight against Climate Change. With these recommendations we are providing the right direction to the private sector to align their efforts with the long term goals of the Paris Agreement. The EU is committed to provide clear guidelines for VCM and is currently working on a set of regulations that help to build trust and give long-term signals to the private sector.”

H.E. Robert Habeck, Federal Minister Federal Minister for Economic Affairs and Climate Action, Germany
“In order to mobilize the urgently needed investments for a transformation in line with the Paris Agreements goal of keeping 1,5 within reach, we need to establish a carbon market that excludes funding for acitivities that are not aligned with this goal and encourage companies for investments which serve the 1,5-degree pathway. We can‘t afford fictitious transactions. The joint statement on Voluntary Carbon Market gives guidance for corporates on the use of carbon credits.  In a time of high uncertainty its purpose is to boost integrity both on supply and demand side of the voluntary carbon market by ensuring that climate actions contribute to ambition raising and transformational change.”

H.E. Kai Mykkänen, Minister of Climate and the Environment, Finland
“The voluntary carbon market has potential to significantly contribute to Paris Agreement’s goals and provide much-needed finance for global decarbonisation. High environmental integrity of units and true, transparent and reliable claims made on the basis of their use are imperative to unlock this potential. We are happy to have worked with the Netherlands to develop this additional guidance. We hope this guidance increases trust in high-integrity voluntary carbon markets and offers useful tools for market practitioners.”

H.E. Leonore Gewessler, Federal Minister for Climate Action, Environment, Energy, Mobility, Innovation and Technology, Austria
“The private sector plays a vital role on our way to climate neutrality – voluntary carbon markets can support and advance this transition. For them to be reliable and useful we need clear standards and common rules, to avoid greenwashing. This is what we are pushing for together.”