A carbon credit represents one metric tonne of CO₂ (or equivalent greenhouse gases) that has been avoided, reduced, or removed from the atmosphere through a certified project. Examples of projects are renewable energy initiatives, forest conservation programmes, or methane capture from landfills.
When you purchase a carbon credit, it’s a claim that you’re supporting the specific project. To ensure that the carbon reduction is real and only accounted for once, the credit, after purchase, must be “retired”. In essence, retiring a carbon credit means permanently removing it from circulation. This step ensures that no one else can buy, sell, or claim the same credit again.
The process of retiring carbon credits
Retiring carbon credits might sound complicated, but it’s actually a straightforward process when you know how it works. Here’s an overview:
- Purchase the credits: The first step is buying credits, this is done via a market actor such as Atmoz who has access to different carbon registries and partners. The most common registries are Gold Standard and Verra’s VCS (Verified Carbon Standard). There are more than 50 registries globally.
- Retire the credits: When it’s time to claim the credits, the acting party that holds the credits, marks them as retired in the respective registry. This involves transferring the credits to a retired status within the registry, including metadata like the date, buyer information, and reason for retirement.
- Get a retirement certificate: Upon retiring credits, the registry provides a certificate or confirmation, which is often shared with stakeholders, customers, or investors as proof of action.
Why retiring matters
Retiring carbon credits isn’t just a technical step—it’s essential for credibility and transparency in carbon markets. Here’s why:
- Avoids double counting: Without retirement, a single credit could theoretically be sold or claimed by multiple parties, undermining its legitimacy.
- Demonstrates accountability: Retiring a credit proves that a company or individual has followed through on their climate commitments.
- Ensures trust in the system: Carbon credits are a key tool in addressing emissions, but their value depends on accurate and honest usage. Retiring credits ensures the system works as intended.
How does Atmoz retire carbon credits on behalf of customers?
Atmoz has a robust and thorough process for retiring carbon credits across different registries. Atmoz registers and tracks all credit purchases (transactions) that are traded on behalf of customers and partners. Each transaction is given a unique code. The transactions are either individually retired or retired in batches depending on customer preferences and type of purchase, the archive of retirements is accessible for Atmoz customers.
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