Mercado Voluntário de Carbono
PT
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Tool for climate action​

Voluntary Carbon Market

The Voluntary Carbon Market is a tool that aids in meeting the national climate action goals, hastening the transition to a carbon neutral society, and reinforcing the commitment to the «Sustainable Development Goals»

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FAQ

1. How Carbon Markets Work

The voluntary carbon market is a system for buying and selling carbon credits that generate economic incentives to leverage the implementation of projects to reduce greenhouse gas emissions or sequestrate carbon. 

It focuses on projects to reduce greenhouse gas (GHG) emissions and carbon sequestration projects, developed in Portugal, which promote the mitigation of GHG emissions, subject to specific eligibility criteria, emission accounting and monitoring, reporting and verification measures by an independent entity, being generators of carbon credits that can be traded or used to offset emissions or to contribute to climate action.

The voluntary carbon market aims, among other objectives, to contribute to the mitigation of GHG emissions in the national territory and to the fulfilment of the national, European and international commitments assumed by Portugal in terms of climate change mitigation, in line with the objectives set out in the Roadmap for Carbon Neutrality 2050 and established in the Climate Framework Law.

The voluntary carbon market comprises:

  1. GHG emission mitigation projects;
  2. The carbon methodologies recognized for each type of project;
  3. The project certification scheme and their credits, by an independent verification body;
  4. The platform for registering projects and carbon credits;
  5. Carbon market agents;
  6. The competent authorities.

The following are agents of the voluntary carbon market:

  1. Promoters of GHG emission mitigation projects;
  2. Individuals and organizations, private or public, that acquire or use carbon credits;
  3. The independent verification bodies that are responsible for the verification of projects and their credits.

The competent entities within the scope of the MVC are:

  1. APA – Agência Portuguesa do Ambiente, I.P., as supervisory entity;
  2. ADENE – Agência para a Energia, as the managing entity of the project and credit registration platform.

The Voluntary Carbon Market differs from the EU ETS  because the participation of the different stakeholders is voluntary and does not establish constraints for emissions reduction or carbon capture.

The reliability and credibility of the carbon credits generated under the MVC are guaranteed by:

  1. Existence of a robust and independent process for monitoring, reporting and verification of projects and credits;
  2. Use of methodologies validated by a Technical Monitoring Committee, which considers reference scenarios that translate, in a reasonable and conservative way, the situation that would exist in the absence of the project to account for GHG emission reduction or carbon sequestration;
  3. The monitoring of market activity by the supervisory and management entities.

No. The same project cannot be simultaneously registered in the MVC and in other voluntary carbon markets, public or private, existing at the international level. This limitation aims to reinforce the principle of transparency, avoiding the existence of double counting of carbon credits (i.e. that the same reduction of GHG emissions or carbon sequestration is used in several systems), contributing to the reliability and credibility of the carbon credits generated under the MVC.

The MVC aims to promote the implementation of GHG emissions mitigation projects in the national territory, through the financing of proximity projects with a local impact, accelerating the climate transition. In this sense, within the scope of the MVC, appropriate methodologies adapted to the national reality will be approved, contributing to the realistic accounting of GHG emission reductions or carbon sequestration.

In addition, MVC is a non-profit initiative, regulated by the governement, in alignment with European Union law regarding the Carbon Removal and Carbon Farming Regulation (CRCF), which gives credibility and transparency to MVC, aligning with the objectives of promoting and conserving natural capital.

The following fees are foreseen associated with MVC:

  1. Opening and maintaining an account, for market agents who register on the MVC platform;
  2. Registration of projects on the platform, for promoters of emission reduction or carbon sequestration projects.
  3. Carbon credit transactions, for carbon credit purchasers, regardless of their future use;
  4. Approval of methodologies proposed by market agents.
 

Promoters of projects to be developed in priority areas must communicate the exemption from the project submission fee to the platform managing entity. Fees corresponding to projects registered in the autonomous regions will revert to them.

The fees value and their application conditions are set by the government order No. 239/2024/1.

2. Projects

The project (and all information associated with it) must be submitted to the MVC registration platform for further validation by an independent verification body. The platform is being developed so, at this stage, you should register your expression of interest in submitting a project, using the available form. In this way, you will be informed whenever there are relevant developments.

For a project to be eligible, it must be a greenhouse gas emission reduction or carbon sequestration project belonging to one of the eligible typologies and must comply with the set of requirements determined in the respective carbon methodology.

You will be able to select a verification body for your project through the list of qualified verification bodies that will be available and updated on the MVC platform. The selection of a verification body by the project promoter should take place at the time of initial validation, after the submission of the project, and whenever a verification is required.

The priority areas for the development of projects correspond to the vulnerable territories identified in Portaria No. 301/2020 of December 24 (in particular those with Landscape Reorganization and Management Plans (PRGP) or Integrated Landscape Management Areas (AIGP), established under the terms of Resolução do Conselho de Ministros No. 49/2020, of June 24, as well as areas that are part of Forest Intervention Zones (ZIF), Baldios, Natura 2000 Network and National Network of Protected Areas.

Burnt forest areas or other areas that, due to their nature, require intervention, identified by ICNF, I. P., or by APA, I. P., may also be considered priority areas.

The specific eligibility criteria for priority areas are defined in the respective methodology and allow for the translation of the vulnerability and critical situation of the territories defined as priority areas.

Projects carried out in priority areas have the following benefits:

  1. Project promoters are entitled to exemption from the respective project registration fee;
  2. Projects contribute only 10% of the credits issued to the guarantee grant; and
  3. Project promoters developed in priority areas are entitled, at the end of the project, to the return up to 40% of the credits that have been forwarded to the buffer account (provided that there has been no reversal of emissions).

Yes, a project submitted to the MVC can cumulatively have certifications or recognitions attributed based on other standards or references, as long as they do not have associated carbon credits that lead to double counting. For example, nature-based sequestration projects may have certification that proves sustainable forest management.

3. Risk Management

The reversal of CO2 emissions only occurs in carbon sequestration projects, namely when the amount of carbon sequestered at a given verification time is lower than at the previous verification measurement.

Intentional reversals are reversals that can be attributed to the promoter due to non-compliance with the project plan or with the duty of implementing risk minimization measures.

Unintentional reversals occur when they are not foreseen in the methodology associated with the project typology and are caused by natural phenomena such as floods, droughts, wildfires or other situations, as long as it is proven that the project promoter had no influence or could not cancel or mitigate the effects of the situation and that it has adopted the risk mitigation measures foreseen in the project plans.

Reversals of emissions that may occur over the duration of the project have no impact on the carbon credits already generated and issued by that project that have been transacted between the promoter and third parties.

Credits generated and issued by the project that have not been transacted and are available in the project promoter’s registration account are cancelled and, if these are not sufficient to cover the reserval amount occurred, the promoter may use the buffer account or insurance to compensate for the credits already transacted that are missing.

If, even so, the credits are not sufficient to compensate for the reversal that has occurred, the project promoter must replace, within a maximum period of one year, the number of missing carbon credits and cancel them, or submit one or more carbon projects, whose credits will be cancelled in the amount of credits still needed.

The use of the buffer account, by the promoter, is limited to its own contribution.

Credits generated and issued by the project that have not been transacted and are available in the project promoter’s registration account shall be cancelled in double the amount of the reversal that occurred. If those are not sufficient to cover double the amount of the reversal that has happened, the project promoter has to refund, in a maximum of one year, the number of carbon credits still needed and cancel it, or submit one or more carbon projects whose credits will be cancelled in the amount of credits still required.

The buffer account aims to safeguard situations where an unintentional reversal of sequestered emissions occurs during the duration of the project. The project promoter can contribute to the constitution of this buffer account, using 10% of the Future and Verified Carbon Credits of the carbon sequestration projects developed in priority areas, and 20% of the remaining carbon sequestration projects.

Provided that no reversal of emissions occurs, at the end of the project period, up to 30% of the credits contribution to the buffer account are returned to the promoter, or up to 40% in the case of projects located in priority areas. This return is carried out in a phased manner, under the terms defined by the respective methodology.

4. Credits

The purchase of carbon credits can be aimed at offsetting carbon emissions from an activity or as a contribution to climate action.

Offsetting carbon emissions by an organization should be part of a clear strategy for decarbonization and reduction of GHG emissions, with a view to achieving carbon neutrality, in a medium-long term perspective, in line with the goals set at the national and international level in terms of climate action.

Carbon credits purchased for the purpose of offsetting emissions should be cancelled so that organisations can claim their emission reductions, and should always take into account the Directive on the statement of reasons for and reporting of explicit environmental claims – the Environmental Claims Directive.

Climate contribution refers to the acquisition of carbon credits, by an organization or individual, with the aim of contributing to the mitigation of climate change by supporting projects that allow the reduction or sequestration of GHGs, not with the purpose of offsetting emissions from their activity.

No. The acquired credits  be used or claimed to fulfil European or international obligations, including for the purposes of the European Union Emissions Trading System and the Carbon Offsetting and Reduction Scheme for International Aviation and to meet nationally determined contributions from any signatory party to the Paris Agreement.

Future Carbon Credits (CCF) are carbon credits generated prior to the effective reduction of GHG emissions or carbon sequestration by the project, based on an estimate presented by the project promoter, in accordance with the project methodology and duly validated by an independent verification body.

Upon indication of the promoter, and as long as provided for in the methodology followed by the project, CCF may be issued in an amount that does not exceed 20% of the total carbon credits foreseen for the project lifetime.

At periodic verification moments the issued future credits become verified changing their status (CCV) in order of issuance, regardless of the credit holder. Once all the project’s CCFs have been converted into CCVs, the project issues verified carbon credits.

Carbon+ Credits are credits that, in addition to carbon sequestration, incorporate significant additional benefits in terms of biodiversity and natural capital, and can be issued if the respective methodology has a method to calculate and monitor that benefit.

The price of each carbon credit will depend on several factors and must be agreed upon by the project promoter, holder of the credits, and the respective buyer.

5. Methodologies

Carbon methodologies aim to establish a set of criteria and guidelines for the recognition of projects and the credits they generate. All projects that are submitted to MVC using a given methodology must comply with all the requirements defined in it.

The methodologies shall establish, without prejudice to other relevant aspects:

  1. Eligibility criteria and guidance on the assessment of the additionality of the project, including the determination of the baseline scenario;
  2. Method of quantification (ex-ante and ex-post) of GHG emission reductions or carbon sequestration associated with the carbon project, based on the duration of the project and in accordance with existing good practices;
  3. Duration of the carbon project, including, where applicable, the minimum and maximum durations, as well as relevant information on the possibility of renewing that period and guidelines for defining the start of implementation of the project;
  4. Guidance for the determination of risks, including those of reversal of emissions, and measures to mitigate those risks;
  5. Requirements for monitoring, reporting and verification, including the monitoring plan, the monitoring report and the verification report, including specifying the frequency of submission of such reports;
  6. Guidelines for the determination of potential externalities and indicators that allow their evaluation during the course of the project.

Any entity can submit a methodology through electronic means made available for this purpose. The submitted methodologies will be analysed by the Technical Monitoring Committee (CTA) and submitted to a public consultation process, in order to ensure and encourage the democratic participation of all interested parties before approval by APA, ICNF and DGRM, when applicable.

If you are interested in submitting a methodology proposal, you can contact us using the expression of interest form.

The first methodologies are being developed and should be put out for public consultation in the end of 2024.

If there is no methodology under discussion or approved for the type of project that is being considered, the promoter may submit a methodology proposal, following the methodology template.

The list of approved methodologies and their revisions, which can be used for the purpose of registering projects in the voluntary carbon market, will be available at the document section.

6. Verification bodies

Candidates for MVC verification body qualification must cumulatively meet the requirements defined for this purpose in  the government order no. 240/2024/1, namely, concerning higher education degree, professional experience in the activity sectors to which they are applying and approval in qualification exam.

If you are interested in being an MVC verification body you can contact us using the expression of interest form .

Mercado Voluntário de Carbono

This market aims to mobilize different stakeholders towards sustainable development goals, promoting greenhouse gas mitigation and environmental and socioeconomic co-benefits.

USEFUL LINKS

APA

ADENE

CONTACTS

(+351) 214 722 800

carbono@adene.pt