WHAT IS THE
VOLUNTARY CARBON MARKET
It is a system where people or organizations can buy and sell carbon credits, on a voluntary basis, allowing the generation of economic incentives to leverage the implementation of projects to reduce greenhouse gas (GHG) emissions or carbon sequestration, along with environmental and socioeconomic co-benefits, such as the protection of biodiversity and natural capital or the increase of the resilience of the territory.
The Voluntary Carbon Market promotes and facilitates the participation of different market agents, at the individual or organizational, public or private level:
- On the supply side, through projects able to generate carbon credits
- On the demand side, through the acquisition of those credits to offset greenhouse gas emissions or to make financial contributions to climate action
Supply
Stakeholders seeking financial incentives to support the implementation of a project that promotes:
- Carbon capture
- Greenhouse gas emissions reduction
Demand
Stakeholders who, within the scope of their emissions mitigation objectives and commitments or climate action strategies, want to:
- Offset their activities or services emissions
- Financial contribute to climate action
What are carbon credits?
Each tonne of CO2e, reduced or captured by an activity developed by a carbon project registered in the Voluntary Carbon Market, is equivalent to a carbon credit.
Carbon credits can assume one of two forms, depending on when they are generated:
- Future Carbon Credits (FCC) – before the effective emissions reduction or carbon capture
- Verified Carbon Credits (VCC) – after the effective emissions reduction or carbon capture
- FCCs may be particularly relevant as a form of early project financing, especially in the context of natural-based carbon sequestration projects (afforestation or reforestation) that tend to take longer, verifiable climate outcomes.
In the case of carbon capture projects, carbon credits can also assume the classification of Carbon+, valuing projects that, in addition to carbon capture, integrate significant benefits to biodiversity and natural capital.
Carbon credits traded in the context of the Voluntary Carbon Market are issued and verified in accordance with the requirements established in the respective carbon methodology, which reflect the monitoring, verification and reporting procedures that project promoters must follow.
Principles
Credibility
Ensured by realistic and robust reference scenarios
Additionally
Ensuring that the reduction of GHG emissions or the expected carbon sequestration only occur with the completion of the project.
Permanence
Captured emissions offsetting shall be safeguarded
Effectiveness
Carbon leaks must be avoided and accounted for
Follow-up
Through a robust monitoring, reporting and verification process
Transparency
Avoiding double counting of reduced or captured emissions
Sustainability
Generating environmental and socioeconomic co–benefits
Under development
The registration platform of the
Voluntary Carbon Market will allow the:
Registration of different stakeholders (project promoters, credit buyers and verification bodies)
Registration of project for greenhouse gas emissions reduction or carbon capture
Generation and emission of credits and their transactions between registration accounts
Consultation of information regarding all the projects and their credit transactions
Credit cancellation when credits are acquired to compensate for emissions or to contribute to climate action
Credit cancellation when the project promotor needs to compensate for emissions reversal of their project
Legislation
2023
1 SEMESTER
Public discussion
2024
1 SEMESTER
Publication of the Decree-Law n.º 4/2024 of January 5th establishing the Voluntary Carbon Market
Publication of Order no. 3771/2024, of April 8 creates the technical monitoring committee
2 SEMESTER
Publication of the Order n.º 239/2024/1 Establishes the amountsof the fees to be charged by the supervisory and managing entities of the registration platform.
Publication of the Order n.º 240/2024/1 Define the qualification criteria for exercising the activity of an independent verifier of greenhouse gas emission mitigation projects and identifies the managing entity of the qualification system
Publication of the Order n.º 241/2024/1 Establishes the general requirements for the electronic registration platform of the voluntary carbon market
2025
1 SEMESTER
Training and validation of verifiers
Public discussion of the firts carbono methodology
2 SEMESTER
Registration platform in operation
