After reading through the Net Zero for FIs document released yesterday I find it difficult to separate offsets (i.e. REDD+) and allowances (i.e. EU ETS) from SBTi’s definition of carbon credits. I can see that REDD+ is used as an example of carbon credits, and I would define REDD+ as a project offset. There are some major design differences in these, compared to compliance markets such as EU ETS.
How does SBTi separate allowances and offsets? Are they both covered by “carbon credits”? If so, would this also entail that FIs are unable to use cancellation of allowances in the EU ETS towards its near- or long term net zero goals?