Neutralize unabated emissions


Hopefully you are able to help me.

I have a simple question regarding to financial institutions net-zero draft. The net-zero draft clearly implicates that it would like to encourage FI`s to finance climate solutions and avoid buying carbon credits. I just like to confirm that when FI is financing carbon removal solution, what should we do to the carbon credits that the carbon removal investments sells.

For example if we have invested a solution that removes 20 000 tons of CO2 annually and sells 10 000 of these as a credits to third party. Are we still able to use this removal to neutralize our unabated scope 3, category 15 emissions?
So in case if our unabated emissions are 20 000 tCO2 and our financed removals are 20 000 tCO2, are we able to claim net-zero even thou 10 000 tCO2 of these financed removals are also sold to third party as a credits?

Referring to this part of the draft:


So we are not sure what is meant by this “exclusive of carbon credits”. Does it mean that we should deduct these credits from the total removal or exclude those out of our calculations?

“Exclusive,” doesn’t mean you deduct, it means that these are not eligible and what is expected is actual investment in renewable energy technologies

Hi Aliki,

Thank you for your help.

Just to confirm, if the credits are not eligible, we should not notice the credits in our accounting of net-zero goals, but should we still report these as a separate information for our stakeholders?

The PCAF new methodologies draft is recommending to report the credits even thou those are not part of the net-zero goal.

Curious to see renewables here as they fail additionality requirements and aren’t per se carbon credit equivelants. a renewable has some carbon albeit usually less per MWh than most grids. Is the idea to use the grid baseline and then capture the delta for financing it? If so won’t it be double counting if the facility owner uses REC/GO’s etc. as instruments sold for credit as “green electricity”?

Agreed. We do not consider renewable energy based “avoided emissions” on our “net number”. As those are not comparable with actual emissions.

We only consider carbon removals when we “net” the emissions and removals.