NZ Report Suggests VCM as Avenue to Scale Blue Carbon Projects
The voluntary carbon market (VCM) with access to international trading would be a more suitable option to facilitate blue carbon projects in New Zealand, than the country’s Emissions Trading Scheme (ETS), initial findings from a government-commissioned report released on Sept. 3 outlined.
Funded by the Nature Conservancy Aotearoa New Zealand and the Ministry for the Environment, the report emphasizes the greater flexibility and financial viability of the VCM for blue carbon projects, which focus on the carbon sequestration potential of ecosystems such as salt marshes, seagrass, and mangroves.
Authors noted that the voluntary carbon market is more likely to facilitate the development of blue carbon projects at scale by creating high-integrity carbon credits potentially holding a premium and access to a large pool of credit buyers. Verification through international registries such as Verra would enable integration with standards such as the ICVCM Core Carbon Principles.
This is compared to the NZ ETS, which despite having benefits such as more stable price signals and potentially lower costs, holds risks including existing price controls, an oversupply of New Zealand Units, and lack of accountability of co-benefits, according to the report.
OPIS last assessed the scheme’s NZU at NZ$62.08/mt ($38.46/mt) on Thursday. International vintage 2024 blue carbon units, registered under registries including the American Carbon Registry, Climate Action Reserve, Gold Standard, and Verra, were marked at an average of $30.76/mt.
However, the report urged the development of a national strategy to scale blue carbon projects, with the government providing clarity about Article 6 of the Paris Agreement and whether carbon credits can be sold overseas to enable the voluntary market.
“Addressing policy barriers and creating an enabling environment has the potential to accelerate pilot projects already underway in New Zealand and support the uptake of blue carbon projects in New Zealand for the international voluntary market, at scale,” said Olya Albot, project manager for nature-based solutions at The Nature Conservancy Aotearoa New Zealand.
The authors also recommended a Maori-led study into the barriers and opportunities for blue carbon projects, with the indigenous group having roles as land owners and customary title owners of coastal marine areas.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Chuan Ong, cong@opisnet.com
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