Additionality

Benchmark

The concept of additionality is a crucial aspect in the assessment of all climate projects, regardless of their origin. To be considered a true climate project, the reduction in emissions must be "additional" to what would have occurred in the absence of the project and represent net environmental benefit.

Concept

The additionality aspect is critical in determining the validity of emissions mitigation activities for offsetting purposes. Without it, there is no assurance that the emissions reductions are truly "additional" to business-as-usual. It is important to note that additionality is not a green or red attribute of a climate project. Some projects may be more additional than others, but this does not necessarily mean that less additional projects have less impact in mitigating climate change. The pricing of carbon credits often reflects the degree of additionality, but the credits themselves do not necessarily indicate the level of additionality.

The ICR has established benchmarking criteria for additionality, with projects needing to conform to three levels to be eligible for registration. However, projects may also demonstrate conformity to other levels. The ICR registry labels each project according to its level of additionality based on these criteria. Organizations or individuals looking to offset their emissions through the purchase of carbon credits should be aware of the additionality level of the project they are supporting.

Additionality

Benchmarks

Level 1

Baseline additionality

Compared to the baseline scenario the project needs to mitigate climate change. That is the project must implement actions that are additional to what would occur in comparison to the baseline.

Level 2a

Statutory additionality

The project must implement actions that are beyond requirements stipulated in local legislation or regulations. Projects are statutory additional if their implementation and/or operation is not required by any law, statute, or other regulatory framework, agreements, settlements, or other legally binding mandates requiring implementation and operation or requiring implementation of similar measures that would result in the same mitigations in the host country.

Level 2b

Non-enforcement additionality

Projects are non-enforcement additional if their implementation and/or operation is mandated by local legislation or regulation but are systematically not enforced by authorities in the host country.

Level 3

Technology, institutional, common practice additionality

The project must implement actions that are subject to barriers of implementation or accelerate deployment of technology or activities and carbon market incentives are essential in overcoming these barriers.

Level 4a

Financial additionality I

A project is financially additional if it results in higher costs or relatively lower profitability than would have otherwise occurred in the baseline scenario.

Level 4b

Financial additionality II

The project is financial additional if it faces significant financial limitations that revenues from the sale of carbon credits mitigates or are revenues due to the sale of carbon credits the only source of revenues. When carbon credit revenues are precondition for the implementation of the project and/or carbon credits revenues essential in maintaining the project operations and ongoing financial viability post-implementation then they are considered to be financial additional II.

Level 5

Policy additionality

Implementation of actions may lie out of scope of host country Nationally Determined Contributions under the Paris Agreement and therefore not eligible for international transfer mechanism. When project implementation goes beyond its host country’s climate objectives and lies outside of the scope of host countries climate action strategy towards its NDCs it is considered to be policy additional.