FREQUENTLY ASKED QUESTIONS

Climate Neutral Commodity was established to respond to the demand for credibility and an independent guarantee with certification based on recognised environmental standards. This requires a clear separation of roles in the measurement, verification and certification steps.

Climate Neutral Commodity certification is based on recognised standards for GHG lifecycle inventory (PAS2050, PAS 2060, ISO14064, GHG Protocol), verification by an independent third-party (ISO 14025, ISO 14064), and Offset high Criteria (TSCVM Core Carbon Principles).

CNC certification provides a third-party assessment that BOTH GHG calculation and voluntary carbon credit offsets for a defined commodity transaction have been conducted according to good practice as defined in our publicly available protocol. The CNC certification protocol has been developed through wide consultation (including public consultation) with relevant experts.

There are other certifications for either GHG calculation OR offset quality and others that are not commodity transaction specific or which are not based on publicly available criteria.

We believe it is important that certification is based on publicly available criteria, that evolve with perceived best practice as defined in PAS 2050 –2060 and ISO standards

There is a growing demand for decarbonized commodity supply chains, from companies wishing to achieve and claim net zero emissions targets.

Climate Neutral Commodity certification provides a third-party assessment that good practice has been applied to GHG calculation and in voluntary carbon offsets based on a robust publicly available protocol.

CNC certification enables companies to access sustainable funding with better financing terms, win business via successful differentiation on climate terms and claim for credible carbon-neutral transactions to avoid criticism and backlash from public and stakeholders.

Sustainable finance refers to financing arrangements based on environmental criteria. Climate Neutral Commodity certification is a solution for financiers for carbon neutral transactions that are measured and assessed by an independent third-party.

We are working with a number of institutions who are considering CNC certification as part of their criteria for sustainable financing.

Climate Neutral Commodity is a fully independent company owned by the co-founders and is private investor funded. Independence is a Climate Neutral Commodity core principle.

Climate Neutral Commodity teams supports companies in their journey to carbon neutrality by offering project management services, documentation on governance processes, third-party assurance coordination and development of offset strategies.

Any advisory services provided by CN Commodity will be rigorously managed to ensure there is no real or perceived conflict of interest of a CNC certificate.   

It is important to remember that a third-party independent assessment (by leading certification/audit company) is required as part of the Climate Neutral Commodity certification process

The certification cost is a function of the commodity itself, transaction size, and the number of transactions to certify.

In most instances, the main cost to be considered by the company is the offset itself via the acquisition of eligible high criteria carbon reduction certificates.

CNC would be pleased to discuss pricing with you based on your specific circumstances.

CNC certification can be acquired by any stakeholder for a transaction.  We are working with producers, traders, end use consumers and finance companies who want to demonstrate good practice in climate neutrality with a third party verified process to measure and offset GHG emissions.

‘Greenwashing’ is defined as marketing spin to deceptively persuade the public and consumers of environmental credentials.

CNC certification aims to provide quality, integrity and transparency to the claims of climate neutrality.  We believe that accurate calculation of GHG emissions is the key foundation.  Voluntary carbon offsets need to be based on an accurate understanding of what GHG emissions are from a transaction before it can be considered carbon neutral.  Using poor quality offsets could result in environmental damage.

CNC certification provides a third-party assessment that GHG calculations have been conducted comprehensively and thoroughly applying sound scientific principles AND that voluntary carbon offsets used are of a high quality and are widely perceived as being net beneficial to the global environment.

We are not a MRV (Measure, Report Verify) service provider, and we do not sell offset certificates.

ISO14064: specification for GHG emissions and removals provides the following definitions:

Verification: process for evaluating a statement of historical data and information to determine if the statement is materially correct and conforms to criteria.

Validation: process for evaluating the reasonableness of the assumptions, limitations and methods that support a statement

Verifier/Validator: competent and impartial person verifying and/or validating

The CNC certification process involves both verification and validation of GHG calculations/measurements for specific commodity transactions.  Climate Neutral Commodity certification process requires an independent third-party assurance to ensure that the information used is materially correct and that reasonable assumptions, limitations and methods have been used in the GHG footprint calculation.

Climate Neutral Commodity provides a transparent Certification protocol, based on recognised standards (GHG Protocol, PAS 2060, PAS2050, ISO14025, ISO14064) to define GHG emissions and boundaries to be considered.

To achieve the certification emissions of the seven main greenhouse gases as covered by the UNFCCC have to be calculated: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); sulphur hexafluoride (SF6), nitrogen trifluoride (NF3).

Climate Neutral Commodity certification covers the cradle-to-gate part of the commodity lifecycle. Direct emissions (scope 1) and emissions related to energy use (scope 2) have to be duly calculated, verified and offset for each step and operations from production (including Land Use Change) to delivery to the client.

Example: LNG transaction: all the seven GHG emissions related to operations for: Gas extraction and treatment, transport by pipe, liquefaction operations and storage, shipping to the delivery import terminal.

Yes, but with a few exclusions.  Climate Neutral Commodity certification is not available to commodities that are not considered to be in line with the energy transition and contemporary thinking on meeting climate impact goals.  As a result, CNC certificates are not available for thermal coal transactions.  Other exclusions may be considered for commodities or transactions considered as in contradiction with the value and environmental objectives of Climate Neutral Commodity.

The voluntary carbon market is an over-the-counter non-standardized market where private investors, organizations and companies can voluntarily purchase carbon reduction certificates to mitigate their own GHG emissions footprint.

There are various standards in the voluntary carbon market with different criteria and requirements to issue certificates. The use of voluntary carbon offsets is considered to be an effective means to tackle climate change, reduce global GHG reduction and drive flows of finance to communities and projects with other environmental benefits.

The Paris Agreement Article 6 expressed a need for a standardisation and organisation of the voluntary market on a transparent and robust basis. The Taskforce for Scaling Voluntary Carbon Market (TSCVM) also aimed at addressing this part of the global solution to climate change.

Climate Neutral Commodity offset requirements are aligned with good practice criteria for high quality carbon offset certificates as currently held by the leading think tanks and organisations in this area.

While there is some variance in standards there is general consensus on criteria to define high quality carbon reduction certificates. They require those certificates to be issued for projects that:

  1. Are additional
  2. Are permanent
  3. Are based on a realistic and credible baseline
  4. Are quantified, monitored, reported, and verified
  5. Have a clear and transparent chain of custody
  6. Avoid GHG emissions displacement
  7. Are only counted once towards a mitigation obligation
  8. Do no net harm

For example, and further reading please refer to the Core Carbon Principles (CCPs) as listed by the TSCVM.

Climate Neutral Commodity recognises as eligible a short list of standards with additional exclusion and restriction to guarantee alignment with these CCPs.  These are listed in the CNC certification protocol.

Climate Neutral Commodity does not certify transactions based on all Environmental, Social and Governance issues related to a commodity life-cycle. It responds to the demand for carbon neutral commodity supply chains by measuring and offsetting GHG emissions and associated Land Use Change impacts. Climate Neutral Commodity certificates will be issued for transactions and companies that meet general ESG criteria and who are committed to an overall climate impact reduction plan aligned with Climate Neutral Commodity values.

Climate Neutral Commodity is a certification for commodity transaction from production to delivery, i.e. “cradle-to-gate” as defined in PAS2050 – specification for the assessment of the life cycle GHG emissions of goods and services.

As such it guarantees emissions related to a commodity buyer’s upstream scope 3 (indirect emissions for commodity upstream but not end-use) are accurately measured, verified and offset. In most instances, scope 3 emissions are the most difficult to assess as analysis and collection of data tends to involve operations from external parties.

 A future development planned for Climate Neutral Commodity is a Full Lifecycle certificate, including commodity end-use GHG emissions to respond to the demand for cradle-to-grave certification.

CN Commodity has established a network of third-party assessors who can provide global coverage and who bring specific commodity sector expertise. We will use third party assessors that do not have conflicts with the client organisation or transaction. For example, if a company has been involved in developing the GHG calculation/measurements for a specific client CNC will use another competent independent company to provide the third-party assessment

Leading scientists have stated that to limit global warming to 1.5DegC, the world must halve existing GHG emissions by 2030 and achieve net zero by 2050.  Absolute emission reductions should be the primary way of achieving this.  As this transition happens, however, it is recognised that current emissions that have not yet been abated should be decarbonised using quality carbon offsets.  CNC supports this by providing a transparent, publicly available certification of carbon neutrality for specific defined commodity transactions. As perceived suitability of offsets is defined CNC will adjust accordingly, eg if removal offsets are decided to be beneficial rather than reduction offsets

We recognised that methodologies to measure and report GHG emissions, and offset standards will change and evolve. For example, the Oxford Principles for Net Zero Aligned Carbon offsetting is leading the charge to move acceptability of carbon offsets from carbon emission reduction-based offsets to Carbon Removal based offsets. 

The Climate Neutral Commodity certification protocol will be reviewed annually to take in account evolution of standards and methodologies to drive good practice and maintain a high level of credibility and underlying quality of its certificate.

To that end, Climate Neutral Commodity will continue to collaborate with a wide spectrum of experts in GHG measurement, carbon neutrality, offsets and certification procedures.

Climate Neutral Commodity certification requires a company to calculate and justify the calculation of the GHG footprint. These justifications must be accurate and based on recognised methodology and standards. A third-party independent assurance provider verifies the calculation as following good practice for the processes in question and the materiality of those justifications.

In the meantime, CNC collaborates with a vast array of companies, institutions and individuals working on GHG calculation and measurement and carbon offset programs to establish its certification protocol. Some of the key relationships are represented on our Advisory Board.

We will assess the current perception of good practice in GHG calculation for specific industries through consultation with relevant industry experts eg data provenance and emission factors and for quality offsets as these are defined by the regional and global bodies developing these standards.

CNC aims to provide certificates over the quality of GHG calculations and associated voluntary carbon offsets for specific commodity transactions.

In many instances we will work with clients on their governance processes associated with these certifications, eg development of:

  • reporting templates,
  • policies and procedures for their teams to follow for GHG accounting
  • automation solutions
  • offsetting strategies relevant to their corporate narrative

Climate Neutral Commodity does not certify transactions based on all Environmental, Social and Governance issues related to a commodity life-cycle. It responds to the demand for carbon neutral commodity supply chains by measuring and offsetting GHG emissions and associated Land Use Change impacts. Climate Neutral Commodity certificates will be issued for transactions and companies that meet general ESG criteria and who are committed to an overall climate impact reduction plan aligned with Climate Neutral Commodity values.

We are committed to equal opportunities and are supportive of the LQBTQ+ community.  As we grow, we will apply selection criteria for staff recruitment and suppliers to ensure that we are representative of the diversity of the commodity industry community and that we are fair and equitable.

Carbon insetting is a notion referring to carbon reduction within the sphere of influence of a company.

For example, for a commodity trader a carbon insetting project is a project that enables reduction of GHG emissions within the lifecycle of the commodity the company trades.

Some insetting projects have carbon reduction certificates issued by recognised standards in the same manner and condition as certificates related to offset projects.  Those carbon reduction certificates can be used for Climate Neutral Commodity certification as long as they are issued by the eligible standards and meet condition of vintage year and permanent retirement as required in the Climate Neutral Commodity certification protocol.

Carbon credits are generated via certified projects that aim to reduce or avoid greenhouse gas emissions.

To generate carbon credits, the projects must follow criteria and be certified by third party agencies such as Verra or Gold Standard. The number and value of the carbon credits differ from one project to another and are registered into a public registry.

These credits can then be bought by companies or individuals to offset their own carbon emissions.

The offset take place at the moment are carbon credits is retired from the registry, in order to avoid any double counting.

Scope 1 emissions: Emissions from operations that are owned or controlled by the reporting company.

Scope 2 emissions: Indirect emissions from the generation of purchased or acquired electricity, steam, heat or cooling consumed by the reporting company.

Scope 3 emissions: All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company or organisation, including both upstream and downstream emissions.

However, it is important to understand that the scopes are seen from an entity point of view:

i.e. For a coffee transaction from a producer to a buyer (CIF).

For the Producer, the scope 1 and 2 will include the production to the delivery of the goods. Whereas for the buyer, the production to the delivery will be part of its scope 3.

Climate Neutral commodity certification is for cradle to gate for specific transactions (as defined by PAS2050) rather than scope 1, 2 or 3 emissions for an organisation.