Carbon Glossary

Carbon Credits
A carbon credit is a commercial term used to assign a value to a metric tonne of greenhouse gas emissions. When you purchase a carbon credit from a third party you are helping to fund a project that will either reduce or sequester a metric tonne of carbon emissions from the atmosphere in another location. As a result of purchasing a carbon credit from a third party you are effectively ‘offsetting’ some or all of your own carbon emissions.

CER’s > Certified Emission Reductions
(Compliance market)
A CER is a type of carbon credit that is generated under Kyoto’s Clean Development Mechanism (CDM). CER’s are generated from a CDM project and come from developing countries. CER’s can be sold to a developed country to help meet their Kyoto emission targets.

VER’s > Verified Emission Reductions
(Voluntary Market)
A VER is a type of carbon credit that can be traded within the voluntary market and is not subject to the Kyoto protocol. They can be used voluntarily by businesses and organisations to offset carbon emissions. VER’s are often registered on a formal registry and some VER’s have the potential to be recognised in the future under a regulated market.

Who buys CERs?
All developed Nations who fall under Annexe 1 category of Kyoto Protocol will buy CERs provided their local Government’s have passed the Emission Trading Legislation.

Who buys VERs?
Companies / organisations who feel an obligation towards the environment and would like to participate in reducing Carbon Emissions would buy VERs. Please note this is not for compliance purposes.

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