VCC and PGCC
VCC or PGCC: what’s best for you?
Once applicants' forests are verified under the PFS Standard methodology, proving tonnes of forestry CO2 removal, net of project GHG emissions, are or will be captured and proven stored until at least 2100, they may be eligible for VCCs and/or PGCCs.
Voluntary Carbon Credits (VCCs) refers to carbon credits that are not credited to a registry by a government and includes PFS stored CO2 carbon credits.
Proven Green Claim Certificates (PGCC) are certificates that are issued by PFS to support GHG claims.
If a forest qualifies under Part II of the PFS Standard they will be eligible for VCCs. Forests may qualify for a positive risk assessment for a GHG Statement, and thereafter a PGCC, if they meet the requirements of Part III. It may not be necessary to also meet the requirements of Part II to obtain a PGCC, but if a VCC is held it will be easier to do so. However VCCs and PGCCs cannot be double counted.
PFS will verify qualifying forests for VCCs, calculated on an ex post basis, usually for project reporting periods (PRP) of three years. Baseline removals will be measured at the beginning of the PRP (baseline) and at its conclusion, after deducting project GHG emissions. VCCs will not be issued until a PRP ends. However, foresters may be able to negotiate up-front payment for three year delayed delivery.
Like VCCs, PGCCs are verified to the validated PFS Standard methodology for proof of longevity, but unlike VCCs, they are not validated to ISO standards as regards their calculation. PGCCs calculate stored CO2 on an ex ante basis. Expected ETS credits and VCCs (in some cases both can be claimed) cannot be counted towards tonnes CO2 proven storage verified for PGCC.
PGCC may be able to be held together with ETS credits and VCCs, providing there is no double counting. They can also be held on their own, which might be the case where VCCs cannot be issued.
The following chart illustrates what NZ forests, that qualify for capturing and storing CO2 removals until at least 2100, may be eligible for:
Planted after 2007, receiving NZUs:
Not eligible for VCCs but eligible for PGCCs.
Planted before 2008, receiving NZUs:
Eligible for NZUs, VCCs and PGCCs.
Not receiving NZUs:
Eligible for VCCs and PGCCs.
Both PFS' VCCs and PGCC, support GHG statements. Emitters need to ensure their GHG Statements are not deceptive or misleading, whether made for marketing, financial disclosures or to interested stakeholders, such as banks and insurers. Making a GHG statement given a positive risk assessment by PFS, such as “we have, and will, sequester 1 million tonnes CO2 which has been verified, compliant with ISO (etc), as stored until 2100” gives a high level of assurance against greenwashing and regulatory claims and other claims such as negligence. It minimises reputational risks. Variations on that GHG Statement may be “such removals remediate past and present GHG emissions that the emitter accepts responsibility for and is working to abate”. There is no need to refer to offsetting.
Both VCCs and PGCCs may meet regulatory requirements, other than those specifically applying to GHG Statements, but this is more likely with VCCs. That will need to be assessed by emitters on a country by country basis.
PGCCs are not VCCs and are not transferrable as such. The causal nexus between the ability to rely on proven storage to support a third party GHG statement depends on proving the emitter’s expected intervention was responsible for the decision to covenant against felling. VCCs are fully transferrable on recognised platforms once verified.
The table below outlines key attributes of PFS VCCs and PGCCs.
| VCCs (recognised voluntary carbon credits) | PGCC (proven green claim certificate) not carbon credit because not readily saleable and not verified as such | |
|---|---|---|
| Verification | Longevity of CO2 capture & storage under PFS Standard validated by SGS to ISO 14064-1; 14064-2; ISO 14064-3 and IC-VCM, core carbon principles | Longevity of CO2 capture & storage under PFS Standard validated by SGS to ISO 14064-1; 14064-2; ISO 14064-3 and IC-VCM, core carbon principles |
| Calculation basis | Ex post calculation in accordance with above standards | Ex ante calculation only in accordance with PFS Standard |
| Transferable | Totally transferable | Nexus between forester and emitter but may not exist for further transfer |
| 3rd Party verification | Will be 3rd party verified by leading VVB against PFS Standard | Will be 3rd party verified by leading VVB against PFS Standard |
| Evidence | Supports GHG Statements, express or implied, about longevity of CO2 capture and storage | Supports GHG Statements, express or implied, about longevity of CO2 capture and storage |
| No Green washing | Prevents successful greenwashing and consumer law type claims | Prevents successful greenwashing and consumer law type claims |
| If used for regulatory compliance, cannot be doubled counted and must be retired 3 years after issue. It doesn’t need to be retired, or until it is, can make as many GHG statements as want because not misleading and deceptive if rely on PFS Standard | Doesn’t need to be surrendered/retired. Can make as many GHG statements as want to because if verified under PFS Standard neither misleading nor deceptive | |
| Reporting | Likely to satisfy financial reporting standards; banker, insurance, audit, activist directors/shareholders etc in relation to managing climate risk etc | Likely to satisfy financial reporting standards; banker, insurance, audit, activist directors/shareholders etc in relation to managing climate risk etc |
| No offsetting | Doesn’t rely on offsetting | Doesn’t rely on offsetting |
| Regulatory adherence | May meet additional regulatory requirements in addition to those above | |
| Future use risk mitigation | No risk that they can't be used in the future so investment is safe | No risk that they can't be used in the future so investment is safe |