Voluntary Carbon Mitigation

EECA believes there are cost-effective opportunities for companies to go beyond regulatory requirements to reduce energy-related carbon emissions.

Publication date: December 2021

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About voluntary mitigation

Voluntary mitigation means reducing emissions and increasing removal of greenhouse gases beyond regulatory obligations such as the New Zealand Emissions Trading Scheme.

Voluntary mitigation can happen within a company and its supply chain — and also externally, using the voluntary carbon market (VCM) or other mechanisms.

Organisations can also support voluntary mitigation by partnering in mitigation projects, providing other forms of support and marketing low-emission goods and services.

Voluntary carbon credits provide financing to projects set up to avoid or remove carbon when these projects would otherwise not be financially viable. Voluntary markets also enable redistribution of financing from developed to developing economies.

Image on right features an Electrode boiler - courtesy of Open Country Dairy Awarua.

Benefits of voluntary mitigation

For companies and organisations, voluntary mitigation helps to:

  • demonstrate environmental and social responsibility and leadership
  • retain social licence to operate
  • manage exposure to climate-related risk
  • increase market advantage.

 For New Zealand as a country, voluntary mitigation helps to:

  • boost innovation and investment
  • redistribute mitigation costs to support a just transition
  • shift social norms.

Voluntary mitigation can speed up investment, innovation and action to reduce greenhouse gases emissions domestically. Those actions can support an equitable transition to a low-emission economy, generate valuable co-benefits and help the New Zealand Government find local ways to meet its Paris Agreement target (referred to as a Nationally Determined Contribution, NDC) and so reduce reliance on offshore mitigation.

The issue

Many New Zealand companies want to go beyond government requirements to help tackle climate change. However, past approaches to voluntary offsetting and carbon-neutral claims are not compatible with the Paris Agreement.

EECA’s view

Worldwide, a conversation is happening about what the voluntary carbon market could look like, how to address previous shortcomings, and how to scale it up to a hundred times its current size.

We believe there is no reason why New Zealand can’t lead the way, as it already has on many occasions.

A well-designed Voluntary Carbon Market could be an important part of New Zealand’s decarbonisation journey, and EECA strongly supports continued development of this idea.

Andrew Caseley

Chief Executive, EECA

Through our work across sectors and with some of the largest energy users in New Zealand, EECA knows the tools and technologies already exist to develop a voluntary carbon market, and there are untapped cost-effective domestic opportunities, especially in clean and clever energy use.

As our economy continues to recover from the pandemic, a voluntary carbon market could help to fund projects in New Zealand to accelerate the energy transition, rather than buying offshore credits.

A domestic voluntary carbon market would also improve trust by bringing the outcomes of the spending closer to New Zealanders, as trust is key in the success of any voluntary action.

Introducing Motu’s work

Acutely aware of the problems and the opportunities of the voluntary carbon market, EECA commissioned Motu to kick-start collective thinking about practical solutions for the country.

Motu’s Voluntary Mitigation Dialogue in 2020 brought together a group of cross-sector experts and stakeholders to draft a proposal for a thriving VCM, which could scale up, and be a key part of a fair energy transition in New Zealand.

Voluntary Mitigation NZ | Motu website(external link)

Introducing Point Advisory's work

As a next step, EECA commissioned Point Advisory to look for existing international carbon markets frameworks to provide insights on a domestic scheme, allowing businesses and organisations to get recognition for their contribution to New Zealand transition, while ensuring strong environmental integrity.

Point Advisory also assessed a sample of energy-related mitigation projects that were co- funded by EECA.

This work demonstrates that such projects could be conducted domestically within a voluntary carbon market and help deliver tangible greenhouse gas emissions reductions beyond what would happen without this funding.

Read the full report

A Point Advisory report, commissioned by EECA, that investigates the potential for emissions reducing energy projects to be funded by voluntary carbon mitigation contributions.

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