To advance the cause of decarbonisation, proposals have emerged to retire coal-fired power plants early by generating carbon credits from these actions as a financial incentive.

However, such carbon crediting carries notable risks, which are discussed in detail in a companion Carbon Market Watch briefing. Various initiatives are seeking to advance this concept through the development of methodologies. These include Verra’s VM0052 methodology, ‘Accelerated retirement of coal-fired power plants using a just transition’ and its associated modules VMD0060 (combined baseline and additionality) and VMD0061 (just transition requirements), which collectively represents the most advanced methodology attempting to generate carbon credits from the early retirement of coal-fired power plants.

CMW commissioned Oeko-Institut to analyse the rigour of Verra’s methodologies. In Carbon Market Watch’s view, the results of this research demonstrate weaknesses in Verra’s coal crediting methodology that could seriously undermine its ability to deliver credible, additional, and environmentally sound carbon credits.