MONITORING CARBON CREDITS, FROM HOME KITCHENS TO A GLOBAL MARKETPLACE

Better data is driving

higher-quality carbon credits.

The measurement, reporting, and verification (MRV) process is the engine that generates value in carbon projects.

It answers such critical questions as, How much are people really using their clean cooking solution when they would otherwise be using an inefficient, polluting option? Project developers depend on MRV data to issue carbon credits and, ultimately, get paid for carrying out clean cooking projects. Purchasers of carbon credits depend on the MRV process to validate that they are getting what they paid for.

MRV approaches can be split into two categories: traditional and digital.

Traditional MRV relies on survey data from field visits, which are resource-intensive and costly. They could involve multiple trips, traveling long distances to the rural homes of families who have transitioned to clean cooking solutions. Moreover, the surveys themselves can be flawed. In some cases, surveys include just one question about stove usage, which is insufficient in determining true emissions reductions.

_{^{© Peter Irungu / Clean Cooking Alliance}}

THE TRANSITION TO DIGITAL MONITORING

The MRV landscape is beginning to evolve beyond traditional, survey-based field visits. In January 2022, Gold Standard, an organization that sets standards for emissions reductions projects and sells credits on the voluntary carbon market, finalized an important new approach for quantifying greenhouse gas reductions. Its metered and measured methodology covers cooking appliances that either directly record fuel or energy use or use a supplementary meter with the ability to record the amount of energy or fuel used for cooking over time. The metered component of the in-progress 4C methodology is based on this Gold Standard metered methodology.

Many cooking appliances and fuels lend themselves to this metered approach, including induction cookstoves, electric pressure cookers, electric hot plates, rice cookers, solar electric cookers, metered LPG systems, processed biomass pellets, and ethanol cookers. These devices can capture actual energy usage in real time. Then they send the data to the cloud or allow it to be periodically downloaded by visiting field agents.

By streamlining data collection and analysis, digital MRV yields faster reporting and fewer errors. Moreover, not every stove needs to have a sensor attached to it for the project to use digital MRV; a representative sample is sufficient. Most importantly, digital MRV provides objective data on how fuel or energy is being used to cook, which is critical to establishing the level of emissions avoided and issuing the correct amount of carbon credits.

Digital MRV, however, has limitations. For instance, it cannot solve issues relating to usage baselines (e.g., How many tons of carbon were emitted before a household transitioned to clean cooking?) or sampling strategies (How much can we extrapolate from a sample of families across an entire project?). Nor can it erase potential conflicts of interests between project developers and verifiers (i.e., both verifiers and project developers have a financial incentive to sell more credits to take advantage of this).

Another downside of digital MRV is that it can increase the overall cost of the MRV process, which may deter small project developers. To address this, either buyers must be willing to pay more for carbon credits verified by digital MRV or outside support would be needed to lower the cost.

PARTNER SPOTLIGHT: ATEC

Each of ATEC’s patented eCook electric induction stoves offers real-time usage tracking and Internet-of-Things functionality. The platform is API-integrated with verifiers, allowing for carbon credits to be verified and issued to carbon credit buyers on demand. ATEC has launched two carbon projects in Cambodia and Bangladesh, focusing on distributing and installing these eCook stoves. To enhance adoption of these stoves, the company uses a PAYGO system that allows end-users to pay for the stove in installments using mobile money, thereby improving accessibility to the eCook solution. ATEC will also introduce a “cook-to-earn” model in which carbon credit micropayments are deposited directly into household mobile money accounts based on usage levels monitored by the project’s technology in real time. Find out more here.

_{^{© ATEC}}

DIGITAL INNOVATION CHALLENGE

One way in which CCA is working to make digital MRV more accessible is by hosting Innovation Challenges to assist companies in developing reliable, low-cost, hardware and software for MRV. In 2023, CCA partnered with UNCDF to launch the Digital Innovation Challenge. Its goal was to identify, enhance, and scale up innovative solutions that can accelerate access to finance, both from commercial and carbon markets.

“The Digital Innovation platform has played a crucial role in our pre-seed round. CCA and UNCDF validated the problem we're addressing through the program, and winning the Digital Innovation Challenge further affirmed our potential. Our product has evolved significantly through the Acceleration phase of the program, and we're well-positioned to deliver our solution to project developers during the Scale-up phase, vastly improving industry efficiency.”
_{^{–Allen Fan, CEO, CarbonHQ}}

An independent jury reviewed 108 applications and selected four potentially game-changing solutions:

CarbonHQ is developing digital services to improve business processes. Its solution addresses the digital infrastructure needs of carbon project developers, including carbon credit inventory management.
Emerging Eco is developing a software-as-a-service (SAS) platform that sells carbon credits to buyers through blockchain, based on real-time validation mechanisms.
Nithio is expanding its financing platform to be used by clean cooking companies. The firm has undertaken initial assessments to integrate carbon financing.
Climate Solutions Consulting is creating new digital MRV devices and services (see box on next page).

With adequate, early-stage technical support and funding, the four Innovation Challenge winners could benefit more than 2 million households and channel an additional $100 million in carbon financing into the clean cooking ecosystem by 2026.

PARTNER SPOTLIGHT: CLIMATE SOLUTIONS CONSULTING

Climate Solutions Consulting is piloting three new approaches to digital MRV devices and services: a suite of sensors, a SAS solution, and a methodology modification.

The suite of sensors is integrated into the stove and can monitor stove usage, fuel consumption, and particulate matter pollution in the kitchen. This removes the pain point for project developers of having to install different solutions to monitor different impacts.
The SAS solution transfers monitoring data to the cloud through Bluetooth available on smartphones, and analyzes data in real time so that it is ready for verification. This removes the pain point of adopting costly, third-party systems for downloading, storing, analyzing, transferring, and verifying sensor data.

Related to this work, but undertaken separately from and prior to receiving CCA support, Climate Solutions Consulting had submitted a proposed modification to an existing sensor-based methodology to Gold Standard. If approved, it would enable almost all projects currently operating under non-metered methodologies - effectively, more than 95% of all clean cooking carbon projects - to transition to the SAS system. This could substantially reduce the cost to project developers and dramatically improve the quality of credits.