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Carbon credits basics
A unit representing one tonne of carbon dioxide equivalent (CO₂e) that has been reduced or avoided through a verified project outside a company’s own operational boundaries, typically within voluntary or regulated carbon markets.
Carbon credits are generated when someone implements active forestry measures that reduce the amount of carbon dioxide in the atmosphere compared to a reference scenario. Examples of such actions include:
- Allowing the forest to grow longer before harvesting, enabling the trees to store carbon dioxide over an extended period and potentially producing higher-quality timber.
- Planting new forests that capture carbon dioxide as they grow.
When these actions result in additional, measurable, and verified climate benefits—that is, clearly demonstrating that more carbon has been stored or emissions have been avoided compared to what would otherwise have occurred—they can serve as the basis for creating carbon credits.
Focus on forest owners
For forest owners, carbon credits provide a new source of income. Instead of earning revenue only upon harvesting timber, they can receive ongoing payments for parts of their forests included in carbon credit projects. This approach enables forests to remain standing longer, which not only increases carbon storage but also increases the share of timber available for future harvests. Most importantly, revenue from carbon credit projects gives forest owners an economic opportunity to transition to more sustainable forestry practices.
This is EKEN’s vision of a “third way for forestry”—an alternative that combines climate benefits with more sustainable and long-term profitable forest management.
For forest owners, EKEN’s reseller agreement is a central part of our offering. Through our strong international partnership with Anew Climate, EKEN has access to global buyers actively seeking certified carbon credits from Europe. This ensures that the carbon credits are sold under favorable market conditions.
The forest owner must follow the guidelines required for certification under Verra VM0045.
The compensation consists of:
- A fixed annual lease payment throughout the duration of the agreement.
- A share of future revenue from carbon credits.
Compensation levels vary depending on the forest land’s carbon storage potential, tree species, and geographic location.
If you are a forest owner and would like to learn more about how you can benefit from the growing carbon credit market, please contact us through the details provided on our website or fill out our contact form.
We use the latest technology and available data sources to remotely analyze carbon storage potential, growth rates, and future timber value of the relevant property. We utilize AI to develop a plan for identifying the most suitable areas for carbon storage projects. In consultation with the forest owner, we then propose areas appropriate for inclusion in a project. We place high value on the forest owner’s specific preferences for their property and, using large datasets, can optimize the forest from economic, ecological, and environmental perspectives.
By combining traditional revenues from pulpwood and timber with new income from carbon credits, forest owners achieve:
- A diversified income stream
- Increased forest value
- Improved long-term profitability
- At the same time, biodiversity is enhanced, and forestry becomes more sustainable.
We regularly utilize satellite imagery (e.g., Copernicus Sentinel-1 GRD) combined with AI-based analyses to monitor forest conditions, identify risks such as storm damage, and detect spruce bark beetle infestations. Through external partners, we gain access to real-time data, ensuring that any loss events are promptly reported and managed.
AI and machine learning are used to classify forests based on age, tree species, and growth conditions. This facilitates precise analysis of project areas and helps identify the most promising forests for carbon credit projects.
We combine data from forest stand registers, the Swedish National Forest Inventory, SLU (Swedish University of Agricultural Sciences), and LiDAR data from Lantmäteriet (laser scanning) to map forest areas, estimate carbon storage, and simulate project potential.
Measurements are conducted both manually, through on-site tree coring to determine tree age and biomass, and digitally using LiDAR scanning via smartphone-based solutions.
EKEN’s projects are insured against such events. A portion of the carbon credits is placed in a buffer account managed by the certification system Verra. If the forest is affected by storms or wildfires, these buffer credits are used to compensate for the carbon loss—ensuring that forest owners aren’t held financially responsible, and buyers can continue to rely on the integrity of the credits. In the event of significant forest loss, carbon credit calculations are adjusted, and compensation is provided via the buffer account.
Certification and quality assurance
EKEN’s carbon credit projects are certified according to the VM0045 methodology, developed by Verra specifically to prevent fraud and greenwashing. This means that the carbon credits are verified by independent third-party auditors and secured through a dynamic baseline that is continuously compared against updated reference data from the National Forest Inventory. Verra’s system and credits meet the requirements of ISO 14001 and ISO 14064.
A dynamic baseline is a method for continuously comparing and updating reference values for carbon storage within a forest area. Instead of relying on a fixed historical reference, the baseline is regularly adjusted using current data from national forest inventories.
In carbon credit projects, this means comparing carbon storage in the forest included in the project with updated reference areas in similar forests outside the project. This approach ensures that the emission reductions generated are real, measurable, and additional—preventing the project from earning credits for natural changes that would have occurred anyway.
Verification of carbon storage typically occurs at intervals of 3–8 years, while monitoring is conducted continuously using advanced remote sensing technology. This ensures that projects consistently meet the high standards required by Verra VM0045.
Verra is a global non-profit organization that develops and manages standards for climate action and sustainable development. Verra also operates an electronic registry where certified carbon credits are registered, tracked, and ultimately retired once used. This prevents double-counting and ensures that each credit is only used once. The registry enables businesses and organizations to verify and track their carbon offsets transparently and securely.
To ensure that a carbon credit is used only once and avoid double counting, EKEN and its partners adhere to strict international protocols:
Registration in international systems – All EKEN carbon credits are registered in Verra’s electronic registry, where each credit receives a unique identification number. When a carbon credit is used (“retired”) to offset emissions, it’s marked as consumed in the registry and cannot be resold.
Third-party verification – Independent certification bodies review and verify the projects, ensuring the credits represent real and permanent carbon storage.
Transparency and traceability – Companies purchasing carbon credits can obtain verifiable reports and registry records, confirming that credits are unique and cannot be claimed by anyone else.
These safeguards ensure EKEN’s carbon credits meet the highest international standards, providing companies with a secure and credible solution to achieve their climate goals.
Earlier carbon credits were often criticized for lacking transparency, greenwashing, and occasionally even fraud, as not all credits represented actual and additional carbon storage. EKEN’s carbon credits stand apart because they are certified under the stringent international Verra VM0045 standard. This means we employ a dynamic baseline, continuously updated with current forest data, to ensure that the additional carbon storage is measurable and genuine. Furthermore, the projects are verified by independent third-party auditors. Advanced technologies like AI, satellite data, and LiDAR are used to measure and monitor forest performance. The result is a robust and reliable product that truly contributes to climate benefits.
Focus on businesses
Companies with ambitious climate strategies purchase carbon credits to offset the emissions they cannot eliminate through their own reduction measures. By investing in certified carbon credits from EKEN, companies can:
- Ensure that climate actions meet high-quality standards and are verified according to international norms
- Integrate carbon credits into a strategy that supports both emissions reductions and long-term climate benefits
- Enhance transparency and compliance in their sustainability reporting under CSRD and the EU Taxonomy
Prepayment of carbon credits – Companies can invest in carbon credits in advance to secure access to verified credits at a predictable price. A smaller amount is paid when the carbon credit project is initiated.
- Payment on delivery – Payment is made upon issuance of verified carbon credits, after the projects have been validated and verified.
- Long-term contracts – EKEN offers companies the option to enter into multi-year agreements, with carbon credits delivered progressively as they are verified and registered.
Legislation
CSRD (Corporate Sustainability Reporting Directive) is EU legislation that tightens requirements for corporate sustainability reporting. The directive mandates that companies disclose their climate-related activities, climate risks, and the measures they are taking to reduce emissions. As of 2024, CSRD will apply to thousands of European companies, requiring them to report according to the EU’s sustainability reporting standards (ESRS). This means that companies must demonstrate how their operations contribute to net-zero targets, including climate compensation and investments in carbon credits.
The carbon credit market
The demand in Europe far exceeds the current supply of carbon credits, creating a unique business opportunity for forest owners. European companies account for approximately 40% of global demand, while only about 1% of total production occurs in Europe—an imbalance that offers significant revenue potential.
Anew Climate is North America’s largest player in trading carbon credits and environmental certificates. The company develops and markets high-quality climate solutions and has sold over 200 million carbon credits. With decades of experience, Anew Climate has a global presence, with offices in the U.S., Canada, and Europe. The company has received numerous awards for its work in climate finance and is renowned for ensuring that carbon credits are high quality and meet strict international standards.
Anew Climate works with companies and organizations aiming to reduce their climate impact through verified and transparent climate actions. In the forestry sector, Anew Climate plays a key role through partnerships like Aurora Sustainable Lands, where they invest in forest properties to maximize carbon storage and develop long-term climate projects.