FREQUENTLY ASKED QUESTIONS

 

Carbon Credits Definitions

 

 

1. What is a Carbon Credit? A carbon credit is a financial unit representing the removal from the atmosphere or the reduction of one ton of carbon dioxide (CO2) or equivalent greenhouse gases (GHGs). GHGs are emitted into the atmosphere through human activities, which include the burning of fossil fuels in industries, transportation, energy generation, deforestation, among others.

 

2. What is the Value of a Carbon Credit? The value of a carbon credit can vary depending on its integrity and benefits to the communities of influence, the environment, and safeguards to ensure the occurrence of disasters or adverse factors in areas (lands) under intervention by a carbon credit generation project. As activities and regulation are recent in Brazil, there is an initial expectation for the credits of the Triple C Standard to be initially traded between R$ 50.00 and R$ 60.00. However, these values are only a reference and may vary.

 

3. What are Regulated and Voluntary Markets? Regulated and voluntary markets are two different approaches to the trading and use of carbon credits:

 

Regulated Market: The regulated carbon market refers to a system established by governments or governmental authorities implementing policies and regulations to limit greenhouse gas emissions. In this system, companies and organizations are legally required to meet specific emission reduction targets. If they exceed their emission limits, they need to acquire carbon credits to offset excess emissions and avoid penalties.

 

Voluntary Market: The voluntary carbon market is a system where companies, organizations, or individuals can choose to participate voluntarily, seeking to reduce their carbon emissions beyond regulatory obligations or to offset emissions that cannot be avoided. In this case, the purchase and sale of carbon credits are not imposed by government regulations but are motivated by corporate or individual social responsibility initiatives.

 

Both markets, voluntary and regulated, aim to achieve a net reduction of greenhouse gases to help mitigate climate change. The main difference is that the regulated market is mandatory and managed by governments, while the voluntary market is an optional initiative, driven primarily by sustainability and environmental responsibility interests of its players.

 

4. Will the Brazilian Government and Federal Legislative Initiatives to Create a Regulated Carbon Market Regulate or Harm Projects or Credits Generated in the Voluntary Market, such as those certified by LuxCS? Although LuxCS operates in the voluntary carbon credit market, governmental actions in the regulated carbon market can have impacts. This occurs because the regulated and voluntary carbon markets are interconnected in various ways, and government decisions can influence both the demand and supply of voluntary carbon credits, shaping decisions on projects, voluntary offsets, and investments.

 

5. What are Carbon Credits for Removal or Reduction? Removal or reduction carbon credits are units that offset greenhouse gas emissions. Removal credits are generated by projects that remove CO2 from the atmosphere through nature-based solutions such as native forests, reforestation, agriculture, and fruit cultivation. Reduction credits are generated in projects that decrease emissions, like renewable energy and energy efficiency. These credits are certified to ensure their reductions are real, measurable, additional, verifiable, and permanent. Carbon credits can be purchased in regulated or voluntary markets to help individuals, companies, and countries offset their emissions or meet carbon reduction targets.

 

6. Are Removal Carbon Credits Better than Emission Reduction Credits? It is imperative that all types of carbon credits are valued and promoted. Both removal and reduction credits have their merits and play an equally important role in combating climate change. Removal credits, especially those from nature-based solutions, seem to be preferred by corporate buyers due to their purposes and many additional benefits.

 

7. Who Buys Carbon Credits in Brazil? In the voluntary carbon credit market, a variety of participants can buy carbon credits to offset their emissions or support sustainability initiatives. This includes, among others: companies, individuals, families, events, travels, financial institutions, and governments.

 

8. Where Can I Buy Carbon Credits? You can buy carbon credits through any carbon credit provider (also known as a service provider) or directly from the developer of carbon offset projects. Carbon credit providers are companies that create portfolios of carbon offset projects and provide resources such as carbon emission calculators. Currently, Lux Carbon Standard acts as a certifier and does not yet have a marketplace for the purchase and sale of credits.

 

About Lux Carbon Standard:

 

9. What Does Lux Carbon Standard Do? Lux Carbon Standard (LuxCS) is a Brazilian carbon certification company operating in the voluntary carbon credit market. It offers its guidelines to certify greenhouse gas emission reductions, covering validation, verification, and certification. Its projects are audited by third parties to ensure integrity and transparency, contributing to a sustainable future.

 

10. Who is the Target Audience of Lux Carbon Standard? The target audience of Lux Carbon Standard (LuxCS) is quite diverse and includes:

 

a. Landowners: Individuals or legal entities owning land areas that can be used for projects to remove or reduce greenhouse gas emissions.

 

b. Companies: Organizations seeking to offset their carbon emissions by decarbonizing their production chains.

 

c. Investors: Individuals or institutions interested in investing in environmentally sustainable projects offering financial return, as well as social and environmental benefits.

 

d. Governments and Non-Governmental Organizations: Entities seeking to promote sustainability and mitigate climate change.

 

11. What Services Does Lux Carbon Standard Offer?

 

a) Generation of Carbon Credits: LuxCS has developed the Triple C Protocol (Credits for Carbon Compensation), which certifies credits generated by emission reduction or greenhouse gas removal.

 

b) UnCarbonize Program: certifies greenhouse gas emission inventories and issues certificates for partial or total emission reduction or the decarbonization of entire production chains.

 

Triple C Protocol Standard

 

12. What is the Triple C Protocol Standard? This standard for generating carbon credits in the voluntary market is a set of guidelines for measuring and certifying the removal or reduction of greenhouse gas emissions. It defines the criteria for eligibility, validation, and verification of certification processes. The Protocol establishes a reference scenario, ensuring that projects have a real impact. Operating in the voluntary market, the Triple C Protocol Standard is underpinned by principles that guided its construction and aim to ensure environmental integrity and the effectiveness of the certified credits: accuracy, credibility, legitimacy, simplicity, and transparency.

 

13. How long does a process for generating carbon credits under the Triple C Protocol Standard typically take? In our international counterparts, a certification process can take up to 24 months. At LuxCS, with the use of modern technologies and process automation, this time is estimated, on average, at 6 months. However, some areas may face difficulties during project implementation, and this is an estimate.

 

14. Are the credits generated by the Triple C Protocol Standard intended only for the Brazilian domestic market? Initially, the registered credits can be traded in the Brazilian voluntary market. Certifier LuxCS is seeking endorsement of the Triple C Protocol Standard by a European international accreditor, thus enabling the credits generated to be accepted globally.

 

15. How long is an area under the monitoring of a project? Under the Triple C Protocol Standard, an area under a credit generation project is monitored for up to 10 years. This period is renewable, depending on local conditions, for up to two equivalent periods. During the monitoring, area owners or managers can request a new credit generation verification every 12 months, within the periods the project is being monitored.

 

Properties with Potential for Carbon Credit Generation

 

16. How does the process to generate carbon credits begin? Initially, the interested party should register on the Platform (https://www.luxcs.org) and request a Technical Feasibility Analysis. This analysis involves a review of three aspects: Legal, Technical, and Economic. Furthermore, the most appropriate methodology for the project is suggested. The Technical Feasibility Analysis is performed solely by professionals registered with LuxCS and subjected to a proficiency examination on the certification process.

 

17. How do I know if my property has the potential to generate carbon credits? In principle, areas of different sizes, both small and large, can generate credits. At LuxCS, within the Triple C Protocol Standard, areas of at least 4 to 5 hectares (40,000 m2 to 50,000 m2) are sought. As carbon credit certification projects are based on nature-based solutions, there is no direct correlation between the size of an area and the generation of credits. Regardless of the size of the area, a Technical Feasibility Analysis can be carried out by registering it on the Electronic Platform.

 

18. How can I estimate the carbon credit certification potential of my property before committing to the process? To assist owners in understanding the carbon credit certification potential of their properties, we offer an Estimated Preliminary Analysis. This analysis uses Swiss satellite technology to conservatively estimate the carbon stock on your property. This estimate includes the amount of carbon present in trees, roots, and soil. To conduct this analysis, we need the following information:

• Full name of the owner, responsible party, or company.

• CPF or CNPJ.

• Full address with postal code.

• Contact details for sending the quote (Name, email, or WhatsApp).

• Digitized copy of the Municipal Registry (IPTU) or the Rural Property Registration Certificate (CCIR) and CAR Receipt, depending on the location of the property.
   

19. What is the process and cost involved in the Estimated Preliminary Analysis for carbon credit certification? After providing the necessary information (name, CPF/CNPJ, address, contact details, and property documentation), we will send a quote for the Estimated Preliminary Analysis. The initial investment for this analysis ranges from R$ 500.00 to R$ 3,000.00, to be paid by bank slip issued after service confirmation. This analysis is conducted by an experienced forestry engineer from the LuxCS technical team and is delivered within 5 business days after accepting the quote. Based on the results of the analysis, the owner can decide whether to proceed with the carbon credit certification process or not.

 

20. Does it matter in which Brazilian or foreign biome an area is located for a project to generate carbon credits? Essentially, the geographical location in Brazil or abroad or the biome of the project is not relevant within the parameters of the Triple C Protocol Standard. LuxCS's focus is on expanding the conservation of areas and providing a more sustainable world for future generations.

 

21. Are carbon generation projects within the Triple C Protocol Standard, similar to international certifiers, only possible in the Amazon and Brazilian Cerrado regions? The Triple C Protocol Standard of LuxCS, which aims to conserve areas, was conceived for the development of carbon credit generation projects in all Brazilian biomes, namely: Amazon, Caatinga, Cerrado, Atlantic Forest, Pampa, and Pantanal.

 

22. Can an area owned by an organization or company (legal entity) be the subject of a project to generate carbon credits? Yes, areas belonging to legal entities (companies) follow the same steps as those of individuals. In this case, the person with the power, as manifested in their contract or social statute, to sign for the company or its legal representative will be responsible for registering the area on the Electronic Platform and giving authorizations for proceedings within the various stages of the certification process, under the Triple C Protocol Standard.

 

23. I have more than one contiguous or non-contiguous property; can I include them in a single project to generate carbon credits? The so-called consortium projects are those where more than one area is included in the same project. These areas can be contiguous or not and belong to different owners. In these cases, soil sampling and a forest inventory are required for each of the areas. However, the consortium owners must decide among themselves who will be responsible for the consortium with the Electronic Platform.

 

24. Can a relative, friend, or partner be responsible for my property during the certification process? With the use of a model power of attorney, the owner(s) can appoint any person as their representative during the certification process.

 

25. Can an area under inventory be the subject of a project to generate carbon credits? Generally, yes. In the Technical Feasibility Analysis, the eligibility of these areas is verified, as it must be guaranteed who will have the right to own credits to be registered.

 

26. Should it be recorded or noted in the property's registry that it is under a carbon credit generation process? Yes, once the carbon credit generation project is completed and its Verification by Third-Party Audit is carried out, the owner or their legal representative must present to the Certifier the Property Registration with the mention that it is under a carbon credit certification project, with the date of receipt of the Verification, the start date, and the end date of the first project cycle.

 

27. What should I do if I wish to sell or transfer a property that is under a carbon credit generation project? The owner needs to inform the new owner of their password and login on the Electronic Platform when formalizing the sale and request that they make the request for the change of responsibility on the Platform, based on the new property denomination expressed in the property's registration.

 

28. What happens in the case of the death of the owner of a property that is under a carbon credit generation project? The estate executor must communicate the fact to the Certifier, and the legal department of the latter will take the appropriate steps regarding the ownership of credits to be generated in the future and the responsible party for requesting new Verifications for the generation of credits in the area.

 

29. Is there an appreciation of an area that is under a carbon credit generation project? From a real estate valuation perspective, potentially yes. When a carbon credit generation project is carried out, the market value of it can be added, plus the remaining time for the realization of Verification(s). That is, in addition to the market value of the area, the potential value of the financial asset, additional carbon credits, is added.

 

30. Are private lands that have been declared 'public utility' by the State, but have not yet been expropriated or compensated, eligible for carbon credit projects? An area is only eligible for carbon credit certification if there is a clear and certain real right over it. Precarious possession precludes certification. A written agreement between the qualified parties is required, with the certainty that the property's destination is certain.

 

Technical Feasibility Analysis

 

31. Can a Technical Feasibility Analysis of an area/land be conducted before the delivery of any documents? Yes, the Technical Feasibility Analysis is the first step in the certification process. Besides the potential for generating credits and the economic feasibility of doing so, according to current expectations of the carbon credit market, this Analysis will inform the property documents to be gathered. Thus, the person responsible for an area can decide whether to proceed with the certification process or carry it out at a more appropriate time.

 

32. What is involved, and who is responsible for the Technical Feasibility Analysis? In the Technical Feasibility Analysis of an area (land), legal, technical, and economic aspects of the property are analyzed. These analyses are conducted by a professional accredited by LuxCS (forestry engineer, environmental engineer, agronomist, or biologist). Accreditation is granted through a Proficiency Exam, which raises the quality levels of projects processed within the steps of the Triple C Protocol Standard.

 

33. Why are only professionals registered with LuxCS allowed to conduct a Technical Feasibility Analysis or a project for generating carbon credits? Do these professionals work for the Certifier or are they affiliated with it? Concerned with providing greater security and accuracy in the processes for generating carbon credits and subjected to a strict governance process, LuxCS checks the technical training and registrations of these project developers with their respective professional councils and requires all registrants to pass a Proficiency Exam. In this Exam, the professional must demonstrate knowledge of various aspects of the carbon credit generation process, to better guide area owners.

Registered professionals do not work for or provide services to the Certifier, and all negotiations regarding fees or service conditions are conducted directly between the area's responsible party and these professionals. The person responsible for an area may appoint an unregistered professional to work on their project; however, this professional must register on the Electronic Platform, prepare, and submit to the Proficiency Exam, like all other registered project developers.

 

Investment, Financing, and Taxation

 

34. What is the investment in the entire process for generating carbon credits? LuxCS aims to be a reference in the voluntary carbon credit market and adopts a total cost leadership strategy. Therefore, the best conditions for area owners or their representatives are sought. Thus, depending on the specific conditions of each particular area, the entire process may require an investment, on average, between R$ 80,000.00 and R$ 150,000.00. These are reference values, and some areas may require lower or higher values, depending on local conditions.

 

35. How long does it take to see a return on investment in a carbon credit generation project? There is an increase in the demand for voluntary market carbon credits, which follows the principles of supply and demand. However, it is not possible to specify the time required for the commercialization of credits in the Brazilian market.

 

36. Are there financing lines available to obtain capital for the carbon credit generation process? Currently, only traditional credit lines for individuals or legal entities can be used. Concerned with the long term and a structured voluntary carbon credit market, LuxCS is in discussions with financial institutions to develop specific credit lines that financially support individuals and organizations in their certification processes, within the Triple C Protocol Standard.

 

37. How to be an Investor in carbon credits? There are two ways to invest in carbon credits: (a) participate in an investment fund at a financial institution or (b) partner with a landowner. To invest in carbon credits, it is not necessary to be a landowner or acquire a land area.

 

38. How to find areas to invest in carbon credit generation projects? The Electronic Platform offers opportunities for areas seeking partners for project development. LuxCS, to avoid any conflicts of interest, does not bring together, mediate, or conduct negotiations between investors and area owners or receive commissions from these transactions.

 

39. Is there any safeguard or insurance to mitigate risks during the implementation time of a carbon credit generation project? Yes. The Triple C Protocol Standard, in general, and the various recognized methodologies, in particular, indicate the safeguards that project developers can request, recommend, or permit in the implementation of a project.

Additionally, there is a Guarantee Fund where a small percentage of registered credits is held in custody by an independent financial institution. This Fund is activated in case of fires or natural catastrophes, and the amount of the volume of lost credits is compensated with the proportional retirement of custodied credits. This guarantees market-level integrity of the credits generated on the affected property.

Moreover, areas under projects are monitored by satellites for accurate prediction of potential fire occurrence or other changes in area conditions.

 

40. What is the taxation on carbon credit certification? The carbon market legislation is still being developed in Brazil. Regarding taxation, at this moment, there is no legal provision for the taxation of carbon credit certification. However, both individuals and legal entities need to account for the generated credits, for informational purposes only.

Individuals must report, in their Income Tax declarations, in the "goods and rights" section of the Annual Adjustment Declaration, in the "Group" field, select code 08 - crypto assets. Then, mark code "99: Other crypto assets not included in codes 1, 2, 3, or 10, for example, fan tokens, judicial award tokens, consortium tokens, carbon credit tokens, receivables tokens, among others". Legal entities (companies) need to report in their balance sheet, after certification, the credits in the intangible asset category.

 

41. Can I use carbon credits to offset the income tax of an individual or legal entity? It is not yet possible to offset taxes with carbon credits, but a Bill of Law 2021/21 by congressman Carlos Henrique Gaguim (DEM-TO) is under consideration in the National Congress, which aims to allow tax compensation with carbon credits. If approved, this initiative by the congressman will be another stimulus for the Brazilian carbon market.

Audits and International Accreditation

 

42. How can I be sure that emissions reductions are actually happening? All our projects follow a code of good practices governing the international voluntary market and undergo cycles of third-party audits, ensuring that the project is real, verified, permanent, and additional. For transparency, carbon credits are assigned serial numbers, transferred, and permanently retired in a publicly accessible registry.

 

43. What does carbon credit integrity mean? A carbon credit is considered high integrity if the removals or reductions it represents are real (i.e., beyond the usual scenario), measurable, and verifiable. International standards adopted by LuxCS ensure that emission reductions achieved by carbon projects follow the highest quality principles and processes. This ensures transparency, accountability, and the financial impact of carbon.

 

44. Are projects certified by LuxCS audited by a third party? Following strict corporate governance rules, projects are audited by a third party. A third-party audit is an independent evaluation conducted by an external and impartial organization or individual, to verify whether the carbon credit generation project complies with specific standards, regulations, or requirements. This audit aims to ensure the accuracy, transparency, and credibility of the provided information, increasing the trust in the Triple C Standard and the registered credits.

 

45. Does LuxCS or its professionals receive commissions or provide advisory services to the certification process? Being internationally audited and following strict governance rules, neither the Certifier nor its professionals receive commissions or can demand payments for their services or guidance, beyond the certification fees. These professionals are always interested in providing the most information to improve the certification process and to expand the credibility of the credits issued through the Triple C Protocol Standard.

 

Professionals Accredited by LuxCS

 

46. What is the role of the Carbon Credit Project Developer? This professional plays a significant role in the certification process as they are responsible for conducting the Technical Feasibility Analysis, developing projects, and measurements for annual Verifications, during the lifetime of a project, and can also provide consultancy to area owners at all stages of the process.

 

47. How to become a Project Developer accredited by LuxCS? There are open Calls for Proposals by the Certifier for the accreditation of project developers and with the rules for them to take a Proficiency Exam. These developers need to be familiar with the certification process, the certification platform, and project methodologies to give greater speed, accuracy, and quality to the certification process. However, these developers are not employees, do not receive remuneration from LuxCS, or can speak or make commitments on its behalf, or their employees or proxies.

 

48. Can I appoint a trusted professional to act as a Project Developer in the certification of my credits? Yes, provided some criteria are met. Professionals who can act as Project Developers must have training in the following areas: environmental, forestry, biology, or agronomy engineering, accredited with LuxCS and their respective professional councils. To participate in certification projects, they can be indicated by the certifier or by the landowner if they already have a trusted professional with training and registration in the aforementioned areas. The professional must proceed to get accredited on our Platform and follow the steps of the corresponding Call for Proposals. After passing our proficiency exam, they will be qualified to work with our methodology. At present, the accreditation process and the proficiency exam are free of charge.

 

49. How is a Carbon Credit Project Developer remunerated? As these are self-employed professionals without any labor or direct ties to the Certifier, they will issue invoices for their services against the area owner or their legal representative, with no fees or commissions due to LuxCS for their services

Carbon Compensation and Emission Reduction

 

50. What does 'net zero emissions' mean? According to scientists from the Intergovernmental Panel on Climate Change (IPCC), net greenhouse gas emissions need to be reduced to zero to stabilize global temperatures. 'Net' refers to residual emissions that cannot be reduced but can be 'offset' with carbon credits. Achieving net zero emissions means that all greenhouse gases emitted by humans and their activities must be removed from the atmosphere through reduction measures.

 

51. What is a corporate net zero emissions strategy? A net zero emissions strategy is a concrete decarbonization path aligned with science and follows a recognizable international framework (such as the Net Zero Emissions Standard), which is a plan for reducing corporate emissions. A company can claim to be net zero when its emissions have been reduced by an average of 90%, compared to the base year, with the residual (inevitable) emissions being offset through carbon credits.

 

52. What role does compensation play in net zero emissions trajectories? While compensating for carbon emissions is important, all strategies to zero out the environmental impact of activities make it clear that compensation should be our last option. There are several ways to help companies set clear, rigorous, and responsible climate targets, following science. None of them state that we can only use carbon credits to achieve these goals or even to reach interim targets. In fact, they encourage us to use carbon credits along with a plan to reduce our carbon footprint and get as close to zero emissions as possible.

 

53. Can any company claim net zero emissions? Theoretically, yes. Many companies are now setting net zero emission targets, but not all have a credible, transparent strategy aligned with science. A good net zero emissions strategy should have ambitious yet realistic milestones and show exactly how a company can achieve these goals. Moreover, progress and relevant milestones should be publicly communicated. LuxCS supports the decarbonization of the economy by tokenizing inventory reports, reduction efforts, and emission compensations. We also encourage an A-to-Z approach, where an entire value generation chain is decarbonized.

 

54. Is compensation a license for large companies to pollute the environment? Compensating for emissions is not a license to pollute and should be done within an organizational decarbonization strategy, starting with a certified emissions report and taking other actions to reduce the business's carbon footprint (carbon debit). Preventing corporations from polluting requires a joint effort from governments to enforce relevant regulations and policies and from investors to direct funding towards cleaner energy systems.

 

55. What does a company gain from conducting an emissions inventory? An emissions inventory can be seen as a map for the organization to identify which stages of its process emit the most greenhouse gases. Knowing the critical points, the organization can develop optimization projects or replace such stages with more efficient or less polluting alternatives. Partial or total compensation of emissions with carbon credits within the Triple C Protocol Standard can be performed based on the inventory data.

 

56. What do we gain, me and my company, by zeroing emissions? Carbon-zero organizations have the opportunity to exploit their vanguard in conscious production and socio-environmental responsibility through the valorization of their products and brand(s), in front of other market players, consumers, clients, business partners, and the community.

 

UnCarbonize Program

 

57. What is LuxCS's decarbonization program? The so-called UnCarbonize is a certification program for greenhouse gas emission inventories aimed at individuals and organizations that want to know and act to reduce the impact of their activities on the environment.

 

58. How does the UnCarbonize program work? The first step is to register on the Electronic Platform and follow the step-by-step guide. After registering the intention to carry out the emission certification of your organization, a project developer will continue the process and request the necessary documentation.

 

59. My organization pollutes less than competitors, how do I turn this differential into a financial asset (carbon reduction credits)? The UnCarbonize program also includes the certification of low-carbon organizations through the generation of reduction credits. After conducting the emissions inventory, the company can request a project comparing it with a baseline of emissions from analogous activities.

 

Social Responsibility

 

60. Does carbon compensation promote global development? Beyond providing externally verified emission reductions, carbon compensation projects drive low-carbon capital and technology into local economies, creating jobs, fostering educational activities, and supporting indigenous and quilombola communities.

 

61. Do carbon projects provide additional benefits beyond the removal or avoidance of carbon? Carbon projects provide a variety of additional benefits, causing a positive environmental, economic, social, and cultural impact. For example, they can support biodiversity in the region, improve local infrastructure, create jobs, and provide educational opportunities for local communities. Additionally, these projects can promote gender equality by providing training and jobs for women. It is important to highlight that they respect the rights of indigenous peoples and the laws protecting them.

Thus, acquiring carbon credits according to the Triple C Protocol not only helps companies or individuals meet their sustainability goals but also contributes significantly to improving the world around us.

 

62. Are carbon projects a threat to indigenous peoples or quilombolas? For many indigenous peoples and local communities, their lands or protected areas play a central role in their lives. Validated and properly verified carbon projects have the potential to bring significant improvements in livelihoods, as well as protect the rights of these communities. Furthermore, such projects can create employment opportunities, preserve traditional cultures, and protect endangered species. At the same time, they contribute to the security of the lands and resources of these communities, all while playing a crucial role in removing carbon from the atmosphere.

 

63. Why is carbon compensation sometimes presented as controversial? Some NGOs (Non-Governmental Organizations) have criticized carbon compensation, labeling it as a form of "greenwashing." However, this criticism often oversimplifies the reality and, in some cases, lacks accurate information. In practice, carbon compensations are inherently complex. In practice, an organization that wishes to partially or fully offset its carbon footprint (carbon debit), an industry for example, initially conducts an inventory of its Greenhouse Gas emissions and certifies it with LuxCS. The next steps are to reduce consumption or change the energy base, alter or remodel their processes, or even, in some cases, replace machinery. The last decision is to partially or fully compensate for the emissions, especially what the company cannot reduce. It's in these compensations that voluntary market carbon credits are used. The credits themselves are a financial incentive to conserve areas that remove carbon from the atmosphere or return part of the investments to organizations that invested to reduce their emissions and generated reduction credits.