Low-Carbon label: how does it work and what is its purpose?

In 2019, France introduced a tool designed to develop and promote carbon reduction and sequestration projects within its borders: the Low-Carbon Label. This label is also a way to better monitor decarbonization projects and support stakeholders in transitioning to a more sustainable economic model. How do you create a Low-Carbon labeled project? What are these French-made carbon credits actually worth?

Matthieu Duault
Climate Copywriter
Publication : 
19.12.2023
Table of Contents
Example H2
Request a demo

Please note: This article concerns French legislation. The requirements described may not apply in other countries.

‍

French companies that have conducted a carbon footprint assessment and initiated a process to decarbonize their operations have undoubtedly heard of the Low-Carbon Label. It is intended to guide companies toward carbon offsetting—or rather, carbon contribution—projects that meet strict specifications established by the Ministry of Ecological Transition.

While the carbon credit market has suffered from various scandals, leading to a somewhat tarnished reputation, this label is designed to identify CO2 reduction and sequestration projects that are considered reliable because they benefit from certification established by the French government.

How does this label work? What are its requirements? How can a project obtain certification?

‍

What is the Low-Carbon Label?

Stemming from the National Low-Carbon Strategy (SNBC), the Low-Carbon Label is a domestic French tool aimed at developing, financing, and promoting CO2 reduction and sequestration projects carried out within French territory.

‍

In what context was it created?

The Kyoto Protocol, ratified in 1997 by more than 180 countries, introduced the principle of carbon credits. These credits can be obtained by financing CO2 sequestration or emission reduction projects around the world. Initially, they were intended to allow industrialized nations to fund projects undertaken in developing countries.

This was followed by the 2015 Paris Agreement, which aims to combat global warming by limiting the temperature rise to well below 2°C. To achieve this goal, France, and the European Union more broadly, committed via the European Green Deal to reaching carbon neutrality by 2050, in line with IPCC recommendations.

It is within this framework that France implemented the National Low-Carbon Strategy, its plan to reach this neutrality goal. The Low-Carbon Label, launched in 2019 by the Ministry of Ecological Transition, is one of the tools within this plan to reduce greenhouse gas emissions. It is also a decarbonization lever cited numerous times in the Climate and Resilience Law of 2021, attesting to the French government's desire to make it a key element of its transition plan.

‍

What is the purpose of the Low Carbon Label?

First and foremost, the initiative behind the Low Carbon Label is political.

To reach its neutrality goals, France wanted to develop its own carbon contribution system. While projects that generate carbon credits are usually implemented in developing countries, the French government wanted to encourage their development within its own national territory.

It promotes local projects dedicated to environmental transition and allows certain stakeholders, such as those in the agricultural sector, to find funding to support their shift toward a sustainable model.

It is also a way to better monitor the viability of projects, as the issuance of carbon credits worldwide has been the subject of numerous scandals in recent years, particularly regarding the reliability of projects in terms of carbon reduction or sequestration.

The objectives set by the Ministry of Ecological Transition through the deployment of the Low Carbon Label are manifold:

  • Encourage the development of projects for carbon reduction and sequestration that go beyond those already established by the legislative framework.
  • Monitor and certify the viability of projects for carbon reduction and sequestration by providing an appropriate regulatory framework.
  • Redirect private funding toward sustainable projects that contribute to France's goal of carbon neutrality by 2050.

 

What are the selection criteria?

To begin with, it is important to clarify that the Low Carbon Label is a voluntary initiative for project developers. There is no legal obligation requiring them to certify their GHG emission reduction projects.

The Low Carbon Label certifies projects aimed at reducing or sequestering carbon. These projects can be initiated in all sectors of activity and must follow one of the methods validated by the Low Carbon Label. They generate carbon credits that are then purchased by companies, allowing them to contribute to global carbon neutrality.

To date, 864 projects have been labeled across France, and 194 of them have been 100% funded.

To be awarded the Low Carbon Label, a project must be additional. Additionality requires project developers to provide proof that their projects reduce GHG emissions compared to a baseline scenario. For example, planting trees on land that was initially unwooded sequesters more CO2 than leaving it as is.

Additionality is also one of the 5 core principles of carbon credit issuance, alongside measurability, verifiability, permanence, and uniqueness which are also taken into account during the project review phase by the competent authorities.

The projects carried out must also demonstrate co-benefits, meaning they should ideally have a positive impact on other elements such as soil quality, water quality, or biodiversity. This naturally implies that, conversely, the project must not have any serious negative effects on other factors (social, environmental, economic, etc.).

The co-benefits considered are divided into 4 categories:

  • socio-economic impact: economic development and regional attractiveness are key considerations, whether through job creation or retention, or any other positive socio-economic impact within the project's host region.
  • biodiversity: preserving biodiversity and protecting living organisms are crucial elements. Beneficial effects related to the development of agroecology, the protection of pollinators, or the restoration of ecosystems are all taken into account.
  • water protection: the long-term protection of groundwater and surface water quality is also among the criteria. This includes treatment systems, irrigation, and the protection of wetlands.
  • soil preservation: this co-benefit focuses on maintaining soil quality. Erosion control, agroforestry, and enrichment using organic matter are among the methods used to maintain fertility and improve CO2 storage capacity.

‍

How do you obtain the Low-Carbon Label?

Projects can be led by any individual or legal entity, whether individually or collectively, and must follow a strict 4-step protocol to obtain the label, followed by 2 additional post-labeling steps.

1 - Project notification

Any project leader wishing to obtain the Low-Carbon Label must first register online as a Low-Carbon Label applicant. The project leader can manage the labeling process directly or use an agent. Notification informs the authority in charge of labeling that the project is being implemented.

The notified project must fall under a methodology already validated by the Low-Carbon Label.

2- Labeling application

The labeling application process can begin immediately after the project notification. This step formalizes the intent to obtain the Low-Carbon Label and requires providing comprehensive project details along with supporting documentation to prove the project aligns with a Low-Carbon Label methodology.

The project lead must also demonstrate their capacity to develop, maintain, and monitor the project throughout its deployment.

3 - Review by the competent authority

The project is then reviewed by the authority in charge of labeling. This review is completed within 2 months of the application. This timeframe may be extended if the authority requests additional information and/or clarifications from the project lead.

4 - Project labeling

The final step is the labeling process.

If the project and its associated methodology are deemed viable by the competent authority, the project is awarded the label and listed on the Low-Carbon Label website to inform potential funders.

If the labeling application is rejected, the project lead will receive a document outlining the reasons why the project could not be labeled.

5 - Application for verification of emission reductions

Once the project is underway, the lead must have an audit conducted by an independent auditor. This audit typically takes place within 5 years of labeling.

Following the audit, the project lead must submit an application for verification of emission reductions to the labeling authority, accompanied by monitoring documents and the audit report.

6 - Recognition of GHG emission reductions

Once the emission reduction verification is complete, the project lead submits a request to their regional prefect for the recognition of greenhouse gas emission reductions, which can then be used by the project's funder(s) to certify the validity of the carbon credits obtained.

Processus de labellisation des projets bas-carbone
Control process for Low-Carbon labeled projects (source: INFCC)

‍

Low-Carbon Label methodologies

To date, there are 15 validated methodologies that allow affiliated projects to obtain the Low-Carbon Label. These are reviewed and approved by the Directorate General for Energy and Climate (DGEC).

A methodology must outline a climate-beneficial action that reduces or sequesters a defined amount of carbon (e.g., planting hedgerows, forestry projects, building renovations).

Any type of stakeholder can develop and propose a method: companies, associations, interprofessional unions, etc.

The method validation process can be relatively long depending on the specific characteristics of the method and involves numerous stakeholders, starting with the DGEC. The process notably includes a 3-week public consultation as well as a review phase by the Scientific and Technical Group established to oversee certified low-carbon methods.

The currently validated methods cover 6 sectors.

Agriculture

There are currently 6 agricultural methods, supported by various industry stakeholders.

  • The Carbon Agri method, which aims to reduce emissions from field crops and cattle farming through changes in practices, as well as to develop carbon sequestration methods within the agricultural sector
  • The Hedgerow method which focuses on the development and sustainable management of hedgerows on farms
  • The Orchard Planting method which aims to encourage the planting of orchards on land not previously used for this purpose
  • The SOBAC’ECO TTM method which targets the reduction of synthetic and organic inputs
  • The Ecométhane method which aims to reduce methane emissions linked to the digestion process of dairy cattle by adjusting their feed
  • The Field Crops method which aims to reduce GHG emissions generated by large-scale crop farming through changes in agricultural practices

Forestry

Methods related to the forestry sector were developed by the CNPF (National Center for Forest Ownership) and focus on reducing emissions within the forest-wood industry.

  • The Afforestation method, which involves reforesting plots that have been unwooded for at least 10 years‍
  • The Degraded Forest Stand Restoration method which aims to restore forests that have suffered significant damage from various causes (fires, storms, disease, etc.)‍
  • The Standard-Tree Selection method which involves converting coppice into high forest to increase the amount of sequestered carbon

Buildings

Two methods are currently approved in the building sector.

  • The Renovation method which, as the name suggests, involves promoting building renovation, particularly by using reclaimed materials
  • The Bio-based New Building method involves the construction of new buildings over 500m2 that incorporate a large quantity of bio-based materials.

Transport

The transport sector currently has only one approved method.

  • The Third-Place method which targets the development of third-party spaces dedicated to remote work in low- or medium-density areas. This initiative is intended to reduce the distance employees travel between their homes and their workplaces.

Natural and marine spaces

The marine sector currently has two approved methods.

  • The Posidonia Seagrass Bed method, which aims to promote blue carbon storage by Posidonia seagrass meadows along the French Mediterranean coast, which are often degraded by anchoring.
  • The Mangrove method which targets the promotion of CO2 storage in degraded mangroves and swamp forests by introducing plant species or improving the physical and chemical conditions necessary for their healthy development

Urban spaces

The first method dedicated to urban spaces was recently validated.

  • The Urban Tree method consists of developing tree canopy projects in urban environments to promote carbon sequestration and the replanting of trees that have suffered significant damage

‍

The limitations of the Low-Carbon Label

While the Low-Carbon Label is a fantastic incentive for developing CO2 reduction and/or sequestration projects, it does, however, suffer from the same limitations as those associated with the development of the carbon credit market.

The primary source of concern is the actual reduction of GHG emissions. Based on a baseline scenario and therefore a hypothesis, it can be difficult to estimate the real impact of projects in terms of emission reductions. Project audit and monitoring missions must therefore be conducted impeccably so that the label is not discredited in the way that some project developers and carbon credit certifiers have been in recent years.

The second limitation is the risk of companies misusing carbon credits as a tool for greenwashing. Many companies have used carbon credits to claim a supposed carbon neutrality for their products or services without having initiated any real policy to reduce the emissions linked to their operations by implementing a carbon trajectory that is clear.

Nevertheless, European regulations have evolved in the right direction and have considerably limited the ability of companies to use carbon credits as a communication tool.

Finally, while corporate funding of reduction or sequestration projects is certainly commendable, Their priority must remain reducing GHG emissions linked to their operations and those of their value chain through a change in business model or the development of solutions to combat climate change. While there will always be residual emissions linked to a company's activity, a good complementary way to contribute to carbon neutrality is to purchase carbon credits, but only as a supplement to their emission reduction efforts.

 

Sources: