Low-carbon label: how does it work and what is it for?

In 2019, France will have a tool to develop and promote carbon reduction and sequestration projects on its territory: the low-carbon label. This label is also a way of better controlling decarbonization projects and supporting their players towards a more sustainable economic model. How to create a low-carbon project. What are these "made in France" carbon credits worth?

Matthieu Duault
Climate Copywriter
Update : 
01.04.2025
Publication: 
19.12.2023
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French companies that have carried out a carbon assessment and initiated a process to decarbonize their activities are bound to have heard of the low-carbon label. This label is designed to guide companies towards carbon offset projects, or rather carbon contribution projects, that meet strict specifications set by the French Ministry of Ecological Transition.

At a time when the carbon credit market has suffered from various scandals to the point of acquiring a relatively bad reputation, this label should make it possible to identify CO2 reduction and sequestration projects that are considered reliable because they benefit from a certification system set up by the French government.

How does this label work? What are its requirements? How can a project be certified?

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What is the low-carbon label?

An offshoot of the national low-carbon strategy (SNBC), the low-carbon label is a Franco-French tool designed to develop, finance and promote CO2 reduction and sequestration projects carried out in France.

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In what context was it created?

The Kyoto Protocol, ratified by over 180 countries in 1997, introduced the principle of carbon credits. These credits can be obtained by financing projects to sequester or reduce CO2 emissions worldwide. Initially, they were intended to enable industrialized countries to finance projects in developing countries.

This was followed by the Paris Agreements of 2015, aimed at combating global warming by limiting the rise in temperatures to well below +2°C. To achieve this goal, France, and the European Union in general, adopted the Green Pact for Europe to achieve carbon neutrality by 2050, in line with IPCC recommendations.

It is in this context that France has set up the Stratégie Nationale Bas Carbone, its plan to achieve this goal of neutrality. The low-carbon label, launched in 2019 by the Ministry of Ecological Transition and Solidarity, is one of the tools making up this plan to reduce its GHG emissions. It is also a decarbonization lever cited many times within the 2021 Climate and Resilience Law, attesting to the French government's determination to make it an important element of its transition plan.

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What is the aim of the low-carbon label?

First and foremost, the low-carbon label is a political initiative.

To achieve its carbon neutrality objectives, France has decided to develop its own carbon contribution system. While projects enabling carbon credits to be issued are most often set up in developing countries, the French government wanted to encourage their development on its own territory.

In this way, it promotes local projects in favor of environmental transition and enables certain players, such as those in the agricultural sector, to find funding to support their transition to a sustainable model.

It's also a way of better controlling the viability of the projects carried out, given that carbon credit issuance worldwide has been the subject of numerous scandals in recent years, particularly concerning the reliability of carbon reduction or sequestration projects.

The Ministry of Ecological Transition has set a number of objectives for the low-carbon label:

  • Encourage the development of emission reduction and carbon sequestration projects that go beyond those already set out in the legislative framework.
  • Control and certify the viability of carbon reduction and sequestration projects by providing an appropriate regulatory framework.
  • Redirect private financing towards sustainable projects that contribute to France's goal of carbon neutrality by 2050.

 

What are the selection criteria?

To begin with, it should be made clear that the low-carbon label is a voluntary initiative on the part of project sponsors. There is no legal obligation for 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 any business sector, and must follow one of the methods validated by the low-carbon label. They generate carbon credits that companies can then purchase, enabling them to contribute to global carbon neutrality.

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

To qualify for the low-carbon label, a project must be additional. Additionality requires project sponsors to demonstrate that their projects reduce GHG emissions relative to a baseline scenario. For example, planting trees on land that was initially non-wooded sequesters more CO2 than leaving it as is.

Additionality is one of the 5 major principles of carbon credit issuance, along with measurability, verifiability, permanence and uniqueness, which are also taken into account during the project appraisal phase by the relevant authorities.

Projects must also have co-benefits, i.e. they should ideally have a positive impact on other elements such as soil quality, water quality or biodiversity. Of course, this also means that the project must not have a serious negative impact on other factors (social, environmental, economic, etc.).

The co-benefits taken into account are divided into 4 categories:

  • socio-economic impact: economic development and regional attractiveness are largely taken into account, whether in terms of job creation or preservation, or any other positive socio-economic spin-off for the project's local area.
  • Biodiversity: preserving biodiversity and protecting the living world are crucial factors. This includes the beneficial effects of developing agroecology, protecting pollinators and restoring ecosystems.
  • water protection: long-term protection of groundwater and surface water quality are also part of the criteria. This includes treatment systems, irrigation, protection of wetlands...
  • soil preservation: this co-benefit takes into account the maintenance of soil quality. Erosion control, agroforestry and enrichment with organic matter are just some of the methods used to maintain soil fertility and improve its CO2 storage capacity.

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How to obtain the low-carbon label

Projects can be carried out by any natural or legal person, individually or collectively, and must follow a strict 4-stage protocol to obtain the label, followed by 2 additional post-labeling stages.

1 - Project notification

Any project owner wishing to obtain the Low-Carbon Label must first register online as a Low-Carbon Label applicant. The project owner can either handle the labeling process directly, or use a representative. Notification informs the certification authority of the project's implementation.

The notified project must be part of a methodology already validated by the low-carbon label.

2- Label application

The application stage can take place immediately after notification of the project. This involves formalizing the desire to obtain the low-carbon label and providing all the information presenting the project in detail, as well as the supporting documents proving that the project is part of a low-carbon label method.

The project leader must also be able to demonstrate his or her ability to develop, maintain and monitor the project throughout its deployment.

3 - Examination by the competent authority

The project is then examined by the certification authority. This process takes place within 2 months of the request for certification. This period may be extended if the authority requests additional information and/or clarification from the project owner.

4 - Project certification

The final stage is certification.

If the project and its 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 financiers.

If the application for certification is rejected, the project owner will receive a document explaining why the project could not be certified.

5 - Request for verification of emission reductions

Once the project has been launched, its promoter must have it audited by an independent auditor. This audit generally takes place within 5 years of the project's certification.

Once the audit has been completed, the project owner must submit a request for verification of emission reductions to the certification authority, together with follow-up documents and the audit report.

6 - Recognition of GHG emission reductions

Once the emissions reductions have been verified, the project owner submits an application for recognition of the greenhouse gas emissions reductions to the regional prefect, which can then be used by the project financer(s) to certify the viability of the carbon credits obtained.

Certification process for low-carbon projects
Control process for low-carbon projects (source: INFCC)

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Low-carbon label methods

To date, there are 15 validated methods enabling affiliated projects to obtain the low-carbon label. These are examined and approved by the French Energy and Climate Agency (DGEC).

A method must present a type of action that is beneficial for the climate, enabling a defined quantity of carbon to be reduced or sequestered (hedge planting, forestry projects, building renovation, etc.).

Any type of player can develop and propose a method: companies, associations, inter-professional unions...

The process of validating a method can be relatively long, depending on its specific characteristics, and involves many players, starting with the DGEC. The process includes a 3-week public consultation, as well as a study phase by the Scientific and Technical Group set up to monitor certified low-carbon methods.

The methods currently validated cover 6 areas.

Agriculture

There are currently 6 different agricultural methods available, and they are supported by various players in the sector.

  • The Carbon Agri method, which aims to reduce emissions from arable and beef farming through changes in practices, and to develop carbon sequestration methods within the agricultural sector.
  • The Haie method, which promotes the development and sustainable management of hedgerows on farms.
  • The Orchard Planting method, which encourages the planting of orchards on land not cultivated for this purpose.
  • The SOBAC'ECO TTM method for reducing synthetic and organic inputs
  • The Ecométhane method, which aims to reduce methane emissions linked to the digestion process in dairy cattle by acting on their feed.
  • The Field Crops method, which aims to reduce GHG emissions generated by field crops through changes in farming practices.

The forest

The forestry-related methods have been developed by the CNPF (Centre National de la Propriété Forestière) and focus on reducing emissions in the forestry-wood industry.

  • The afforestation method, which consists of reforesting plots that have not been forested for at least 10 years‍
  • The Reconstitution of degraded forest stands method , which aims to restore forests that have suffered significant damage from a variety of causes (fires, storms, disease...)‍
  • The Balivage method, which converts coppice into high forest to increase the amount of carbon sequestered.

The building

Two methods are currently validated in the building sector.

  • The Renovation method, which, as its name suggests, consists in developing building renovation, in particular using materials derived from reuse.
  • The New Biobased Building method involves the construction of new buildings over 500m2 incorporating a large quantity of biobased materials.

Transportation

To date, there is only one validated method for the transport sector.

  • The "Tiers-lieux" method , which targets the development of "tiers-lieux" dedicated to telecommuting in areas of low or intermediate density. This initiative is designed to reduce the number of journeys made by employees between home and work.

Natural and marine areas

Two validated methods are currently available for the marine sector.

  • The Herbiers de Posidonie method, which aims to make the most of the blue carbon stored by Posidonia meadows on the French Mediterranean coast, which are often damaged by anchoring.
  • The Mangrove method , which targets the enhancement of CO2 storage in degraded mangroves and swamp forests, through the introduction of plant species or the improvement of the physico-chemical conditions necessary for their development.

Urban spaces

The first method dedicated to urban space has recently been validated.

  • The Tree City method consists in developing tree-covered projects in urban areas to promote carbon sequestration and the replanting of trees that have suffered heavy damage.

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The limits of the low-carbon label

While the low-carbon label is a great incentive to develop CO2 reduction and/or sequestration projects, it suffers from the same limitations as those associated with the development of the carbon credit market.

The first source of concern is the actual reduction in 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 emissions reduction. Project auditing and control missions must therefore be carried out in an irreproachable manner, to ensure that the label is not discredited, as has been the case with certain project owners and carbon credit certifiers in recent years.

The second limitation is the risk of companies misusing carbon credits as a greenwashing tool. Many companies have used carbon credits to boast that their products or services are supposedly carbon-neutral, without having embarked on any real policy to reduce the emissions linked to their operations by setting up a clear carbon trajectory.

Nevertheless, European regulations have moved in the right direction, considerably limiting the scope for companies to use carbon credits as a communication tool.

Finally, while the financing of carbon reduction or sequestration projects by companies is necessarily commendable, the priority for them must remain to reduce the GHG emissions linked to their activities and those of their value chain through a change of model or the development of solutions to combat climate change. If there will always be residual emissions linked to the company's activity, a good complementary way of contributing to neutrality will then be the purchase of carbon credits, but only as a complement to actions to reduce their emissions.

 

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