Verra launches new cookslove methodology

Verra has launched the VM0050 cookstove methodology, consolidating previous methodologies into a single framework incorporating best practices in project design and digital Monitoring, Reporting, and Verification (dMRV). This update aims to align with the Integrity Council for the Voluntary Carbon Market's (ICVCM) Core Carbon Principles (CCP) and is expected to impact supply and demand within the voluntary carbon market (VCM).

Cookstove projects have been integral to carbon markets since 2008, starting with methodologies under the Clean Development Mechanism (CDM). The CDM’s AMS-I.E. and AMS-II.G. were revised under Verra’s Verified Carbon Standard (VCS) program through the release of VMR0011 and VMR0006, respectively, which will both become inactive from 9 October 2024 onwards. 

The new VM0050, developed with Atmosphere Alternative, consolidates the previous energy efficiency and fuel-switching cookstove methodologies to one that requires a more comprehensive approach to emissions reduction quantification. From 9 October 2024 onwards, VM0050 is active, and the following changes apply to this update:

• Streamlined Monitoring: Enhanced use of direct measurement techniques (e.g., stove use monitors, fuel weight sensors, electricity meters) to improve the accuracy of tracking fuel consumption, and stove use becomes the preferred monitoring method. Additional requirements were added for the Kitchen Performance Test (KPT), which was used as a monitoring option, giving more credibility to the project emissions calculations.
• Improved Sampling Guidance: Additional clarifications on sampling methods and measurement procedures to ensure consistency.
• Baseline Calculation: Revised approaches to calculating the fraction of non-renewable biomass with discount factors on its calculation and updated default values for baseline efficiency and wood-to-charcoal conversion factors. Additional measures to cross-check stove stacking scenarios were added, making it more conservative.
• Validation Requirement: Projects applying for listing on the Verra registry after 9 October 2024 or renewing their crediting period and completing validation after 31 May 2025 must apply the new VM0050 methodology.
• Grace Period and Reconciliation: Projects completing validation before 31 May 2025 can still be validated under older methodologies (VMR0006 v1.2 or VMR0011 v1.0). Additionally, registered projects previously using VMR006 v1.2, AMS I.E., AMS II.G., or VMR0011 can revise past verification periods to reassess emissions reductions in line with VM0050.
• 2027 Vintage Year Deadline: All projects must adopt VM0050 starting with the 2027 vintage year. Projects switching for this year can validate and submit updated project descriptions alongside their verification and monitoring reports, with a submission window of up to five years after the last verification.

Besides emissions reductions, clean cookstove projects are described as having various benefits related to gender equity and health. Regarding air quality, cookstove projects are considered a key strategy in reducing the number of deaths from household air pollution, which the World Health Organization (WHO) estimated to be 3.2M in 2020.

Despite their longstanding role in the carbon markets, cookstove projects have come under increasing scrutiny. A January 2024 research paper criticized these methodologies for over-crediting emissions reductions in many projects. In response, Verra released a statement addressing the study and outlining the next steps. The recent controversy involving Kenneth Newcombe, former CEO of C-Quest Capital, further fueled concerns about over-crediting under the older VMR0006 methodology.

As VCM participants increasingly prioritize quality and integrity, registries have sought to obtain CCP labels for their methodologies. Verra’s cookstove methodology consolidation and update is part of that push, as they had submitted the new VM0050 for CCP assessment. For Verra’s cookstove methodologies that were consolidated into VM0050, their multi-stakeholder assessment has already concluded. Verra could have anticipated rejections for their previous cookstove methodologies based on the two rounds of CCP assessment already announced. So, it may have submitted VM0050 for assessment to receive approval as soon as possible for their cookstove credits. This approval could take some months as ICVCM, according to their press release from the last assessment, described that the decision and announcements for assessing forestry-related methodologies are expected in the coming months.

From 2022 onwards, Verra has issued and retired 43.04M and 9.04M cookstove-related credits, respectively. Most of them fall under the three methodologies directly impacted by VM0050, which can be seen in the table below:

While Verra is by far the largest registry in terms of issuances and retirements, its cookstove credit issuances are significantly less than the 66.59M credits issued by Gold Standard during the same period. Additionally, TASC SA has been the largest retiree of credits from Verra’s cookstove methodologies, accounting for 3.75M retirements under VMR0006.

The updated methodology is expected to enhance the credibility of cookstove credits, but developers may face higher operational costs to comply with the new standards. In the long term, cookstove credits under VM0050 may command a higher price due to quality and integrity improvements, which could increase the stratification in VCM credit prices. The typical number of credits issued for these projects may also drop from changes in the monitoring and baseline calculations, which could also lead to upward pressure on prices due to potential supply constraints.

The 33.15M credits available under the three methodologies impacted by VM0050 account for many available credits, alongside Reducing Emissions from Deforestation and Forest Degradation (REDD+) and renewable energy projects. If these credits are approved for ICVCM’s label, this would lead to a large influx in CCP credit supply, which could place downward pressure on CCP credit prices.

Verra’s new cookstove methodology marks a significant step towards higher integrity in the VCM. Its alignment with ICVCM’s CCP and improvements in MRV processes are poised to increase confidence in cookstove credits. Despite short-term adjustments, this development is expected to positively impact both credit supply and demand, making these projects more attractive to carbon buyers focused on high-quality offsets. 

For more information on how this may affect you, please contact our Market Intelligence team.