Carbon standard Social Carbon plans to release a carbon crediting methodology for peatland restoration, with separate modules tailored to different areas, the company has told Carbon Pulse.

While the first module will address peatland rewetting in agricultural land within temperate climates, primarily in Europe, future releases will look at other contexts – such as forestry and abandoned land – and climates, said Mike Davies, CEO of Social Carbon.

“Peatland restoration hasn’t received as much attention as it deserves. Our aim is to scale this up through applying a modular approach, as you can’t have one methodology which covers everything,” Davies told Carbon Pulse.

“For example, agriculture and forestry differ in terms of how peatlands should be rewetted. Incorporating specific modules into the overarching methodology will allow us to reflect those differences.”

Davies said the methodology is expected to be finalised by the end of September and will then go through public consultation.

Under the framework, one unit will represent one tonne of CO2e reduced or avoided from entering the atmosphere.

PREMIUM PRICES

Credits will be publicly listed and are expected to trade at higher prices compared to the average of the voluntary carbon market (VCM).

“We won’t set the price, but my impression is that these credits will need to be a more premium price, because the cost of implementing is a lot greater than the alternatives,” said Davies.

In recent years, several initiatives have emerged to design methodologies for peatlands, though some are based on assumptions that are no longer applicable or considered scientifically robust, according to Davies.

“We analysed existing methodologies, and some were developed quite a while ago and have not been updated,” he said.

“Others are ambiguous, which creates opportunities for misunderstandings with project developers. Given the substantial cost of developing these projects, that ambiguity shouldn’t really exist.”

Peatlands contain 44% of all soil carbon, more than the amount stored in all the world’s forests, according to International Union for Conservation of Nature.

They also play a critical role in providing habitat for rare plants, invertebrates, and birds as well as enhancing several ecosystem services, such as water flow regulation, nutrient cycle stabilisation, and protection against wildfires.

BIODIVERSITY BENEFITS

Projects using Social Carbon’s methodology will be required to monitor their impacts on nature, with the company currently in the process of identifying metrics for quantifying peatland-specific biodiversity benefits.

“This is a very different scenario from conservation or afforestation projects,” said Anna Uebachs, carbon project developer at Munich-based peatland restoration company Aeco, who contributed to drafting the methodology.

“For example, a good rewetting project might reduce species diversity, as many of the species that have started to operate in the area aren’t actually native there and have been able to flourish because peatlands have been drained. That nuance must be reflected in the framework,” she told Carbon Pulse.

Existing peatland frameworks, such as the UK Peatland Code, are likely to combine biodiversity credits with carbon in the near future.

An emerging Irish peatland standard also aims to address biodiversity credits before the end of 2025.

“Biodiversity credit markets could support peatland restoration but right now, we’re seeing that the primary mechanism to help finance this is going to be carbon,” said Davies.

Social Carbon is on track to release a separate methodology for nature stewardship credits during the third quarter of this year at the latest, with the first pilots expected to launch in 2025.

The company also said that it is reviewing its current methodologies to ensure they are in line with the latest science and best practices in carbon management and sustainability.

By Sergio Colombo – sergio@carbon-pulse.com