As the year changes, despite positive developments, certain challenges related to the carbon sequestration sector seem to persist year after year. One such challenge appears to be the definition of double counting, even though the issue is, in reality, quite straightforward.
The inconsistencies in defining double counting often stem from how the actions of governments and private actors are calculated together. In practice, the real question lies in whether including the actions of private entities in government figures constitutes double counting or not.
In reality, this is not double counting and the reasoning behind this will be explained shortly. However, the prevailing interpretation of the definition leads to a misconception that recurs in almost every discussion we have and many companies also mistakenly believe otherwise. For this reason, we felt it necessary to revisit the facts about double counting.
In double counting, there are many valid subtypes
The ICVCM (Independent International Governance Body, which maintains a global standard for voluntary carbon markets) provides a clear definition of double counting.
According to ICVCM, double counting includes several subtypes: double claiming, double counting, double issuance, and double use.
Double claiming refers to a situation where two different entities claim the same greenhouse gas emission reduction or removal. Double counting, on the other hand, occurs when the same reduction or removal is accounted for more than once, which is often also referred to as double use.
In double issuance, the logic works in the opposite direction compared to the previous examples—this happens when more than one carbon credit is issued for the same emission.
Emissions and reductions included in the government's figures as well
While the ICVCM partially avoids addressing the boundary between private actors and the state in terms of double counting, the EU-funded Marvic project provides clarification.
The project, which develops monitoring, reporting and verification systems for carbon removals in EU agriculture, states on its website that when company emissions within a country (e.g., in the effort-sharing sector) are included in the government’s emission figures, it is logical that, conversely, reductions within the country’s value chains are also included in the government’s compensations.
Thus, there is no double counting when carbon sequestration activities carried out in Finland are also included in Finland’s national carbon sequestration figures, as emissions are accounted for in the same way.
Although Finland’s existing forests are part of the government’s calculations, new afforestation projects are new climate actions that can be traded without causing double counting.
The boundaries of trade between countries have also been taken into account
Within countries, the calculation formula works seamlessly. However, in domestic discussions, the potential surplus or deficit trade of carbon sinks between states has been raised as the next double counting issue.
A marketplace for such carbon sink trading does not yet exist, but EU Regulation 2023/839 already establishes clear criteria and boundaries for trading. If a state wishes to sell its own carbon sinks or emission reductions achieved through other measures, it must first demonstrate and verify that the compensation in question has not already been used elsewhere.
Additionally, in the government’s proposal for a new fuel distribution obligation law (HE 121/2024), it is explicitly stated that if operators wish to utilize the new flexibility mechanism, the actions must take place in Finland, where the land-use sector can also be utilized without double counting.
It is, however, essential that the selected climate measures are carried out under high-quality and functional standards, such as those outlined in the CRCF Regulation. This ensures that the actions taken truly achieve the desired climate impacts.
Upon closer examination, double counting has been carefully defined with future considerations in mind. Clear communication and decisive action from policymakers, both in Finland and at the EU level, are now required to address genuine double counting issues. This will prevent the entire sector from being cast in a negative light due to the unfortunate prevalence of misconceptions.
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