Kita x BeZero report follow-up: MRV deep dive with DNV

In April, Kita published a report with global carbon ratings agency BeZero exploring the ways in which traditional capital market mechanisms can be applied to the carbon dioxide removal (CDR) market to unlock growth. We considered the need for the ‘three pillars of integrity’ – insurance, ratings and MRV – as integral cornerstones to scale a high integrity CDR market. We are delighted to publish a follow-up deep-dive on MRV with Tim Hare at DNV, highlighting the ways in which strong and transparent MRV will help carbon market participants channel their capital into impactful CDR solutions.

What does DNV do?

DNV is the independent expert in risk management and assurance, operating in more than 100 countries. Through its broad experience and deep expertise DNV advances safety and sustainable performance, sets industry benchmarks, and inspires and invents solutions. DNV is a leading provider of MRV for the CDR industry and enables its customers and their stakeholders to make critical decisions with confidence.

At the most basic level, what is MRV?

MRV for engineered CDR solutions provides a standardised methodology for Measuring, Reporting, and Verifying CDR activities. This helps to promote transparency and accountability in CDR efforts and provides the foundation for CDR markets. It is an essential tool for tracking progress towards carbon removal goals and promoting a more sustainable economy.

• First, a project needs to demonstrate that it can absorb more CO₂ than it will emit. This is typically done through a Lifecycle Assessment (LCA) and achievement of GHG quantification from a GHG Crediting programme or ISO 14064-2.

• Second, the project must implement its operations in accordance with the GHG accounting methodology and record its performance, generating a monitoring report to quantify CO2 removals and storage.

• Third, an independent third party then verifies the report, and carbon credits can be issued based on their positive verification statement.

This is the MRV process. It is simple, but essential for proving a CDR project's impact on reducing greenhouse gas emissions. Without MRV, there is no trust in the efficacy of the CDR process.

How does MRV work?

Key to MRV is that an independent third-party validates the CDR project’s methodology. DNV can support the development process of a CDR project’s methodology, but this is a document which is owned and developed by the project. DNV validates that the requirements listed in ISO 14064-2 are incorporated into the methodology, thus ensuring robustness and accuracy of the approach.

During the development of the methodology and any associated project design document, DNV’s typical support will be in the form of three preliminary assessments of the draft methodology, each analysing the document in increasing detail. Feedback is provided following each assessment. The objective of this process is that DNV will be able to outline major mistakes and/or inconsistencies within the methodology that could result in a negative validation statement.

The requirements outlined in the methodology are subsequently verified by DNV. This step verifies the removal of CO₂ from the full value chain of the project. DNV will validate that the finalised methodology satisfies the requirements of ISO 14064-2 and is verifiable. DNV does this by examining how the methodology will be applied to a specific CDR project. Once confirmed, DNV will issue a statement of validation for the methodology.

Once the methodology has been validated it will be possible to verify its application to specific CDR projects. For each CDR project, a verification framework will be established which will ensure that CO₂ removals are quantified in a manner compliant with the validated methodology. Elements of the value chain will be audited as appropriate at agreed intervals to determine compliance. This is done by reviewing project design documentation, site inspection and project interviews. With this evidence and any DNV concerns addressed, DNV can determine if the commitments in the project methodology have been fulfilled. DNV can then report on the following:

• Carbon removal has been reported accurately, thus avoiding any chance of double counting or inclusion of removals that cannot be supported by measured data.

• Carbon has been measured accurately and reflects the emissions removed after adjusting for emissions resulting from project construction, operation, and disposal in compliance with ISO 14064-2 Standards.

• Strict, transparent, and accountable monitoring procedures are in place to detect any involuntary release of CO2 and changes within the storage reservoir that may risk the permanence of CO₂ storage.

The CDR project should ensure that it remains in compliance with any applicable regulations or standards. This involves ongoing monitoring and reporting of carbon removals, as well as continued implementation of carbon removal activities to achieve further CO2 removal.

How does MRV help the market?

The carbon markets rely on the ability to trade carbon credits, which represent a reduction or removal of CO₂. MRV provides a framework for measuring and verifying these reductions. This transparency helps to build trust and confidence in carbon markets, which in turn encourages investment in carbon-related projects and technologies.

Many countries and regions have established carbon reduction targets or regulations, and MRV provides a means for projects to demonstrate compliance with these requirements. This can help to avoid reputational damage associated with non-compliance. MRV provides a foundation for effective carbon-related policies and markets, which can help drive CO₂ removals and accelerate the transition to a low-carbon economy. By providing a clear and consistent methodology for measuring, reporting, and verifying carbon-related activities, MRV helps to build confidence in carbon markets, encourage innovation, and promote compliance with carbon-related regulations and targets.

What are the key issues limiting MRV practices?

There are several key issues that can limit the effective implementation of MRV practices, including:

• There is currently no standardised framework for MRV, which can lead to inconsistent practices, thus making it difficult to compare different CDR projects and technologies.

• MRV requires political will and commitment at both the national and international levels. The regulatory environment is still developing, and there is currently a lack of clarity around the types of CDR projects and technologies that will be eligible for carbon credits or other incentives. This can create uncertainty for investors and project developers, which may discourage investment in CDR solutions.

• From a technical perspective, engineered CDR solutions involve complex technologies that can create technical challenges, in particular in relation to the storage site selection and performance monitoring. The conditions under which storage sites may perform vary considerably depending upon the jurisdiction in which the storage site falls and the type of storage site (cap rock, mineralisation etc)

Addressing these challenges will be essential for building a robust and reliable CDR market, which can help to drive emissions reductions and promote a more sustainable economy.

How can a project complete the MRV process?

The starting point should always be the methodology. Getting this right is paramount as it sets out the process for the whole project. The rest of the processes are outlined in the methodology.