France Launches Charter For High-Integrity Carbon Use

In a significant move towards an enhanced global carbon market, the government of France has launched the "Charter for Paris-aligned and High Integrity Use of Carbon Credits." French Minister of Ecological Transition, Biodiversity, Forests, the Sea and Fisheries Agnès Pannier-Runacher announced the new charter, which calls upon businesses to pledge to have responsible and transparent use of carbon credits within their climate action strategies. This move seeks to establish a more reliable and transparent global carbon market that enhances global action against climate change.

The introduction of the charter comes hot on the heels of a string of global developments seeking to improve the credibility of carbon markets. Most significantly, during the November 2024 COP29 UN Climate Conference, nations agreed on Article 6.4 of the Paris Agreement. This historical agreement set stringent standards for developing, validating, verifying, and issuing high-quality carbon credits. The mechanism is intended to establish a global standard for carbon markets by providing the highest possible levels of integrity, robust governance frameworks, transparent methodologies, and sound risk management practices. Article 6.4 also contains provisions for systematically channelling funds into adaptation projects, especially for least developed countries and small island developing states (SIDS), which are the most vulnerable to the impacts of climate change.

The charter of the French government takes this as a basis by providing clear expectations for firms that want to employ carbon credits in order to meet their climate objectives. It emphasizes two key areas: ensuring that carbon credits are used appropriately, and guaranteeing the integrity of the credits themselves. Central to the charter is a strong “decarbonization first” commitment. Under this principle, companies must prioritize reducing their own emissions before turning to carbon credits. Carbon offsetting can only be done by companies that have already outlined a clear Net Zero trajectory and have put in place targets that have been checked by an independent body as aligned with the Paris Agreement. Businesses are also required to report in detail across all three scopes of emissions—direct emissions, indirect emissions from purchased energy, and all other indirect emissions throughout the value chain. They also need to submit a time-bound, detailed transition plan to show how they are progressing.

The charter specifically says that carbon credits are only to be utilized as a complement to actual emissions reductions and not as a substitute. Firms committing to the charter have to employ solely those carbon credits that are either compatible with the Paris Agreement's Article 6.4 mechanism or certified through the Integrity Council for Voluntary Carbon Markets' (ICVCM) Core Carbon Principles. These principles aim to ensure that the credits signify actual, incremental, and enduring emissions reductions or removals, thereby building confidence in the carbon market.

17 firms had signed the pledge by the time of the announcement of the charter, indicating their commitment to these standards. Early signatories include large brands like Schneider Electric, Capgemini, Beko, and FDJ United. Their involvement is viewed as a welcome indication that the corporate world is prepared to participate in the ethical usage of carbon credits and contribute to the establishment of high-quality carbon projects, especially in developing nations where funding is acutely required.

Minister Pannier-Runacher highlighted the imperative for global cooperation to cope with the climate emergency. She emphasized the key role companies have to play by funding effective carbon projects in at-risk areas, thus helping build a credible, inclusive, and economically efficient carbon market. Calling on more firms to come aboard, she stated, "Confronted with the climate crisis, global cooperation is more urgent than ever. To lower greenhouse gas emissions worldwide, we need to deploy all the available levers.". Companies also have an important role to play in this dynamic: by investing in high-impact projects in developing countries, they help build a credible, fair, and economically efficient carbon market that complements their own decarbonization efforts. I repeat my appeal to them: become engaged!

With this charter's launch, France is taking a leadership role in making sure carbon markets can live up to their potential as a powerful means in the global battle against climate change. As more businesses move towards these high-quality principles, the integrity and value of carbon credits will gain further strength, giving rise to a stronger and fairer route to realizing global Net Zero ambitions.