Technical Explainer: Ozone-Depleting Substances Carbon Credits

The document analyzes ODS destruction projects, which provide high-impact carbon credits by permanently eliminating potent greenhouse gases like CFCs. While these projects are considered highly additional and have high retirement rates, they face scaling challenges due to a lack of destruction facilities in developing countries and complex transboundary regulations. Key quality risks involve the monitoring, reporting, and verification (MRV) of the chain of custody and baseline leakage assumptions, though these are generally well-mitigated by existing methodologies.

• ODS destruction projects are characterized by high additionality and impact because they incentivize the permanent disposal of potent greenhouse gases that are often vented illegally or leak from equipment, activities that current regulations do not adequately address.
• The voluntary carbon market (VCM) for ODS credits is well-established, with nearly 7 million credits issued across six methodologies from the Climate Action Reserve (CAR), American Carbon Registry (ACR), and Verified Carbon Standard (VCS). These credits exhibit a retirement rate of 73.5%, the highest among project types with over 1 million credits.
• The United States dominates the VCM ODS credit supply, accounting for 74.6% of issued credits, followed by Thailand at 16%. However, compliance markets in California and Washington have generated over 27 million ODS credits since 2008, significantly outpacing the VCM.
• Scaling ODS destruction is hindered by four primary barriers: a concentration of TEAP-approved destruction facilities in developed countries, cross-border transport restrictions under the Basel Convention, a lack of technical recovery capacity in Article 5 countries, and the high cost and technical difficulty of extracting ODSs from insulation foams.
• The primary quality risk for ODS credits is the complexity of monitoring, reporting, and verification (MRV) regarding the chain of custody, particularly when gases are sourced from multiple locations or overseas. This is mitigated by strict methodology requirements and the use of digital MRV and secure tracking.
• Baseline assumptions regarding ODS leakage rates present a common but low-concern risk. To prevent overcrediting, active methodologies employ conservative assumptions, such as assuming gradual leakage in developed countries even where illegal venting is common.
• There is a socio-environmental risk that ODS projects exacerbate inequities because most projects source gases from Article 5 countries but transport them to developed nations for destruction, often without compensating the country of origin or building local capacity.

APA

RMI (2025). Technical Explainer: Ozone-Depleting Substances Carbon Credits. https://rmi.org/resources/technical-explainer-ozone-depleting-substances-carbon-credits/

Chicago

RMI. Technical Explainer: Ozone-Depleting Substances Carbon Credits. 2025. https://rmi.org/resources/technical-explainer-ozone-depleting-substances-carbon-credits/.

Wikipedia

{{cite report |author=RMI |title=Technical Explainer: Ozone-Depleting Substances Carbon Credits |date=30 July 2025 |url=https://rmi.org/resources/technical-explainer-ozone-depleting-substances-carbon-credits/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025technical, author = {{RMI}}, title = {{Technical Explainer: Ozone-Depleting Substances Carbon Credits}}, institution = {RMI}, year = {2025}, month = jul, url = {https://rmi.org/resources/technical-explainer-ozone-depleting-substances-carbon-credits/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }