Additionality and Insets: Asking the Right Questions to Create Confidence

We’ve previously established the difference between insetting and offsetting carbon markets and Athian stands behind the value of insetting programs to provide scalable progress for emissions reduction efforts in livestock production. Despite the notable differences between the two approaches to carbon marketplaces, concern about the governance of concepts like additionality may be preventing food companies from fully leveraging insetting to help meet their GHG reduction goals. 

It is important to first establish the definition of additionality. In the white paper, Additionality Considerations for Food Companies, additionality is described as a fundamental criteria for offsetting programs that “seeks to address whether GHG reducing activities would have occurred without a project.” On the other hand, the paper notes global authorities, like the GHG Protocol, have not required additionality testing procedures for insetting projects. Instead, companies are largely responsible for determining their own governance and rigor. 

“Additionality requirements are not, and should not be, the same for insetting and offsetting programs,” said Kendra Tolley, chief product officer for Athian. “This stems from differences in the depth of existing relationships and trust between entities in each program scenario.”

In offset markets, companies are working with stakeholders with whom they would not otherwise have a business relationship. Offset purchasers are motivated by a need to rely on an external party or project to counter their own environmental impact. In inset markets, many of the stakeholders already are partners because they contribute to the same supply chain. Inset purchasers are motivated by a desire to see continuous improvement across the supply chain. In this case, trust already exists and the relationship is more than transactional. 

That said, emissions reduction progress is still the objective and inset programs must be designed to incentivize new or continued efforts to improve the environmental impact of operations. 

For example, in livestock production, innovations like feed additives may have a positive impact on the emissions from animals that are fed the product. These emission reductions could be a secondary benefit of the feed additive from the livestock producer’s perspective, but a primary benefit for a downstream stakeholder, like a food company. As a producer considers input costs and overall management of their operation, they might choose not to feed or to reduce the time on feed for the additive, at which point the emissions reducing benefits cease or decrease. 

“Livestock producers need to be incentivized to not only try and do new things on the farm or ranch to reduce emissions, but they also need to be rewarded for continuing to do the things that are having a positive impact,” Tolley said. “Funding for new and ongoing practices is both a critical factor in their decision-making and a powerful benefit of an inset market.”

This reframes the questions food companies should be asking about the impact of a specific insetting program from one focused solely on additionality to the following:

• Did the program cause a producer to do something that is new (i.e., additionality in the traditional sense) or do something they wouldn’t have done continuously in the absence of a carbon-market incentive (i.e., unique to insetting)?
• Do we have data to validate that an on-farm practice is being implemented – continuously – and with a positive impact on emissions?
• Can we accurately calculate the emission-reducing impact?

The second white paper developed by The Climate Source with support from Athian, Addressing Additionality in Inset Programs, explores the two separate emissions accounting systems food companies typically use to measure reductions: Inventory Accounting and Project-Based Accounting. 

Inventory Accounting refers to how a company measures its entire emissions footprint and reduction claims are based on prior year emissions minus a baseline year emissions value. Project-Based Accounting refers to how a company measures the emissions reduction impact of specific projects and interventions against a project baseline established using primary data. Here, claims are based on the quantified impact of projects.

These two accounting systems are often managed separately, increasing the inherent risk for double-counting or concerns about additionality for food companies. The nature of this reality emphasizes the importance of baseline methodology at the project-level and the need for industry-wide standardization of project methods and protocols. 

“The Athian Governance Framework was designed to ensure that approved protocols represent interventions that would not be used, or would not be continuously used, in the absence of the financial incentive provided by the Athian marketplace,” Tolley said. “We also require causality to be demonstrated, meaning that participants must demonstrate that an investment (or equivalent action) of a company or group of companies acting collectively is what caused the intervention to happen or continue to happen." 

The Athian Scientific Advisory Board vets all protocols (or practices) before they are approved for the Athian platform, including the scientific research validating the effectiveness and reductions impact of the practices. Additionally, participating producer data is continuously monitored and verified against ISO 14064-2 Standards by accredited Validation and Verification Bodies.

“The Athian platform delivers science-backed Scope 3 emissions reductions at scale,” said Tolley. “In the absence of our platform, primary data regarding emissions for the livestock industry is scarce. And, without high quality, primary data, the monitoring and verification of emission reductions is next to impossible. Athian provides connected, repeatable and credible processes for Scope 3 reductions in the animal protein industry.”

Contact us to learn more about Athian, or how we can support your company’s Scope 3 emission reduction efforts. 

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