Carbon Credits: How Are They Generated and Verified in Sustainable Projects?
a. Approach: From Forest Planting to Clean Energy – The Path of Carbon Credits
Carbon credits are units that represent one metric ton of carbon dioxide (CO₂) avoided, captured before entering, or removed from the atmosphere through certified projects, expressed in tCO₂e. These projects can be proposed and developed by any legally registered company in Portugal and its regulatory agencies. Their creation is based on concrete initiatives that contribute to decarbonization or the capture, use, or sequestration of CO₂ — either before or after it reaches the atmosphere — such as carbon sequestration in forests, the implementation of renewable energy technologies, or carbon capture and storage from industrial processes.
To be eligible to generate carbon credits, a project must meet three essential conditions:
Measurement: Emissions reductions or carbon captured must be quantified using scientifically recognized methodologies. Certified organizations perform this measurement.
For example, based on existing scientific research, it is known how many tCO₂e a eucalyptus forest with a planting density of 1,500 to 2,000 trees/ha can sequester per year. One hectare of Eucalyptus globulus (the most cultivated species in Portugal) can sequester between 6 to 12 tons of CO₂e annually, during its 8–12-year growth cycle. A project with 100 hectares would therefore generate between 600 and 1,200 tCO₂e/year. After 12 years, carbon sequestration slows but continues. If harvested for paper production, the sequestered CO₂ in the biomass enters a new chain, with its own rules and measurement systems.
Additionality: This principle means that the emissions reduction would not have occurred without the project. The credit is only valid if the action is directly responsible for the impact.
Independent Verification: An independent and certified third party must audit the results and confirm the project meets all the required standards. No business ties may exist between the verifier and the project developer beyond the scope of the certification process.
Thus, a carbon credit is only valid if it is measurable, verifiable, additional, and unique, avoiding double counting, speculation, or fraud.
b. Focus on Portugal: Innovation in the National Carbon Market
In 2025, Portugal took another important step toward building a robust and transparent carbon market by launching its first national methodology dedicated specifically to carbon sequestration through afforestation. This methodology was subject to public consultation, marking a milestone for the development of climate-impactful forestry projects.
The Portuguese Environment Agency (APA) played a central role in designing and supervising this initiative, in collaboration with experts and industry stakeholders. The Technical Monitoring Committee (CTA) ensured critical review and validation of the proposed methodologies, safeguarding strict scientific standards and ensuring the methodologies contribute to real climate mitigation goals.
Portugal now has a solid legal framework for the carbon credit sector, which will continue to evolve in the coming years. This institutional effort reflects the country’s commitment to aligning environmental policy with innovative economic tools, giving sustainable projects financial recognition for their climate value and helping accelerate the green transition.
To know more about the Carbon Market, register here in our free webinar on the 10th of september.