Verra launches new method to turn early coal plant closures into carbon credits

New carbon credit framework boosts early coal plant retirement in Southeast Asia. (Photo: iStock)

Southeast Asian countries are expected to accelerate the early retirement of coal-fired power plants. On May 6, Verra, an international carbon credit verification body, announced a new certification methodology that allows emissions reductions from early coal plant shutdowns to be converted into carbon credits.

These credits can be sold to compensate stakeholders for financial losses, injecting new funding momentum into coal phaseout initiatives.

Coal plant losses covered through carbon credits trading

According to Verra’s statement, projects using the “VM0052 Methodology for Accelerating Coal Power Plant Retirement through Just Transition” must be paired with new renewable energy projects. This is to ensure the production of high-quality “Transition Credits” while upholding principles of a just energy transition—supporting workers and communities affected by plant closures with social and economic measures.