Fairtrade Carbon Credits are the result of a strategic partnership between Gold Standard and Fairtrade International to support smallholder farmers in their fight against climate change. By using minimum pricing principles to ensure a fair return for producers as are used in Fairtrade commodities, Gold Standard and Fairtrade are working to ensure climate finance benefits those who need it most.
Fairtrade Carbon Credits are, at their essence, Gold Standard verified emissions reductions (VERs) that have been generated by producer organisations that meet Fairtrade eligibility criteria and achieve a Fairtrade minimum price and premium in the market. Additional details include:
- Project ownership limited to Fairtrade eligibility criteria. Projects eligible for the Fairtrade add-on standard can only be initiated by producer organisations, who are by default considered the project developer and have rights to the carbon credits. Many times, producer organizations will enlist the support of a Gold Standard project developer, who in these cases is called the Project Facilitator, as they provide technical expertise and support with project design documentation.
- Minimum pricing. The Fairtrade Minimum Price ensures that project costs are covered and that income is returned to the producer organization. The Minimum Price is calculated according to the project type and related costs and is the starting point for price negotiations between the producer and/or the Facilitator with the buyer. A Fairtrade Premium is charged on top of the Minimum Price. It is important to note that if the Fairtrade minimum price plus premium is not secured, these are still considered Gold Standard certified credits and can be sold as such.