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A practical, plain-English glossary of carbon market, emissions accounting, and climate reporting terms. This glossary is maintained by TruCarbon to help organizations navigate climate regulations and voluntary carbon markets.
Emissions and Accounting
Scope 1 emissions
Direct emissions from sources owned or controlled by the organization — fuel combustion on-site, company-owned vehicles, manufacturing processes, and fugitive emissions.
Scope 2 emissions
Indirect emissions from purchased electricity, steam, heat, and cooling consumed by the organization. Two accounting methods: location-based (grid average) and market-based (contractual instruments).
Scope 3 emissions
All other indirect emissions across the value chain, split into 15 categories. Typically the largest portion of a company’s footprint and the hardest to measure. Covers supply chain, transportation, employee commuting, business travel, end-use of sold products, and waste disposal.
GHG Protocol
The Greenhouse Gas Protocol — the global standard for measuring and reporting emissions, developed by WRI and WBCSD. Foundation for most corporate emissions accounting.
CO2-equivalent (CO2e)
A standardized unit that converts all greenhouse gases into the equivalent amount of carbon dioxide based on global warming potential (GWP). Allows different gases (methane, N2O, fluorinated gases) to be compared on one scale.
Emission factor
A coefficient that converts activity data (fuel used, kWh consumed, distance traveled) into a CO2e value. Published by bodies like IPCC, EPA, DEFRA, and national registries.
GHG inventory
A structured record of all greenhouse gases emitted by an organization over a reporting period, organized by scope and source. The foundation for target-setting and disclosure.
Carbon Markets and Credits
Carbon credit
A tradable certificate representing one metric ton of CO2e either reduced, avoided, or removed from the atmosphere. Issued by a carbon registry after project validation and third-party verification.
Carbon offset
The act of using a carbon credit to compensate for emissions elsewhere. Offsetting is a step within a broader decarbonization strategy, not a substitute for emissions reductions.
VCU (Verified Carbon Unit)
The credit unit issued by the Verra VCS Program. Each VCU represents one tonne of CO2e reduction or removal.
CORC (CO2 Removal Certificate)
The credit unit issued by Puro.earth for engineered and nature-based carbon removals (biochar, enhanced rock weathering, direct air capture).
Additionality
The principle that a carbon project only generates credits for emissions reductions or removals that would not have occurred without the revenue from credit sales. A core integrity requirement.
Permanence
The durability of a carbon reduction or removal. Nature-based solutions (forests) face permanence risks from fire, pests, or land-use change. Tech-based removals (biochar, DAC storage) offer longer permanence.
Leakage
When a carbon project’s emissions reductions are offset by increased emissions outside the project boundary — e.g., protecting one forest while logging shifts to another area. Projects must account for and deduct leakage.
Carbon Project Standards
Verra (VCS)
The world’s most widely used voluntary carbon standard. Administers the Verified Carbon Standard (VCS) Program and issues VCUs.
Gold Standard
A voluntary carbon standard with stricter social and environmental co-benefit requirements than VCS. Project activities must demonstrate sustainable development outcomes aligned with the SDGs.
Puro.earth
A registry focused exclusively on engineered carbon removals with durable storage. Issues CORCs for biochar, bio-oil, terrestrial storage, and other removal methods.
IDXCarbon
Indonesia’s official carbon exchange, launched in 2023 by the Indonesia Stock Exchange. Serves as the primary domestic platform for carbon credit trading in Indonesia.
PDD (Project Design Document)
The foundational document for a carbon project that describes the baseline, project activity, monitoring plan, emission reductions calculation, and stakeholder engagement. Submitted to the registry for validation.
VVB (Validation and Verification Body)
An accredited third-party auditor that independently assesses carbon project design (validation) and actual performance (verification). Examples include DNV, TÜV, LVV, KBS.
MRV (Monitoring, Reporting, and Verification)
The process of measuring a carbon project’s performance, reporting the data, and having it independently verified. Digital MRV (dMRV) uses remote sensing, field apps, and automation to reduce cost and error.
REDD+
Reducing Emissions from Deforestation and Forest Degradation, plus conservation and enhancement of forest carbon stocks. UN framework for forest-based carbon projects.
ARR
Afforestation, Reforestation, and Revegetation. Carbon project type that establishes new forest cover or restores degraded areas.
Climate Policy and Reporting
Net Zero
The state where an organization’s value-chain emissions are reduced as far as possible (typically aligned with a 1.5°C pathway) and residual emissions are neutralized through permanent removals. More ambitious than carbon neutral.
Carbon Neutral
Balancing emissions with an equivalent amount of offsets or reductions. Does not require the same depth of reduction as net zero.
SBTi (Science Based Targets initiative)
A global framework that validates corporate emission reduction targets as aligned with climate science — the level of decarbonization required to limit warming to 1.5°C.
TCFD
Task Force on Climate-related Financial Disclosures. Framework for reporting climate risks and opportunities in financial filings. Now consolidated under the IFRS Foundation.
IFRS S2
IFRS Sustainability Disclosure Standard on climate-related disclosures. Mandatory in many jurisdictions. Builds on TCFD.
GRI 305
The Global Reporting Initiative standard on emissions disclosures. TruCarbon is the Official Software and Tools Partner for GRI 305. Covers direct, indirect, and other emissions plus intensity metrics and reduction initiatives.
CDP
A global disclosure platform (formerly Carbon Disclosure Project) where companies report environmental data to investors and customers. Scored A to D.
Indonesia Climate Framework
NDC (Nationally Determined Contribution)
Each country’s climate commitment under the Paris Agreement — emission reduction targets, mitigation measures, and adaptation plans.
SNDC (Second NDC)
Indonesia’s Second Nationally Determined Contribution, submitted to the UNFCCC in October 2025. Covers emission reduction targets for 2031 to 2035, replacing the Enhanced NDC (ENDC) which covered 2026 to 2030.
NEK (Nilai Ekonomi Karbon)
Indonesia’s Carbon Economic Value framework — the legal and regulatory basis for carbon pricing and trading in Indonesia. Formalized under Perpres 98/2021 and strengthened by Perpres 110/2025.
Perpres 110/2025
Presidential Regulation No. 110 of 2025 on Nilai Ekonomi Karbon and National Greenhouse Gas Emission Control, signed October 10, 2025. Replaces Perpres 98/2021 and overhauls Indonesia’s carbon governance.
MRA (Mutual Recognition Agreement)
Bilateral agreements that allow Indonesian carbon projects to be recognized under international standards. Indonesia has signed MRAs with Verra, Gold Standard, Global Carbon Council, Plan Vivo, and JCM.
JCM (Joint Crediting Mechanism)
A bilateral crediting mechanism between Japan and partner countries (including Indonesia) under Article 6.2 of the Paris Agreement.
Article 6.2
The Paris Agreement provision that allows countries to cooperate on emission reductions through Internationally Transferred Mitigation Outcomes (ITMOs), enabling cross-border carbon credit trading.
