Enhancing Project Integrity: MicroEnergy Credits’ Engagement with BeZero on Mongolia Program Rating

7th May 2024

As the voluntary carbon market landscape continues to evolve, the most important conversation continues to be around integrity, of carbon projects as well as carbon claims made by corporates. The emergence of rating agencies in the market is a welcome step towards enhancing the credibility of carbon programs and trust within the market. MicroEnergy Credits shares this vision of the rating agencies and is dedicated to upholding the highest standards of integrity and transparency in our carbon program, and our active collaboration with BeZero Carbon on the rating of our Mongolia program exemplifies this commitment.

Let’s delve deeper into the nuances and different aspects of BeZero’s rating process as it pertains to our Mongolia program, as understood through active engagement between MEC and BeZero:

  1. Pioneering Efforts Acknowledged: BeZero recognized our Mongolia program as being the first of its kind in an area where efficient heating furnace options were previously unavailable. This acknowledgment highlights the innovative nature of our program.
  2. High Ranking VPAs: BeZero noted that the VPAs in MEC’s Mongolia program rank impressively within the sector of household device projects. At the time of assessment[i], BeZero recognised that MEC Mongolia projects face a lesser risk of over-crediting than 80% of projects assessed in the household devices category and a lesser risk of non-permanence than 78% of household devices projects assessed. BeZero has stated that within all rated household devices projects, the MEC projects[ii], with their BB rating, sit at the higher end of the distribution.

Rating Distribution of Rated Household Devices Projects by BeZero

  1. Effective Risk Management: BeZero recognized our approach to managing over-crediting risks through seasonal Kitchen Performance Tests (KPTs), demonstrating our commitment to ensuring that our projects align with robust monitoring practices, in line with sector science. MEC carries out Kitchen Performance Tests in both dry and wet seasons to establish any difference in use. The conservative value between the wood used in any of these seasons is used for calculating the emission reductions.
  2. Transparent Additionality: MEC has provided comprehensive information on program additionality, publicly available on its website, addressing concerns and prompting updates to the rating brief. Our detailed investment analysis has been instrumental in resolving ambiguities and enhancing transparency.
  3. Ongoing Work by BeZero on the Vintage Split Model: Currently, BeZero does not follow a vintage split model, and evaluates projects across all vintages in one sweep.This means that a monitoring report from 2013is bringing down the rating of a vintage 2019 credit, even though there have been many monitoring reports in the interim that showed the issue had been resolved.  There is a monitoring report from 2013 from the beginning of the program that showed that end users were loading the furnaces improperly. MEC solved the problem in the same year with an end-user campaign (made possible with the help of carbon finance). Subsequent auditsshowed good practices. BeZero has acknowledged this, although the rating does not reflect this improvement. BeZero's near-future plans to assess projects by vintage are expected to provide a more accurate representation of our program's evolution.
  4. Addressing Additionality Concerns: BeZero acknowledged that the MEC projects are not common practice and are indeed additional. However, BeZero did not give the project the highest rating for additionality because the project used a subsidy provided by government actors as a separate co-financing.  BeZero alleges that the subsidy could have caused the efficient furnaces to later become common practice. BeZero acknowledged that co-financing is a common best practice in the development sector. Not allowing the subsidy would have meant less climate action, as at-risk communities need the added impetus of co-financing and subsidies to adopt new clean energy technologies. Moreover, subsidies for a project do not make the generated verified emission reductions from the project any less valuable. We hope that BeZero will adopt a different approach in the future to accepting cofinancing without decreasing a project rating.
  5. Commitment to Continuous Improvement: BeZero has acknowledged improvements observed in the second crediting period of our program, due to MEC's enhanced monitoring protocols.

At MEC, we remain steadfast in our commitment to rigorously upholding the integrity of our carbon programs. While the rating for our Mongolia project remains unchanged for now, engagement with BeZero and efforts to address the current rating are ongoing. The process has provided invaluable insights that will continue to inform our future endeavours. MEC is committed to actively considering, and where possible, following best practice developments in sector science, for instance, the Guidance for Developers by the Berkeley Carbon Trading Project to ensure the highest project implementation and assessment standards in all its programs.

[i] 9th August 2023

[ii] (except GS2688) which was given a lower rating because a single monitoring report out of several annual reports - the first monitoring report from 2012 - is no longer available, having been deleted by MEC’s carbon consultant.

MEC Mongolia Project FAQs

Q: What is the MCC Impact report and is it more accurate than the licensed DOE verification report from 2012
The MCC provided a user subsidy for a portion of the households included in the program. This support enabled the program to scale up more quickly than it otherwise would have. It does not impact the additionality of the program, because MCC support would never have existed if the carbon program had not happened. The carbon program brought together the key project operator (XacBank Microfinance) that had the local the presence and institutional capability, with a projected source of funding which enabled market research, technical assistance, business plan development, investment analysis and a successful pilot demonstration all of which were needed to attract additional partners and support.

The MCC Impact report was a snapshot of a small sample of houses in 2012. The impact report did find that the project had successfully disseminated the products, that households were using them and there was a high degree of customer satisfaction. It also found that there was a high level of improper loading of the stoves. 

These challenges were well known by the project proponents at the time, and there were many interventions implemented to turn them around. The remediation activities included media campaigns and customer awareness campaigns carried out by field agents in the local communities.

The MCC report findings are contradicted by the DOE field visit report which covered a much larger sample. Further the DOE followed standard methods for establishing carbon emission impact. The DOE also was a licensed auditor as opposed to the MCC impact report team. 

Studies from the time showed air pollution in Ulaanbaatar decreased after the project began. This decline is consistent with an effective intervention. Top experts from the World Bank and similar agencies attribute the reduction in air pollution to this project.

The proper way to view the MCC report in context was that it accurately documented a project challenge that came up, and this challenge was addressed by verifiable customer education activities and the subsequent high level of emission reductions are tracked by both the licensed DOE verification field studies and monitored air pollution reports by third party agencies.


Q: Can you provide evidence of the Media campaigns that addressed the 2012 customer issues related to proper loading of the efficient stoves?
Below is a snapshot of the media campaign activities held in 2012 to raise public awareness of the stoves including proper loading techniques.

Click here to view the Awareness Raising initiatives and activities.

Q: How is one household impacted economically when they purchase a clean energy product?
This is an example from the first stoves disseminated by the pilot in 2009. The amounts are given in Tugrik. $114 total cost, $6 monthly payment, $60 monthly fuel spend before, $23/month savings.


Q: What were the first activities of the pilot program?
Here are some slides from our early work in 2009.   These included market research, product identification, business planning, marketing and outreach, agent model development, microfinance loan development, institutional capacity building and carbon funding investment analysis. Looking back, I am overwhelmed because the project has reached over 160,000 households, far beyond our initial targets.


Q: Did the project do an investment analysis which shows additionality of the carbon finance?
Yes. The key project proponent, XacBank Microfinance worked with MEC to develop a business plan which showed the impact of carbon finance. Launching a clean energy program required funding outside of the normal business operations of a microfinance institution.  The following slide from a management presentation in August 2009 gives a historical snapshot into the management discussion at the time. The slide shows that without the carbon contribution, the expenses of the program would have been greater than the revenues (from loan interest) the MFI would have earned if it had tried to do the project on its own making the project economically unviable.

Q: What is the income level of the participants in the MEC Mongolia project?
The program focused exclusively on low-income households living in the ger districts. The ger districts are a peri-urban area. All ger district inhabitants use coal as their source of fuel. The ger district is not connected to district heating which middle class houses benefit from, so they burn coal for heating. The project did not cover any rural areas that used wood for fuel. Ger district dwellers are often pensioners on a fixed income. In some cases, winter fuel expenditure to stay warm consumed 90% of their income using baseline furnace technologies. Ger district inhabitants usually live in Gers (yurts) or small houses. The ger district has access to very limited utilities, for example electric lines with low maximum current allowance. All participants in the program belong to these low socio-economic strata, because the efficient coal furnace that was disseminated is not useful to anyone in a middle class living situation because those households access district heating for heat.

Q:  Was there a gap in carbon funding and does that prove that the carbon funding is not needed for this project?
Yes, there was a 3-year gap between project inception and the first carbon issuance and a subsequent three-year gap in carbon cash flow due to the crash of the carbon markets in 2013.  These gaps were managed by financing to provide a continuous level of activity to support the clean energy program.  The project has continuously relied on carbon funding to carry out key project activities. It has used a combination of carbon investment, CDM project revenues and Voluntary Gold Standard project revenues.

The project initially used advance investment that was raised by MEC based on projected revenues from a carbon offtake agreement with EcoSecurities. This covered many early-stage activities between 2009-2012.  Once the clean energy products had been disseminated and operational the projects issued carbon credits and received carbon revenue as projected in the initial business case. The first sale of credits from the project was in 2011. The project issued significantly in 2012. The project initially received funding from EcoSecurities offtake between 2010-2012. Then the project was certified by the Gold Standard and issued in 2012 receiving carbon funding from Microsoft. However, after 2012 the voluntary market collapsed. There was a gap in revenue from 2013-2015. This gap was covered by financing. In 2014 the project won an RFP by the Swedish Energy Agency and issued credits under the CDM, receiving revenue from 2016 to 2021. Due to the non-completion of Article 6, SEA could no longer buy carbon credits. Therefore in 2022 the project started working again in the voluntary markets and has received revenue in 2023.

The project has also been able to attract cofinancing in the form of grants or in kind support. These have always been from agencies that required meticulously tracking to avoid redundant activities. This cofinancing has also helped cover gaps in carbon funding which were caused by market dynamics.

Q:  What was the role of carbon funding in the project? 
The project has spanned over 15 years and has attracted cofinancing from leading development agencies and government sponsors. The cofinancing greatly amplified the impact of the carbon funding. This cofinancing does not reduce the projects additionality, because none of these agencies would have been able to do the project without the participation carbon funding. XacBank is the local microfinance institution who has a long term relationship with the ger district households and who engaged all of the field agents, deployed the distribution centers, provided loans and provided monitoring and aftersales service.  XacBank became interested in doing a project to help its members after hearing about MEC, a newly formed social enterprise focused on helping microfinance institutions connect to the carbon markets which they lend for clean energy.

Below is an overview of the activities that the project conducted, and the role of carbon funding and cofinancing. 

Q: How did carbon finance overcome the barriers to clean energy?

Click here to view the Product BrochureClick here to view the Training Photos



Q: What financing was raised to cover gaps in carbon funding?
MEC has raised investment over the years to support its programs when there were gaps in carbon revenue.

2008: MEC won the Global Social Venture Business Plan Competition

2009: $150K PRI facility from Deutsche Bank Foundation

2010: $300K Angel Investment

2012: $600K Series A

2014: $1.3 M Series B

2016: $500K Debt facility from MCE

MicroEnergy Credits - All About The Mongolia Project


MicroEnergy Credits partnered with XacBank to leverage carbon microfinance to transform the energy landscape of Ulaanbaatar in Mongolia.

MEC and XacBank collaborated to introduce innovative products such as efficient furnaces and home insulation through a microfinance program. Despite significant obstacles, the program has successfully transformed lives in Mongolia. Below are interesting and relevant details about the program.

Read more

Project Additionality to Bolster Integrity of Carbon Credits: Common Practice Analysis in Mongolia Projects


The concept of additionality is a critical component in bolstering confidence in carbon offsets and their integrity. MicroEnergy Credits follows a robust process to ensure that all its carbon projects are strictly additional and have high social impact.

According to the Guide to Using Carbon Offsets, when people talk about the "quality or integrity" of an offset, they are referring to their level of confidence that the use the credit will meet their emission reduction needs. The concept of additionality is a critical component in bolstering confidence in carbon offsets and their integrity. “Additionality”, in the context of crediting mechanisms, refers to emission reductions or removals from a mitigation activity are considered additional if the mitigation activity would not have occurred without the additional incentive provided by the carbon credits. In essence, an additional project means that the project would only be feasible if it received carbon funding from the market-based mechanism. To qualify as a genuine carbon offset, a project's reductions must be "additional" to what would have happened if the project did not exist. Most projects registered against globally accepted greenhouse gas (GHG) project standards adhere to the guidelines for assessment and demonstration of additionality enacted by the respective GHG crediting programs. MEC uses CDM’s ‘Methodological Tool 01: Tool for the demonstration and assessment of additionality’, which is widely used for development of carbon projects.

Common Practice Analysis
The outcome of common practice analysis as per UNFCCC ‘Methodological Tool 01: Tool for the demonstration and assessment of additionality’ and ‘EB 69 Report Annex 8: Guidelines to Common Practice’ proves that MEC’s carbon program is not a common practice in the applicable geographical area.

The calculated applicable capacity or output range is +/-50% of the total design capacity or output of the proposed project activity as per the guidelines to common practices.

Applicable geographic area: MEC’s carbon program in Mongolia (GS2434 and GS11616) is targeted at the low income ger districts of Ulaanbaatar. Back in 2007-10, Ulaanbaatar was the most polluted city in the world during the winter with carbon emissions exceeded 1.2 million tCO2e per year per 100,000 households/Gers(1). Some households were spending 90% of their income buying coal to keep warm in -40°C temperatures. The smoke from burning coal had created the highest global levels of lung disease, heart disease and birth defects.

Measure of emission reduction activities: The proposed project activity reduces emission reduction by catalysing a switch in technology to a more energy efficient technology without changes in energy source. Our team worked with XacBank to identify two products which could address the needs of these communities. One was an efficient furnace that would burn cleanly, eliminating smoke in the home and reducing coal use by 50%. The second was an efficient home insulation, called a ger blanket, which could reduce fuel consumption by an added 50%.

Different technologies: Neither of the technologies were commercially available in Ulaanbaatar at the time of investment decision. Rather, some prototypes had been developed by universities and development research institutions including GIZ (then GTZ).  There were many challenges to overcome to introduce these products. This included developing local supply chains to produce the products which did not exist in the local economy, development of distribution networks, development of financing products, marketing and education in local communities, development of capacity within XacBank beyond traditional banking activities to work in green banking among many others.

Similar projects: At the onset of the space-heating stoves program by MEC, there were no such carbon projects in the applicable geographical area. Even today MEC’s Carbon Program in Mongolia continues to be the only program of activities under household energy efficiency project type under GS/ CDM. Thus, this project as proposed does not fall under “common practice” and is hence additional.

Use of Carbon Funding to overcome barriers to clean energy adoption
MEC uses carbon finance to overcome all of these obstacles, enabling microentrepreneurs to invest in clean energy products. First, MEC works with the microfinance institution to develop an attractive clean energy product offering to its microfinance client base, addressing each of the barriers such as education, price, finance, and supply and aftersales service. Second, MEC trains the microfinance institution to implement the clean energy-lending program. This includes business planning, capacity building, and implementation of marketing, education and supply chain processes. Third, MEC implements a robust and transparent carbon credit monitoring and tracking system to quantify and record the volume of carbon emission reductions created through the clean energy program. Finally, the carbon finance is used to expand and sustain the clean energy program through:

  1. Client education and marketing
  2. Internal training and capacity building
  3. On-lending funds to local SMEs producing the clean energy systems.
  4. Aftersales service and maintenance
  5. Lowering the interest or principal cost to the client.


MEC follows a robust process of ensuring that the project beneficiaries are only low income ger dwellers and households that otherwise cannot have access to the clean energy technologies due economic and financial barriers. The carbon funding is therefore used to overcome these barriers and therefore filling the viability gap in investment decisions. Thus, the carbon credits generated by MEC’s carbon programs have high socio-economic and SDG impacts.

[1] Calculated based on the MCC project reported 13.5 kg of coal consumption daily by traditional stoves in Ulaanbaatar in 2010. Annual coal consumption = 4.93 tonnes (13.5 kg x 365 days). Bituminous coal emission factor as per GHG Protocol is 2.44 tCO2e per tonne of coal. Therefore, annual CO2 emission per household is 12 tCO2e. For 100,000 households/ Gers, annual emission is 1.2 million tCO2e.

Project Additionality to Bolster Integrity of Carbon Credits and Overcome Socio-Economic Barriers


The concept of additionality is a critical component in bolstering confidence in carbon offsets and their integrity. MicroEnergy Credits follows a robust process to ensure that all its carbon projects are strictly additional and have high social impact.

According to the Guide to Using Carbon Offsets, when people talk about the "quality or integrity" of an offset, they are referring to their level of confidence that the use the credit will meet their emission reduction needs. The concept of additionality is a critical component in bolstering confidence in carbon offsets and their integrity. “Additionality”, in the context of crediting mechanisms, refers to emission reductions or removals from a mitigation activity are considered additional if the mitigation activity would not have occurred without the additional incentive provided by the carbon credits. In essence, an additional project means that the project would only be feasible if it received carbon funding from the market-based mechanism. To qualify as a genuine carbon offset, a project's reductions must be "additional" to what would have happened if the project did not exist. Most projects registered against globally accepted greenhouse gas (GHG) project standards adhere to the guidelines for assessment and demonstration of additionality enacted by the respective GHG crediting programs. MEC uses CDM’s ‘Methodological Tool 01: Tool for the demonstration and assessment of additionality’, which is widely used for development of carbon projects.

Socio-Economic Barrier Analysis for proof of Additionality of MEC’s Mongolia Carbon Program – GS2434 (1) & GS11616 (2)(3)

Barriers faced by low-income households to adopting clean energy technologies
MicroEnergy Credits (MEC) caters to over 8 million low-income households in remote, rural areas of India, Africa, and Mongolia. These households often face several challenges to accessing clean energy technologies. Under the PoA-DD submitted for the program GS2434 and GS11616, MEC develops projects with microfinance institutions and clean energy product suppliers to market, distribute, and finance clean energy products (4) to these microentrepreneurs and low income and households. Many microfinance clients suffer from energy poverty, affecting their health, their ability to educate their children, the gender balance of their household and their ability to save and accumulate wealth. Presently available clean and low carbon technologies can both improve their quality of life and reduce carbon emissions. Many microentrepreneurs and households lack access to clean energy technologies due to economic barriers and market inefficiencies including:

Micro Energy Credits addresses these barriers by working with microfinance institutions to market affordable, reliable clean energy products right to doorstep of the microentrepreneurs. Microfinance institutions are well positioned to provide clean energy to their clients because they offer:

Barriers faced by Microfinance institutions
Historically a very small percentage of microfinance institutions have offered microfinance for low-carbon technologies due to economic barriers. MEC has developed a program that enables Microfinance institutions to overcome these barriers. Obstacles that have prevented Microfinance institutions from starting clean energy product lines include:

  1. High cost of hiring additional staff.
  2. Expense of marketing and awareness building.
  3. Steep learning curve to understand products and technologies.
  4. Lack of partnerships with local suppliers and distributors.
  5. Reputational risk.
  6. Scarcity of on-lending funds.
  7. Difficulty developing financial products for consumptive loans.

Use of Carbon Funding to overcome barriers to clean energy adoption
MEC uses carbon finance to overcome all of the obstacles enabling microentrepreneurs to invest in clean energy products. First, MEC works with the microfinance institution to develop an attractive clean energy product offering to its microfinance client base, addressing each of the barriers such as education, price, finance, and supply and aftersales service. Second, MEC trains the microfinance institution to implement the clean energy-lending program. This includes business planning, capacity building, and implementation of marketing, education and supply chain processes. Third, MEC implements a robust and transparent carbon credit monitoring and tracking system to quantify and record the volume of carbon emission reductions created through the clean energy program. Finally, the carbon finance is used to expand and sustain the clean energy program through:

  1. Client education and marketing
  2. Internal training and capacity building
  3. On-lending funds to local SMEs producing the clean energy systems.
  4. Aftersales service and maintenance
  5. Lowering the interest or principal cost to the client.


MEC follows a robust process of ensuring that the project beneficiaries are only low-income ger dwellers and households in the city of Ulaanbaatar that otherwise cannot have access to the clean energy technologies due economic and financial barriers. The carbon funding is therefore used to overcome these barriers and therefore filling the viability gap in investment decisions. Thus, the carbon credits generated by MEC’s carbon programs have high socio-economic and SDG impacts.

[1] Under the program GS2434, MEC has registered and issued credits from six projects – GS 2435, GS2684, GS2685, GS2686, GS2687 & GS2688.

[2] CDM PoA 8142 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines – Mongolia” to GS PoA ID 11616 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines – Mongolia”

[3] The projects GS11617, GS11618 & GS11619 are under the PoA GS11616.

[4] Clean energy products (CEPs) included under GS2434 & GS11616 are efficient space heating stoves and insulating ger-blankets.

How We Ensure No Over-Crediting Of Emission Reductions In Our Mongolia Projects


MicroEnergy Credits employs stringent measures to ensure that there is no over crediting of emission reductions in its projects.

Over-crediting in the context of carbon reduction/avoidance projects refers to issuing higher emission reduction than what occurs. To address this risk, during the implementation of projects, MicroEnergy Credits (MEC) implements several measures including rigorous baseline assessments to identify households that genuinely need the clean energy devices and are likely to use them as intended. MEC partners also provide education and training to end-users on the proper use of the devices and follow-up with households to ensure that product is used as intended.

Over-crediting also occurs from poor sampling techniques adopted by project developers that does not appropriately represent the project’s target population while taking into consideration issues like heterogeneity of the monitored parameter for GHG quantification. Other factors contributing to over-crediting in the context of improved cookstove projects can be not accounting for stove stacking, non-conservative approaches to fuel-savings, not adjusting for seasonal effects. MEC’s projects have a much higher likelihood of under-crediting due to several conservative factors and measures that were used in calculation of the emission reductions claimed.

Robust sampling methods
MEC’s projects go beyond the requirements of the methodology and the CDM guidelines on sampling as follows:

MEC carries out sampling and monitoring at VPA level although the standards provide the option to carry out a cross-VPA monitoring. This means it monitored a higher sample size than required by the methodology. MEC’s Cookstove projects use a 90/10 confidence/precision while applying the sample size calculation and ascertaining the reliability of our results. The 90/10 confidence/precisions result in a higher sample size than the 90/30 allowed by some cookstove methodologies. Our projects stratify the boundary into clearly defined homogeneous areas and the monitoring for all parameters of interest is done for all of these areas.


No stove stacking
Stacking of stoves is robustly accounted for. For many of our projects, stove stacking with the baseline stove is simply not possible because baseline stoves are systematically taken and scrapped. There are established incentive measures for the end users to give up their baseline stoves. Further, by applying the homogeneity logic at a state/district level, we are able to capture any stove stacking with other stoves like LPG, electric etc. with a greater accuracy.

Conservative fuel-saving measure, seasonal effects
In our Mongolia projects, the fuel savings are measured using advanced regression model accounting not only for project fuel usage, but also external factors like temperature and wind speed prevailing during the winter months in Mongolia, for the CDM Programme. The approach used for calculating fuel savings is specific for individual districts/regions, different seasons (Autumn, Winter & Spring) and for different dwelling types, which increases the accuracy of ER calculations. This model was specifically requested by the CDM board during the project validation and is far more precise and advanced than other cookstove modelling methods.

The project has also conservatively not credited the four warmest months of the year, even though the stove is also used in those months. The Project conservatively does not rely on stove efficiency assumptions for ER calculations. For transparency, the project reports a stove efficiency which is from lab tests. However, the actual ER calculations use an even more robust method. Fuel is weighed in kitchen performance tests (KPTs). This is then combined with the external factors including temperature and windspeed and is specific for individual districts, and for each season.

The project exceeds other cookstove projects in measuring seasonal effects. To conservatively measure seasonal effects, the project carries out fuel saving calculation efforts for each of the three seasons during the heating season including autumn, winter, and spring. The regression analysis takes into consideration the air temperature and wind speed to estimate the baseline fuel consumption. This approach is more robust than carrying out KPTs once a year or biennially, as required by most cookstove methodologies.

The project follows the default figures provided by the IPCC, as required by the methodology. The figures used by MEC are conservative compared to the most recent default values. The parameters of interest usage rates, fuel savings etc. are monitored using kitchen performance tests on a sampling basis and VVB/DOE audited before undergoing another level of review at Gold Standard.

No Double Counting In Credit Transfer


The following CDM Program of Activities where MicroEnergy Credits is the Coordinating and Managing Entity (CME) have transitioned to Gold Standard or Verra:

  1. CDM PoA 9181 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines” transitioned to GS PoA ID 11450 titled titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines”

  2. CDM PoA 8142 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines – Mongolia” to GS PoA ID 11616 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines – Mongolia”

  3. CDM PoA 11341 titled “MicroEnergy Credits – Microfinance for Clean Energy Product Lines – Mongolia” to Verra projects as follows:
    • MICROENERGY CREDITS – MICROFINANCE FOR CLEAN ENERGY PRODUCT LINES – AFRICA – SOLAR LAMPS & EFFICIENT COOK STOVES – 10341 –CPA – 0005
    • MICROENERGY CREDITS – MICROFINANCE FOR CLEAN ENERGY PRODUCT LINES – AFRICA – SOLAR LAMPS & EFFICIENT COOK STOVES – 10341 –CPA – 0004
    • MICROENERGY CREDITS – MICROFINANCE FOR CLEAN ENERGY PRODUCT LINES – AFRICA – SOLAR LAMPS & EFFICIENT COOK STOVES – 10341 –CPA – 0003
    • MICROENERGY CREDITS – MICROFINANCE FOR CLEAN ENERGY PRODUCT LINES – AFRICA – SOLAR LAMPS & EFFICIENT COOK STOVES – 10341 –CPA – 0002
    • MICROENERGY CREDITS – MICROFINANCE FOR CLEAN ENERGY PRODUCT LINES – AFRICA – SOLAR LAMPS & EFFICIENT COOK STOVES – 10341 –CPA - 0001

No double counting in credit transfer is ensured because:

  1. There is no overlap between the CDM monitoring periods and GS/Verra monitoring periods for any of these PoA/projects.
  2. There are no issued CERs that have been converted to GS-VERs or VCUs.

Clarifications to BeZero Preliminary Rating

There have been several scandals recently about carbon projects which do not deliver the carbon emission reductions they promise. In response to this need for integrity in the carbon markets, ratings agencies such as BeZero have stepped in to provide a rating on individual carbon projects.  As a pioneer in best practice in the carbon markets, MicroEnergy Credits welcomes this evolution of the carbon markets. Indeed, MEC has long supported industry wide efforts to accurately support carbon emission reduction claims by working with the CDM standard, independent auditors, Gold Standard and Verra, providing technical assistance to other countries as a field example for World Bank delegations, undergoing due diligence as a runner up for the Ashden Awards and then working with the carbon and development professionals of the Swedish Energy Agency among others. MEC is confident that the work we do creates substantive carbon emission reductions which are accurately reported using the best available approaches. That said, we are also continuously learning and open to ideas in how we can improve our climate impact and how we report it. 

In late 2022, BeZero published a preliminary rating of the MEC Mongolia Microfinance for Clean Energy Project. MEC was made aware of the existence of BeZero and their rating of our project several months after it was published. When our team read the rating, we reached out to BeZero to understand their rationale. In January of 2023 they shared with us a document describing their rationale. Their initial ratings approach did not require visiting the program on ground or even speaking to the project developer or any field partner about the project before issuing the rating.  This led to 180 degrees misunderstanding of the carbon program. The BeZero rating rationale document made clear that they had many factual inaccuracies and misunderstandings which led to their preliminary rating. We started working collaboratively with BeZero in January 2023 to bring more accurate information into their analysis. In March 2023 MEC provided a detailed written clarification to their rationale document that corrected dozens of factual errors in the original rating. BeZero has subsequently placed their rating on “watch” while they review the information that MEC sent to them.  

MEC wants to be sure that the most accurate information is always available to stakeholders including ratings agencies, and buyers of carbon credits. To ensure this transparency, we’ve posted here a full overview of the project, corroborated by publicly available data. This overview includes the achievements the program has made in reducing carbon and improving lives in Mongolia.  It includes a detailed overview of the project’s approach to ensure integrity of the carbon credits including ensuring additionality, avoiding leakage, using conservative assumptions to avoid over crediting, rigorous monitoring, engagement of third-party auditors and course correcting challenges that emerged during monitoring.  This overview also provides insight into how the project champions development best practices by working with microfinance and maintaining a long-term presence to ensure longevity of the climate gains and social benefits through an evolving market, policy and technological environment. Finally, the overview includes a line-by-line correction of the factual inaccuracies which led to the preliminary BeZero rating. 

Read the full clarification here

Audited Documents Published Here

In line with our commitment to transparency and integrity, we are providing access to audited documents pertaining to our carbon programs here. This initiative aims to ensure that stakeholders have access to documentation in an easy-to-use way.

Mongolia Carbon Program
In 2008, MEC partnered with XacBank in Mongolia to explore microfinance's potential in supporting low-income households. Extensive research in Ulaanbaatar unveiled that households spent up to 90% of their income on coal for heating, causing severe health impacts and high pollution levels. MEC introduced innovative solutions—an efficient furnace and a ger blanket—to reduce coal consumption. Overcoming challenges, MEC achieved remarkable success, with over 90% of gers in Ulaanbaatar adopting these technologies. This led to partnerships with aid agencies and a significant reduction in air pollution. By 2016, improved cookstove penetration reached 54%, with over 142,000 clean stoves sold, covering more than 90% of ger area households (UNDP report, 2020). As a result, PM2.5 concentration in Ulaanbaatar decreased by 69% between 2010 and 2015, mainly attributed to the clean stoves (Enkhbat, et al., 2020).

Audited Documents

SR No.Document Name
1VPA Design Document for GS 2435
2VPA Design Document for GS 2684
3VPA Design Document for GS 2685
4VPA Design Document for GS 2686
5VPA Design Document for GS 2687
6Monitoring Report for GS 2435
7Monitoring Report for GS 2684, GS 2685, GS 2686, GS 2687
8 Verification Report Form for GS4GG Program of Activity

Sustainable Clean Energy


MEC's Innovative Approach with MFIs


MicroEnergy Credits (MEC) is dedicated to bringing clean energy to remote communities to improve their quality of life and support them in their journey out of poverty. MEC carefully selects its projects and ensures that they meet the additionality criterion so that the carbon finance is directed towards initiatives that make a genuine impact on reducing greenhouse gas emissions.  The task of implementing these projects is fraught with challenges, including economic barriers and market inefficiencies that hinder the adoption of clean energy products. However, the partnership of carbon finance and microfinance institutes is the solution.

Importance of Additionality

One of the fundamental principles of carbon markets is that carbon finance should only be directed towards projects that are additional to the baseline scenario or business as usual. This additionality criterion is essential to ensure that carbon finance is channeled towards initiatives that result in concrete and measurable reductions in greenhouse gas emissions. An additionality test is typically employed to determine whether a proposed project would have been implemented even in the absence of carbon finance, and thus whether the funding is required to incentivize the project's implementation.

One of the primary approaches for assessing project additionality is a barriers analysis, which is conducted by MicroEnergy Credits for each of its projects. This independent test is used to identify potential barriers to project implementation, such as technical, financial, or regulatory hurdles, and to determine whether the proposed project is financially or technically feasible without carbon finance. By conducting a thorough barriers analysis, MicroEnergy Credits ensures that its projects meet the additionality criterion, and that carbon finance is directed towards initiatives that make a genuine impact on reducing greenhouse gas emissions.

Here is an overview of the obstacles that MicroEnergy Credits generally faces while launching a clean energy program and how partnering with microfinance institutions (MFIs) can help overcome these hurdles.

Obstacles to clean energy

Introducing clean energy products and technology is challenging, particularly during the initial project implementation stage. Some of the significant hurdles include a lack of access to upfront finance, limited awareness of clean energy products and their value proposition, inadequate supply of products in the local market, insufficient after-sales service and maintenance, and an inability to afford the clean energy products.

MEC addresses these challenges by collaborating with microfinance institutions to promote affordable, reliable clean energy products to low-income households directly. MFIs are well-suited to provide clean energy to their clients since they offer finance and education with frequent touchpoints that create awareness. They can finance upfront costs, possess local knowledge, understand local energy resources and needs. Additionally, most microfinance clients remain bank clients for many years or decade.

Historically, only a small percentage of microfinance institutions has offered microfinance for low-carbon technologies due to economic barriers. The major barriers preventing MFIs from starting clean energy product lines include the high cost of hiring additional staff, expenses for marketing and creating awareness, a steep learning curve to understand products and technologies, the lack of partnerships with local suppliers and distributors, reputational risks, scarcity of on-lending funds, and difficulty developing financial products for consumptive loans.

MEC’s program overcomes these barriers

MEC has developed a program that empowers microfinance institutions to overcome these obstacles by using carbon finance. This approach enables low-income households and individuals to invest in clean energy products by addressing the barriers of education, price, finance, supply, and after-sales service. First, MEC works with the microfinance institution to develop an attractive clean energy product offering to its microfinance client base. Second, MEC trains the microfinance institution to implement the clean energy lending program. Third, MEC implements a robust and transparent carbon credit monitoring and tracking system to quantify and record the volume of carbon emission reductions created through the clean energy program.

Finally, the carbon finance is used to expand and sustain the clean energy program through client education and marketing, internal training and capacity building, on-lending funds to local SMEs producing the clean energy systems, aftersales service and maintenance, and lowering the interest or principal cost to the client.

This comprehensive and transparent use of the carbon funding ensures that the project is self-sustainable. For example, this is the primary reason why the cookstoves distributed through MEC’s project in partnership with XacBank in Mongolia are still in use after a decade of distribution. This is one of the few projects globally that has successfully achieved such a milestone. MEC’s carbon lending programs benefit the MFIs, local communities, and the environment at large.