Gold Standard and Sustainable Energy for All (SEforALL) have introduced a new carbon market methodology aimed at accelerating the replacement of fossil fuel generators with renewable energy systems, targeting a major source of emissions in developing and emerging economies.
The framework, called the Joined-up Sustainable Transition (JUST): Fossil Fuel Generators methodology, enables projects to generate carbon credits by decommissioning diesel and other fossil-based generators and replacing them with cleaner alternatives.
Revenue from those credits is intended to help finance renewable installations while supporting affected workers and local economies, Gold Standard explained in a media release on Tuesday.
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The initiative addresses a persistent barrier to energy transition efforts: the high upfront cost of clean energy deployment in regions where grid electricity is unreliable or unavailable. By linking emissions reductions to a new source of financing, the methodology aims to make such projects more economically viable while maintaining stable energy access.
Margaret Kim, chief executive of Gold Standard, said the approach expands access to climate finance for underserved markets, describing it as “the first carbon market methodology designed to support a just transition at this dispersed scale.”
Small-scale fossil fuel generators remain widespread, forming what the organizations describe as a “shadow grid” with an estimated 350 to 500 gigawatts in operation globally. Businesses relying on such systems face significant costs, with losses tied to unreliable electricity and backup generation estimated at $82 billion annually.
The methodology is designed for distributed energy systems and includes safeguards requiring verified generator decommissioning, continued energy reliability and measures to prevent emissions leakage. It also mandates provisions to support communities and workers affected by the transition.
Damilola Ogunbiyi, chief executive of Sustainable Energy for All, said replacing fossil fuel generators is “essential for ensuring energy security” and advancing global climate goals.
The launch builds on a separate coal decommissioning methodology introduced earlier this month, extending carbon market tools across both large-scale and distributed fossil fuel systems.
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