# What must an investment analysis show to prove additionality under the Integrity Council for the Voluntary Carbon Market (ICVCM) rules?

Canonical: https://senseible.earth/answers/ccp-investment-analysis-rules-ten-years-and-lender-consistency

The analysis must use a suitable financial indicator, include all costs and revenues, cover at least ten years or the expected operating life, include a sensitivity analysis, and be consistent with what management, investors and lenders were shown. In a benchmark analysis, credit revenue must be what lifts the project over the benchmark.

## What the framework requires (criterion 8.5)

1. A suitable financial indicator, such as net present value (NPV) or internal rate of return (IRR).
2. All relevant costs (capital and operating) and all revenues, including subsidies or official development aid where applicable.
3. Assumptions, data and conclusions that are transparently documented, justified with evidence, and consistent with information presented to the company's decision-making management and investors or lenders.
4. Internally consistent parameters, for example cash flows in real or nominal terms throughout.
5. A benchmark consistent with the weighted average cost of capital (or the cost of equity) commonly applicable to the country, sector and type of activity.
6. An assessment period that reflects the expected operating period or is at least ten years, and includes the value of the assets at the end.
7. A sensitivity analysis showing whether the conclusion holds under reasonable variation in the critical assumptions.
8. Assessment of every element by a validation and verification body (VVB) and/or the program.

## When the benchmark test passes

Additionality is demonstrated if all three hold: the activity would not meet the benchmark without carbon credit revenue, its economic performance increases decisively through that revenue, and the revenue can raise it to or above the benchmark.

## Investment comparison version

If the analysis compares alternatives, they must be mutually exclusive and provide the same type of products or service levels. Additionality is demonstrated if the activity would not be the economically most attractive scenario without credits.

## The lender file is part of the evidence

The consistency requirement means a loan application, board note or bank projection that shows strong returns without credits can contradict a claim that the project fails its benchmark without them. Criterion 8.4 also requires investment analysis to be combined with a market penetration or common practice assessment. Our reading: line the two up before you submit either.

## A payback figure in a loan file

- Equipment cost: Rs 12,00,000. Yearly saving shown to the lender: Rs 4,80,000.
- Simple payback in that file: 12,00,000 / 4,80,000 = 2.5 years
- Ten-year saving at that rate: 4,80,000 x 10 = Rs 48,00,000, against Rs 12,00,000 spent
- Our reading: an additionality claim that the project would fail its benchmark with no credits would have to explain this file.

Figures are an example in rupees (Rs). Payback is used only to show the consistency point, and a payback alone does not show the benchmark is met, because the benchmark is set on the cost of capital; the framework names net present value or internal rate of return as example indicators.

## What Senseible does here

Senseible reads fuel invoices and electricity bills into monthly records, which gives a project its own fuel and power history. Credits are issued by the program's registry and checked by an independent verifier, not by Senseible's own check. Fuel and electricity bills from before and after the change show the actual yearly difference to feed into this analysis.

- [Clean Development Mechanism additionality investment analysis explained](https://senseible.earth/answers/cdm-additionality-investment-analysis-explained)
- [What additionality means and how it is tested](https://senseible.earth/answers/what-is-additionality-in-carbon-credits)
- [Proving additionality for an efficiency project](https://senseible.earth/answers/prove-additionality-energy-efficiency-project)
- [Carbon credits for Indian businesses](https://senseible.earth/carbon-credits)

Sources: [Integrity Council for the Voluntary Carbon Market, Core Carbon Principles Assessment Framework, Section 4, January 2024, version 1.1 (criteria 8.4 and 8.5)](https://icvcm.org/wp-content/uploads/2024/02/CCP-Section-4-V1.1-FINAL-15May24.pdf)

Last reviewed 2026-11-05. Based on Assessment Framework version 1.1 (January 2024). The Integrity Council's August 2026 rule architecture says Interpretations and Technical Notices may affect how criteria are assessed, so check icvcm.org for any in effect before you rely on a detail.