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In a first for the Carbon Market, Gold Standard and Sustainable Energy for All (SEforALL) have launched a new methodology designed to accelerate the replacement of fossil fuel generators with renewable energy systems, opening a new source of finance for clean energy transitions in areas where electricity systems remain heavily dependent on diesel and other fossil fuels.
The Joined-up Sustainable Transition (JUST): Fossil Fuel Generators methodology enables activities to generate carbon finance by replacing fossil fuel generators with renewable energy solutions. Revenues from carbon credits can help finance clean power deployment while supporting workers, communities and local economies through the transition. This approach helps address a key barrier to early fossil fuel phase-out: the upfront cost of deploying clean energy alternatives while ensuring energy access and economic stability as fossil fuel generators are phased out.
Margaret Kim, Chief Executive Officer of Gold Standard, said:
"Across many emerging markets, communities and businesses rely on fossil fuel generators because cleaner alternatives remain difficult to finance. As the first carbon market methodology designed to support a just transition at this dispersed scale, it helps make carbon finance accessible to those who need it most, unlocking investment to replace fossil generators with renewable energy while maintaining reliable electricity and supporting local economies."
Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, said:
“Displacing fossil fuel generators is essential for ensuring energy security, supporting economic development and achieving net-zero emissions targets. This new Sustainable Energy for All (SEforALL) and Gold Standard methodology will go a long way in mobilizing climate finance, and catalysing the energy transition across the world, particularly in developing countries still heavily reliant on these polluting sources of energy.'”
The methodology is the first in the carbon market designed specifically for small-scale, distributed energy systems, where millions rely on fossil fuel generators due to unreliable or unavailable grid electricity.
Across developing and emerging economies, diesel generators form a widespread “shadow grid,” with an estimated 350–500 gigawatts in operation. While essential, they are costly and polluting, with businesses losing an estimated $82 billion annually due to unreliable electricity and reliance on backup generation.
Insights from SEforALL’s Beyond Gensets: Advancing the Energy Transition in Lagos State report further highlight the critical role of replacing fossil fuel generators in achieving a just energy transition.
On 12 March 2026, Gold Standard also published its JUST: Coal Decommissioning methodology, which enables carbon finance to support the early retirement of coal-fired power plants when they are replaced with renewable energy. Together, the two methodologies now provide frameworks to support fossil fuel phase-out across the full spectrum of electricity generation – from large grid-scale coal plants to smaller distributed generators.
Activities using the methodology must demonstrate verified decommissioning and replacement of fossil fuel generators, ensure continued energy reliability and meet strict safeguards to prevent over-crediting and emissions leakage. The framework also includes mandatory Just Transition safeguards to support workers and communities as energy systems shift to cleaner alternatives.
Gold Standard and SEforALL will convene a webinar to introduce the methodology and support project developers in putting it into practice, with further details to be shared soon.
About Sustainable Energy for All
Sustainable Energy for All has a global mandate to accelerate progress on the energy transition in emerging and developing countries. Hosted by UNOPS, we work at the intersection of energy, climate and development, partnering with governments and organizations worldwide to end energy poverty, double energy efficiency, significantly expand renewable energy and combat climate change.
Learn more about our work at www.SEforALL.org