Verra validated by carbon market watchdog after ‘significant’ procedural changes

The standards organisation accused of approving “worthless” credits last year got an endorsement for meeting the ICVCM’s quality criteria. The carbon market outlook remains unclear, with Indonesia recently censuring a huge forest project.

InfiniteEarth Rimba Raya monkey
A Proboscis Monkey in the Rimba Raya forest reserve in Indonesia. The project is currently being suspended by the Indonesian government. Image: InfiniteEarth.

Verra, the world’s largest carbon credits certifier, has been approved “high-integrity” by industry governance body, the Integrity Council for the Voluntary Carbon Market (ICVCM).

The announcement comes a month after it missed ICVCM’s first round of approvals, as the group said it needed more time to process a large volume of information from the certifier. The endorsement could go a step towards vindicating Verra from accusations that it has been clearing offsets that do not help reduce emissions.

Fellow US-based certifier focused on forest protection, Architecture for REDD+ Transactions, or commonly ART, also received ICVCM endorsement. Since last month, five certifiers covering 98 per cent of the market – including Gold Standard, ACR and Climate Action Reserve – have been cleared by the watchdog, in an extensive exercise to restore trust with wary buyers. Verra is the biggest player with a 70 per cent market share.

Businesses globally buy carbon credits, each representing a tonne of carbon dioxide saved, from the voluntary carbon market to offset their own emissions and meet sustainability goals. But large climate projects issuing credits – even after checks by certifiers like Verra – have been accused of bloating figures to benefit sales, causing buyers to flee to avoid greenwashing risks.

Forest protection ventures have received the bulk of the flak. UK daily The Guardian last year alleged that most forest carbon credits cleared by Verra are “worthless” due to lax calculations. A 780,000 hectare project in Zimbabwe linked to major purveyor South Pole was similarly accused of overissuance and has been suspended by Verra. Forest credit prices have since plunged multifold, while key executives from both South Pole and Verra have departed.

ICVCM checks certifiers on issues such as governance, transparency, and having proper monitoring procedures. The council said Verra made “significant changes” to its procedures before being approved, pointing to new monitoring programmes, grievance procedures and transparency on benefit-sharing arrangements with local communities.

Amy Merrill, interim operations chief, said the council is pleased to see certifiers making substantive changes to meet its standards.

“We are now in oversight mode for these programmes, ensuring their continued adherence to our rules,” Merrill said.

The ICVCM is concurrently studying individual methodologies – rulebooks carbon credit certifiers use to verify different carbon projects – for approvals starting next month. Certifiers with programme-wide clearance can attach “Core Carbon Principles” quality tags to carbon credits they issue, if they are based on endorsed methodologies.

The council hopes corporates will see tagged credits as a global benchmark for quality and be encouraged to make bigger purchases, reversing the current market stall. It added that major market regulators worldwide are looking to align rules and initiatives to its quality tag.

The main forest protection methodologies for both Verra and ART are under review. Verra’s earlier rulebooks, involved in the past controversies, are not evaluated, but the certifier has a process to help existing projects adopt its latest methodology from November 2023, ICVCM noted.

Forest protection for carbon offsetting remain under debate. Proponents say they channel finance into conservation projects that otherwise are economically unviable – and point to how many initiatives are struggling to stay afloat in current market conditions. Critics say the calculations required to generate carbon credits from such initiatives – based on theoretical “counterfactuals” – will always be inaccurate and vulnerable to corporate greed.

In a move that could further roil markets, Indonesia recently revoked the licence for the world’s largest of such forest projects, Rimba Raya, also overseen by Verra. The 64,000-hectare tropical reserve is said to help avoid 130 million tonnes of carbon emissions.

The Indonesian government had said the project’s undertaker, PT Rimba Raya, transferred its permit to another entity without approval, traded credits beyond its permit area, and failed to pay fees – accusations that are being rebutted.

Singapore-based carbon bourse Climate Impact X (CIX) said it is monitoring the situation that is “developing quickly”, and has made no changes to its “CIX Nature X” bundled product that draws carbon credits from the Rimba Raya project. CIX has thus far only imported credits issued 2018 or older from Rimba Raya due to an absence of more recent offerings available in circulation, a spokesperson noted.

Correction: This story has been amended to reflect that the Indonesia government has suspended the licence of PT Rimba Raya, not InfiniteEarth. We are sorry for the error.

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