Largest carbon credit certifier bids replacing rainforest offsets plan

The world's biggest carbon credit certifier – used by Disney, Shell, and Gucci, among others, for climate claims – has announced that it will phase out and replace its rainforest offsets programme by mid-2025, after a Guardian investigation revealed that it was flawed.

Verra, the primary credibility guarantor for the fast expanding $2 billion (£1.6 billion) voluntary offsets market, has committed to terminating its rainforest preservation programme by July 2025 and implementing new guidelines, which it is now developing. A senior Verra official stated last week that the current system must be replaced.

The Guardian reports that in January, a nine-month study conducted by the Guardian, the German weekly Die Zeit, and SourceMaterial uncovered severe systemic flaws. An analysis of a substantial portion of Verra's projects revealed that more than ninety percent of its rainforest offset credits do not represent authentic carbon reductions.

There is evidence that people were forcibly evicted from their houses in at least one of the offsetting projects administered jointly by Conservation International and the Peruvian government.

Verra's rainforest carbon offsets have been utilised by internationally known corporations, including the band Pearl Jam, easyJet, Lavazza, and the Berkeley Group. Some companies have labelled their products as "carbon neutral" and informed their customers that they may fly, buy new clothes, and consume particular meals without exacerbating the climate crisis. In Singapore and Colombia, businesses can purchase carbon offsets as an alternative to paying carbon taxes.

The investigation revealed that many claims based on rainforest credits, which are derived by projecting deforestation that would have occurred in the absence of conservation programmes, were mostly useless, exposing organisations that purchase the offsets to the risk of greenwashing. Verra strongly refuted the findings and reaffirmed its dedication to rainforest conservation programmes.

In the United Kingdom, the European Union, and the United States, regulatory scrutiny of what corporations can say using carbon credits, especially claims of carbon neutrality, is increasing.

The US non-profit said it would stand by current methods for producing rainforest offsets in the interim even though authors of Verra's own rules for the carbon credits say they are flawed and open to exploitation, potentially allowing tens of millions of worthless carbon credits to be issued and sold to companies in the meantime, adds The Guardian report.

Last month, the non-profit said it would update its methodologies in the coming months and the new methodology would be available this year. It said buyers would be able to request that a project uses the new rules. Verra has expanded its staff and team reviewing rainforest offsetting projects amid rising frustration with the organisation over delays, which it said reflected overwhelming demand for its services.

It comes amid growing scrutiny of the carbon offsetting sector's ability to mitigate climate breakdown despite efforts to transform it into a multibillion-dollar industry, which is unregulated and insiders say is rife with conflicts of interest, warning many stand to lose money if fewer credits are approved. Many organisations in the sector earned millions during the pandemic when demand for nature-based credits soared.

Verra earns $0.10 (8p) for every credit it certifies and approves tens of millions each year, increasing the non-profit's revenues dramatically as the market has grown. David Antonioli, Verra's chief executive, has said its deforestation credits require a "leap of faith" while authors of the rules for credits acknowledged there were problems.

Charlotte Streck, a co-founder of Climate Focus, which developed a leading rainforest offsetting Verra methodology, said the rules could be reinterpreted and exploited, and that the system needed to change. Kyle Holland, the author of a widely used methodology, said it was "tempting to abuse the flexibility of these models" that Verra allows. Lucio Pedroni, another author, said measuring avoided deforestation was difficult but the system had been abused by some users, resulting in overstated claims.

Prices and demand for Verra's rainforest offsets dropped after the investigation, following a longer-term fall in the market since it peaked in 2021. The investigation was followed by a series of exposés about the industry from other outlets.

On Tuesday, Verra's senior director of forest carbon innovation, Julie Baroody, who is responsible for the rainforest offsets programme, told a meeting with academic and industry experts about the issues raised by the investigation and said the system would be replaced.

"We need to be moving on from the current approaches and we are doing that. But for now, we still stand by all of our current methodologies as the best in class and we've reviewed them over the years. We will be revising certain parts of them going forward until we have this new methodology in place at which point in time, we will phase out the current methodologies," said Baroody.

The non-profit has been consulting on the change since 2021 but has not yet announced the final rules. It confirmed to the Guardian that it anticipated all projects would have switched to the new system by July 2025. Many projects would change before that date once deforestation data became available, it said.

‪Britaldo Soares-Filho, a professor in environmental modelling at the Federal University of Minas Gerais in Brazil, whose land use change software is used by some projects to generate carbon credits, said there was a contradiction in Verra's decision to replace its system.

"When I saw those people using our models in their projects, I saw that I was part of this mess. I have a responsibility to demystify [the system]. Verra has validated credits using disgraced methodologies and now they say they are going to change everything. Those credits are mostly hot air. What's going to happen to the projects? There are a lot of question marks out there," he said.

A Verra spokesperson said the organisation was a non-profit and it charges fees to cover costs, and is committed to providing the highest levels of environmental integrity based on the best available science. Verra said it would continue to expand its staff and review the methodology in its programme every five years. It recently hired a president dedicated to improving how Verra is organised.