Big Carbon-Offsets Project to Be Withdrawn From Key Ledger

(Bloomberg) -- One of the world’s biggest carbon-offset projects is being withdrawn from a key registry and standards body, in a move that once again adds confusion to the troubled market for CO2 credits.

Carbon Green Investments, a company that owns and operates offset projects, says it’s removing the Kariba forestry project in Zimbabwe from Verra’s registry, effective immediately, according to an emailed statement. 

The decision “comes after extensive deliberations and a detailed review” of the engagement process and communications with Verra over the past seven months, it said. CGI said it’s also withdrawing a second forestry project known as Chirisa. Instead, it plans to register both projects with another platform known as the Greenhouse Gas program.

Kariba has emerged as one of the most controversial projects in the market for carbon offsets. Last year, CGI lost its contract with South Pole, one of the world’s biggest sellers of carbon credits, following a string of investigations pointing to misleading claims of Kariba’s climate impact.

CGI said the decision to withdraw from Verra was driven by “a series of challenges” that hindered effective management of the project, including communication delays, denial of access to its accounts, and inadequate engagement. “These administrative challenges have led to further reputational damage and financial losses,” CGI said.  

Verra said in a separate statement that it’s reviewing the matter. The situation is “unprecedented in every sense,” the nonprofit said. Verra said it has “engaged, in the most timely way possible, in a good-faith effort.” 

The withdrawal of Kariba risks undermining one of the carbon market’s key insurance mechanisms, namely the so-called buffer pool of surplus credits set aside to cover events such as forest fires. Verra’s rules state that in the event of poor project management, the project proponent – in this case CGI – would need to replenish the buffer pool. It’s not immediately clear how that process would work if CGI quits Verra.

Verra said its “motivation isn’t to facilitate any attempt to make a clean getaway, leaving others holding the bag.” The nonprofit will “continue to focus on the environmental and social integrity expected by the thousands of high-credibility projects around the world,” it said.

Kariba has been on hold since October and Chirisa is still in the validation phase, Verra said.

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