Verra, a prominent nonprofit organization in the voluntary carbon credit market, has made a groundbreaking decision to reject 37 rice cultivation projects in China. This move comes with substantial sanctions imposed on the project proponents and the validation/verification bodies (VVBs) involved. The rejection and sanctions are a result of a comprehensive quality control review, underscoring Verra’s dedication to enhancing transparency, integrity, and quality within the voluntary carbon markets.
Cracking Down on Compliance
The projects under scrutiny utilized the AMS-III.AU methodology, a part of the UNFCCC Clean Development Mechanism that was permanently deactivated by Verra in March 2023. This methodology aimed to reduce methane emissions through modified water management practices in rice cultivation. However, the quality control review uncovered significant issues, including insufficient demonstration of additionality, exaggerated project areas, and a lack of credible evidence to support baseline and project scenario implementation. Remote sensing data analysis further corroborated these concerns.
Verra’s decision to impose sanctions on these projects represents a pivotal moment in the voluntary carbon market. As part of the sanctions, Verra has issued non-conformity reports to four VVBs, namely China Classification Society Certification Company, China Quality Certification Center, Shenzhen CTI International Certification Co., Ltd, and TÜV Nord Cert GmbH. These VVBs must submit robust corrective action plans within 15 days to prevent similar issues in the future, failure to comply may lead to temporary suspension from conducting audits in Verra’s Agriculture, Forestry, and Other Land Use (AFOLU) sector.
Verra’s Sanctions Send Shockwaves Through Carbon Markets
A significant aspect of Verra’s actions is the decision to seek compensation from the project proponents for the over-issued Verified Carbon Units (VCUs). This move emphasizes the importance of accountability in the carbon market, ensuring that projects adhere to the rigorous standards set by Verra. By holding project proponents accountable, Verra aims to uphold the market’s integrity and ensure that carbon credits reflect genuine emission reductions.
Approximately a year ago, Verra faced criticism for the quality of carbon offset credits it certifies, with accusations of approving “worthless” carbon offsets that could undermine corporate climate goals. Verra’s response to these concerns underscores its broader mission to address global environmental and social challenges. The organization collaborates with both the private and public sectors to advance climate action and sustainable development, providing standards, tools, and programs that credibly assess environmental and social impacts.
In line with its mission as a nonprofit organization, Verra is dedicated to reducing greenhouse gas emissions, enhancing livelihoods, and safeguarding natural resources. As part of its commitment to continuous improvement, Verra is developing a new rice cultivation methodology under the Verified Carbon Standard (VCS) Program. This methodology will incorporate more stringent provisions, including guidance for field stratification, consideration of nitrous oxide emissions and soil organic carbon stocks, and standardized protocols for methane measurements. The goal is to enable project proponents to achieve credible emission reductions and generate high-quality VCUs. The consultation for this new methodology recently concluded, with its official launch expected later this year.
Reimagining Carbon Credits: A New Era for Rice Cultivation Projects Begins
The suspension and sanctions against the 37 rice cultivation projects mark the culmination of a process that commenced in March 2023 when Verra deactivated the AMS-III.AU methodology after a thorough review. The new methodology aims to address the deficiencies identified in the previous approach by offering clearer guidance and more efficient processes for determining additionality, quantifying emission reductions, and ensuring transparent data measurement, reporting, and verification (MRV) procedures.
Currently, Verra has registered 37 projects applying the AMS-III.AU methodology, with 25 of these projects having issued VCUs totaling 4.56 million units, representing 0.43% of all VCUs. Verra’s decisive actions in this matter serve as a strong signal to the market that inclusion in the Verra Registry signifies the quality and integrity of carbon credits. It underscores the organization’s commitment to ensuring that all projects meet the high standards necessary to deliver significant environmental and social benefits.
Janice O’Brien, Director of Auditing and Accreditation at Verra, commented on this announcement, stating, “Our quality control review identified serious failures that necessitated a robust response. The insights gained from this process will inform the development of a more effective and credible rice cultivation methodology for future projects.” By taking these unprecedented steps, Verra not only addresses the immediate issues with the rejected projects but also establishes a precedent for handling similar issues in the future. These actions are anticipated to contribute to a more robust and credible voluntary carbon market, supporting global efforts to combat climate change and promote sustainable development.
