Virgin Atlantic removes Cambodian forest project from carbon offset portfolio as NGO and standards body clash over REDD+

Virgin Atlantic removes Cambodian forest project from carbon offset portfolio as NGO and standards body clash over REDD+ | Virgin Atlantic,VCS,Fern,Natural Capital Partners,REDD+

Oddar Meanchey REDD+ project
(photo: Terra Global Capital)

Tue 23 Jan 2018 – Following a report by forestry NGO Fern, Virgin Atlantic Airways has removed from its carbon offset portfolio a controversial REDD+ project in Cambodia. The report, which warns the aviation industry not to purchase REDD+ forestry credits under the ICAO CORSIA international carbon offsetting scheme, included a case study of the Oddar Meanchey project. Fern claims forest carbon offsets fail to meet the majority of the eight principles set by ICAO and should be excluded from the CORSIA mechanism. The NGO also says standards set by bodies such as Verified Carbon Standard (VCS), which certified the Cambodian project, should not be trusted. VCS has reacted strongly, publishing a rebuttal and calling the report inaccurate and misleading. It says REDD+ has matured over the past decade and forest carbon credits are now well-positioned to meet all ICAO’s offset quality criteria.


REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is a UNFCCC-developed mechanism that allows projects in developing countries to receive funding for the conservation and sustainable management of forests, so preserving forest carbon stocks. Deforestation was first introduced as a new and separate agenda item of the UNFCCC negotiations at COP11 in 2005. Since then, the scope expanded from reducing emissions from deforestation (RED) to include forest degradation (REDD) and three additional ‘plus’ elements: the conservation and the enhancement of forest carbon stocks and the sustainable management of forests.


Around 11% – some say as high as 18% – of global carbon emissions are caused by deforestation and forest degradation, and in addition to their carbon storage role, forests are valuable in many other ways with the protection of the ecosystem and biodiversity. It is estimated by the UN that 1.6 billion people depend on forests and so by conserving them, REDD+ is also meant to offer a broad range of social, environmental and economic benefits to developing countries and forest communities.


There are around 64 developing countries in Africa, Latin America and the Asia-Pacific region participating in the UN-REDD Programme that was launched in 2008. The multi-lateral body partners with developing countries to support them in establishing the technical capabilities needed to implement REDD+ and meet UNFCCC requirements for REDD+ results-based payments. Most of the money for projects comes from multilateral and bilateral aid agencies, including the World Bank, the UN-REDD Programme and governments, particularly Norway.


By putting a value on forest protection, REDD+ has also created a voluntary market in which generated credits are sold to fossil fuel-dependent industries to offset their carbon emissions. However, REDD+ has proved controversial from the outset, with the result that REDD+ credits are not permitted under the EU Emissions Trading System (EU ETS) or the UN’s own Clean Development Mechanism (CDM). As a consequence, the market for forest credits has been limited but there is now interest from the airline industry to purchase the credits under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).


According to the Fern report, ‘Unearned credit – why aviation industry forest offsets are doomed to fail’, carbon offset programmes under CORSIA must meet eight criteria:

  1. Are additional;
  2. Are based on a realistic and credible baseline;
  3. Are quantified, monitored, reported and verified;
  4. Have a clear and transparent chain of custody;
  5. Represent permanent emissions reductions;
  6. Assess and mitigate against potential increase in emissions elsewhere;
  7. Are only counted once towards a mitigation obligation; and
  8. Do no net harm.


Fern claims that forest carbon offsets are “highly unlikely” to meet at least six of these eight criteria, with criteria three and four open to question in particular cases. Therefore, it argues, if airlines were able to use offsets where actual emissions did not result, ICAO’s post-2020 carbon neutral growth ambition would be at risk of not being met.


The report carries two case studies of airline-backed REDD+ projects – Mai Ndombe in the Democratic Republic of the Congo and Oddar Meanchey in Cambodia – and scored them against the ICAO criteria. Credits have been purchased for the former by Austrian Airlines and the Good Traveler passenger carbon offset programmes, whereas Virgin Atlantic’s passenger offset programme has supported the Oddar Meanchey project.


Cambodia’s first REDD+ project, Oddar Meanchey, covering 65,000 hectares, supports 13 community forestry groups and is being implemented by the Forestry Administration of Cambodia, Pact, Terra Global Capital (the project developer) and the Children’s Development Association, with funding support expected to come from the Clinton Foundation, United Nations Development Programme, Terra Global Capital and Pact. The amount of verified carbon units (VCUs) – under the VCS Program, projects are issued unique carbon credits known as VCUs equal to the removal or prevention of one tonne of CO2e achieved by a project – generated by Oddar Meanchey are 6,143,767 after applying a 19.75% ‘buffer’ discount over a 30-year crediting period that started in February 2008. A VCS pooled buffer account holds non-tradable buffer credits to cover the risk of non-permanent emission reductions.


The project was reported by The Cambodia Daily in June 2013 to have got off to a “troubled start” and anti-REDD campaign group REDD-Monitor has since posted a number of blogs concerning ongoing problems with the project, including forest clearance by Cambodian soldiers as Oddar Meanchey province is on the border with Thailand. A number of articles have appeared during the past two weeks in The Phnom Penh Post (here, here and here) over the issue and Virgin Atlantic’s withdrawal from the project, prompted by the Fern report.


Virgin Atlantic customers can purchase carbon credits for their flights through its offset partner Natural Capital Partners (NCP), formerly The CarbonNeutral Company, and the portfolio also includes wind power and solar cooker projects.


“In November 2017, we were made aware of concerns regarding the Oddar Meanchey project in Cambodia,” an airline spokesperson told GreenAir in a statement. “The project was included in our portfolio in good faith, and NCP have confirmed that these credits were generated in 2010 and validated to the Climate, Community and Biodiversity (CCB) and Verified Carbon Standards in 2013.


“As a customer, we rely on independent accreditation schemes like these to ensure quality. But things can change in the years between verifications, and because of the subsequent concerns raised, we asked NCP to remove this project from our portfolio. As a result, none of our customers’ offset purchases from 2017 onwards will have included this project.”


Responding, Fern’s Julia Christian said: “Virgin’s statement reveals the flawed logic at the heart of the forest offset industry, and why the aviation industry’s plans to massively ramp up their use is so dangerous. Virgin’s claim that ‘things can change in the years between verifications’ underlines precisely why offsets don’t work. The airline may have stopped purchasing Oddar Meanchey credits but for the offsets they have already used, the emissions they were meant to ‘balance out’ are now forever in the atmosphere.


“This can happen at any point in a forest offset project, even years after the project is finished. As soon as any forest is destroyed, its effect of balancing out emissions disappears. Storage of carbon in forests is highly reversible and volatile. It cannot be used to balance out airplanes’ release of carbon emissions into the atmosphere – which are permanent.”


NCP’s Chief Marketing Officer, Rebecca Fay, admitted the Oddar Meanchey project had turned out to be “challenging” but said NCP had originally purchased the credits back in 2014 and had no doubts about their integrity.


“Processes are in place to ensure those emission reduction credits that are sold are always guaranteed because they have been validated and verified, plus there is a buffer in place to protect against any loss of trees,” she told GreenAir. “Yes, this project is now struggling but that doesn’t impact the credits Virgin Atlantic have purchased and doesn’t mean all REDD+ projects are bad – there are amazing projects around the world that are doing really important work.


“There are many aspects of the Fern report that are being challenged by VCS and the project developer but the airline has decided that it doesn’t want to support that particular project in the future.”


Both the Oddar Meanchey and Mai Ndombe projects were certified by VCS. “As one of the leading carbon verification standards, on which ICAO is proposing to rely heavily to implement its carbon offsetting scheme, this is deeply worrying as the experience of Oddar Meanchey shows these standards cannot be trusted,” said Fern’s Christian.


Washington DC-based non-profit VCS has reacted strongly to Fern’s report with an eight-page rebuttal statement.


“The Fern report grossly, at times wilfully, misinterprets the way our standards function,” Kate Heller of VCS told GreenAir. “As a result, Fern draws mistaken conclusions that are not backed up with credible evidence, and which serve to support an ideological stance rather than providing an assessment of how REDD projects function. The report uses biased sources and primarily points to old arguments about REDD project risks from a decade ago, all of which have been resolved by applying rigorous academic research, practical on-the-ground implementation, and transparent rule-development processes.


“As a standard-setting body, VCS has strong incentives to maintain the integrity of its standards for the sake of the market and the projects it vets, both of which rely on VCS Program certification as a badge of quality. VCS cares deeply about the integrity of its Program.”


The VCS statement notes that if there is a loss of forest in the project area, as is reported in the Oddar Meanchey case, this is detected in the subsequent monitoring report and there is no issuance of VCUs for this loss. “REDD+ is a payment-for-results system; therefore, if there is no reduction in emissions nor increase in sequestration, no credits will be issued,” it says. “In addition, buffer credits are cancelled from the pooled account to cover any losses – meaning all issued VCUs remain permanent and atmospheric integrity is maintained. The VCS pooled buffer account currently holds more than 22 million credits to cover such potential losses and ensure atmospheric integrity across the portfolio of projects.”


VCS says uncertified low-quality forestry projects do exist but this “is not a reason to exclude high-quality REDD+ projects from CORSIA and miss the enormous associated opportunity to drive finance to forest protection.”


Commented NCP’s Fay: “REDD+ funding for forest conservation projects around the world is essential for their success. But projects are difficult – they involve the local community, NGOs and government, who have to work together as partners with the project developer to deliver. Many of them work incredibly well in supporting forest-based communities, protecting biodiversity and ecosystems, but no-one pretends they are easy.


“Fern are anti-REDD and I think they are wrong. As long as REDD+ projects are monitored, reported and verified, and VCS keeps its methodology robust, then we will continue to support them.”


The Virgin Atlantic spokesperson added: “Our industry recognises that we need additional interim action like CORSIA to get more reductions in CO2 as soon as possible – while we actively chase down a range of exciting, new low carbon tech solutions such as sustainable aviation fuels and invest billions of dollars in fuel-efficient aircraft.


“As well as CORSIA supporting renewables, we’d love to see some of this money going into much-needed, high-quality forestry conservation schemes. We removed this single project from our portfolio only as a pre-cautionary measure while we made further enquiries about the concerns raised and we’re still looking into this. In recent months we’ve also heard from a number of respected NGOs that there are many excellent forestry projects out there that could benefit from the huge funds to be generated by CORSIA. 


“We also know that robust criteria, standards and processes are key to maintaining the right checks and balances – and agree with many of those points raised by Fern and VCS. We understand that CORSIA negotiations will continue to generate a lot of healthy debate, and we remain confident that the CORSIA process will result in airlines being able to support a range of high-quality, meaningful, carbon reduction projects around the world.” 


ICAO is holding a seminar in Montreal on February 7-9 to enhance understanding of carbon markets and emissions units, including the criteria for eligible units, and will include a session on REDD+.






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