UK Government finally unveils its controversial quality assurance scheme for carbon offset providers on GreenAir Online

Fri 6 Feb 2009 – The UK’s Department for Energy and Climate Change (DECC) has invited carbon offset providers to apply to join its Quality Assurance Scheme for Carbon Offsetting, an initiative aimed at increasing consumers’ understanding of carbon offset schemes such as those offered by airlines and helping them to make informed purchases of good-quality offsets. Those providers who have been approved can then use a quality mark to demonstrate to the public and businesses that their offset schemes and the projects supported comply with the quality criteria set out by the Government.

The scheme was announced a year ago by then Environment Secretary Hilary Benn (see article), who said: “If people are trying to reduce their impact on the climate, the first thing they should do is find ways to reduce their carbon footprint. But realistically, there are emissions that can’t or won’t be avoided, and that is where offsetting can play an important role.That’s why the Government is developing a Code of Practice and a quality mark for high-quality offsetting products to help businesses and individuals act on CO2.”

It was suggested at the time the scheme would only include Kyoto-compliant credits – Certified Emission Reductions (CERs), Emission Reduction Units (ERUs) and Phase 2 European Union Allowances (EUAs) – as valid offsets in order to ensure its integrity and inspire consumer confidence. This has now been confirmed although Voluntary Emissions Reduction credits (VERs) may also be allowed at a future point, “subject to a satisfactory level of assurance becoming available about their quality, and especially additionality”.

This has upset the voluntary offset industry, which believes the Government should have recognized VERs from the start. Jonathan Shopley, co-chair of the International Carbon Reduction and Offset Alliance (ICROA) – whose members include The CarbonNeutral Company, ClimateCare and TerraPass – said the exclusion would harm the voluntary carbon market.

“Rather than support the expansion of the voluntary emissions reduction market, the DECC scheme is certain to inhibit this important activity,” he said. “Voluntary offset purchases result in greenhouse gas emissions reductions that are additional to those required by law. These reductions provide individuals and businesses with a powerful way to take significant action to curb global emissions. The Government should be working with the voluntary carbon market, not undermining it.”

While CERs are designed for larger projects and carbon trading schemes, VERs can help fund smaller, more innovative projects which can often help alleviate poverty and, in some instances, restore critical ecosystems and habitats, argues ICROA.

Shopley says the design of the new scheme has failed to keep pace with developments in the voluntary carbon market, “which has significantly progressed in sophistication, quality and self-regulation in the last two years.”

ICROA emphasizes its members have committed to selling VERs produced by projects developed in compliance with several leading certification standards, notably the Gold Standard and the Voluntary Carbon Standard. It is concerned that the Government’s requirement that only CERs be used in voluntary markets and the additional costs of registering offsets under the scheme will also drive up the price. “We should be creating more incentives to finance new carbon projects and greater opportunities for businesses and individuals to buy offsets,” says Shopley, and urged the Government to sit down with stakeholders “to address these flaws”.

The Government has stated that it will set up an Offsetting Industry Stakeholder Panel to advise on the operation of the scheme and address the concerns expressed by ICROA. The scheme itself will be self-funded from fees payable by the offset providers and applications will be administered, assessed and monitored by AEA Group, who the Government has appointed as the Approval Body.

According to the document on requirements and procedures released by the Government, approved offsets will have to demonstrate the following criteria:

· Provision of information about the role of offsetting in tackling climate change and advice on how a consumer can reduce his or her carbon footprint .

The methods used by offset providers for calculating carbon emissions will also have to meet tight requirements. Acceptable methodological approaches include Defra’s Voluntary Reporting Guidelines, WRI Greenhouse Gas Protocol and ISO standards such as ISO 14064.

Concerning the offsetting of flights, the document says: “To account indicatively for the total radiative forcing impacts of aviation, a factor, or multiplier, could be used to uprate carbon dioxide emissions. It is for the offset provider to decide whether or not to include such a multiplier when calculating emissions from flights. The provider should make it clear to the consumer if it is applying a radiative forcing factor or not. In line with best scientific evidence it is recommended that 1.9 is used where it is decided to apply a multiplier. This will be kept under review as new evidence comes to light.

“If an offset provider chooses not to account for the total radiative forcing impacts of aviation, it should be clear that the product is only offsetting CO2and that there are wider impacts arising from aviation. Alternative radiative forcing factors can be used if offset providers have the evidence base to inform their view. The Scheme does, however, require full transparency, both in terms of the factor to be applied and of demonstrating what the carbon dioxide emissions would be with no factor applied. The consumer can also be referred to the approval website, where further information about radiative forcing will be available.

“The Government wishes to see full transparency in the way that emissions from flights are calculated in terms of the distance travelled and any uplift factors applied to account for circling and delay. It is acknowledged that a number of methods are currently used. The relevant factors in Annex 1 [of the document] should be used if distance travelled and any uplift factors applied to account for circling and delay are used in flight emissions calculations.

“If an offset provider is selling an offset with other services it may be appropriate to allow the use of emissions factors specific to that service. For example, if an airline sells offsets for their own fleet of planes they may have more accurate fleet-specific data. If an offset provider wishes to use a specific set of emissions factors they must request this in their application. The Approval Body will confirm whether it is appropriate to use data specific to that offset provider and what they offset. The factors and the supporting evidence base must be sent to the Approval Body who will review the calculation methodology.”

Whilst most leading UK airlines offer their passengers the opportunity to offset the carbon emissions of their journey, the future of such offset schemes may be in doubt when these airlines join the EU Emissions Trading Scheme in 2012.