The new tool is part of a broad industry effort to increase the integrity of carbon credits through the use of technological innovation.
A tracking tool recently released by the third-party carbon credit verification organization Verra – which aims to increasing the transparency of carbon capture and sequestration products – is among the latest in a wave of initiatives using digital solutions to tackle mistrust and confusion in the marketplace.
Verra’s Project Tracker tracks the status and progress of each carbon credit project, from initial listing to registration, validation and verification.
Speak with ESGJoel Finkelstein, senior director of media and advocacy at Verra, described the organisation’s decision to introduce the Project Tracker as an “important and perhaps inevitable step towards greater transparency and responsiveness”.
Finkelstein said the tracker will allow users to track feedback and receive updates in “near real time.” The new digital platform will “significantly reduce” cross-correspondence, “increasing efficiency,” he added.
The Project Tracker is the first tool released from the Verra Project Hub.
As part of the initiative, Finkelstein said Verra is making progress on other types of features, but declined to provide a timeline for rolling out the hub’s full capabilities. “We want to do it right and these things take time,” he said.
Verra’s Project Hub will be expanded to facilitate the online submission of new projects for review, a digital assessment of the non-permanent risk of projects, and provide direct interaction with the auditors of carbon capture projects.
Finkelstein described Project Tracker as the “first part of a quite extensive and far-reaching digitalization initiative” that Verra hopes will “streamline and transform the engagement experience” with the organization’s multi-stakeholder registry.
“There is much more to come that will significantly increase speed, efficiency and transparency,” Finkelstein said.
“Ultimately, it all contributes to the integrity of the system.”
Overcoming offset uncertainty
Carbon credits from projects certified by Verra and colleagues can be bought and sold through voluntary carbon markets (VCMs). Reached the VCM market $2 billion last year – with around 500 million carbon credits traded – and it is expected to reach as much as $1 trillion by 2037.
Finkelstein said there is a “real need” for project proponents to have “transparency, ease of use and speed on a more regular timeline” to provide greater certainty for institutional investors and the broader market.
“Our stakeholders want to hear from us more efficiently and quickly,” he added. “They need information at their fingertips.”
Simon Puleston Jones, CEO of carbon brokerage and consultancy Climate Solutions, said ESG that the “widespread availability of accurate, affordable and timely data” related to carbon reduction projects “is critical if carbon markets are to scale.”
Reducing emissions from deforestation and forest degradation in developing countries (REDD) is an example of a carbon reduction project. These projects predict the amount of deforestation they will prevent, with companies like Verra reviewing and verifying these claims. Once the claims are certified, they can be used to generate carbon credits, using an approved formula to convert these into carbon saved. These credits can then be purchased by companies or individuals to offset their own carbon emissions.
Earlier this yearVerra was criticized Following a study that claimed only a “handful” of rainforest projects approved by the carbon credit verifier showed evidence of reductions in deforestation, with 94% of credits produced delivering no climate benefits, rendering them worthless.
Verra refuted the claims.
In June the organization launched a public consultation on proposed changes to the Verified Carbon Standard (VCS) program to “strengthen and update” the rules. The consultation closed at the end of July and Verra is currently assessing comments and finalizing its proposals, ahead of a planned announcement at the end of this month.
Clarity on carbon credits
The introduction of Verra’s Project Hub aims to increase transparency and improve the overall integrity of carbon credits.
According to Finkelstein, there have been some “valid concerns” raised by market players seeking transparency and integrity for carbon credits, with the tracker and hub aiming to resolve these issues.
Despite the uncertainty surrounding carbon credits and VCMs, a questionnaire from more than 500 mid-to-large companies in the US, UK and Europe found it that 89% of companies see carbon credits as a valuable tool to reduce CO2 emissions.
However, it noted that there were concerns about potential greenwashing, as well as difficulties in evaluating the quality of carbon credits, citing the lack of regulation and transparency as barriers to increasing investment in VCMs.
Carbon credits can be purchased, traded and sold on VCMs that are currently not regulated. However, updates on new rules and frameworks are expected from the Voluntary Carbon Markets Integrity Initiative (VCMI) and the Integrity Council for the Voluntary Carbon Market (ICVCM).
The VCMI introduces demand-side rules for entities using carbon credits as part of their decarbonization strategies and net-zero commitments.
The ICVCM, the body responsible for the supply side of VCMs, recently released are full global benchmark for high-integrity carbon credits, with the aim of maximizing the ability of VCMs to support the achievement of global climate goals.
Finkelstein said carbon credit certification should be a “rigorous process with integrity and controls.”
The revisions to Verra’s VCS would align the program with integrity initiatives within the VCM, including the ICVCM.
Transparency through technology
Verra is not the only carbon credit organization focused on increasing transparency and credibility through technology-based solutions.
Puleston Jones said several early-stage ‘CarbonTech’ companies have entered the market to raise seed and series A capital, highlighting the use of technologies including satellite imagery, radar, lidar, geolocation, drones and artificial intelligence.
Cargill, a global food, agriculture and bio-industrial company, recently rolled out new technologies for tracking deforestation in the global soy, palm oil and cocoa supply chain. The partnership with Satelligence will see satellite-powered deforestation risk monitoring deployed to provide near real-time data and identify deforestation risks and breaches.
Global carbon rating agency BeZero Carbon has done just that partnered with environmental intelligence firm Kayrros to improve the assessment of VCM projects. Through the partnership, Kayrros’ satellite-based mapping of the Amazon Basin will be incorporated into BeZero Carbon’s assessments, which assess the quality of carbon credits. This mapping aims to provide additional real-time, high-resolution data on tree cover and height, as well as above-ground biomass, to better understand the effectiveness of carbon projects.
Last week, BeZero strengthens its carbon estimation capabilities by working with the Earth Observation and Geoinformatics Department of Brazil’s National Institute for Space Research (INPE) to improve its estimates in the Amazon region. This will combine data collected by INPE’s satellite technologies with carbon measured by scientists and included in BeZero’s assessments to improve VCM transparency.
The company has also joined forces with research institutions TU-Dresden and the Royal Netherlands Meteorological Institute for a European Space Agency project that will use satellite capabilities to assess the impact of forest fires on the carbon cycle. This project will collect data that will help BeZero develop near-real-time monitoring tools for global fire emergencies that can help assess carbon losses.
Earlier this year, carbon credit assessment and analytics provider Sylvera announced increased $57 million in a Series B funding round to scale its carbon intelligence platform in the US.
Despite companies beginning to adopt technologies, Puleston Jones suggested there is a ‘gap in the market’ for technology that makes it easier for property developers and companies to identify which current and developing methodologies could enable them to make carbon offsets in relation to the CO2 emissions they want to reduce or eliminate.
He described the current state of carbon offset methodologies as a “maze of complexity that requires a lot of manual due diligence.”