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AMAZON has become the first company to sidestep a global standard for verifying carbon offsets, which was developed by a non-profit funded mainly by founder of the US technology conglomerate and executive chair, Jeff Bezos.
The company is supporting the development of a new standard that could allow the online retailer and cloud computing provider to overcome a lack of supply for quality-labelled offsets. This could enable the company to meet its target of cutting greenhouse gas emissions to zero on a net basis by 2040.
Critics worry that the move could lead to market confusion and compromise the standards of carbon offsets.
Companies under pressure to curb their emissions can buy credits from developers of projects that absorb carbon, such as through reforestation. The market for offsets has remained small due to a limited number of projects that can verify their climate benefits.
Amazon announced that it has completed work on Abacus, a framework for verifying the quality of carbon offsets in reforestation and agroforestry.
The standard was developed with carbon registry Verra, as an alternative to the one by the Integrity Council for the Voluntary Carbon Market (ICVCM), the world’s biggest grouping of private sector and environmental groups dedicated to validating carbon offsets.
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Verra first announced it was developing the label with Amazon and its Abacus working group in 2022.
Bezos, through his US$10 billion Earth Fund, is one of ICVCM’s biggest donors, having ploughed at least US$11 million into ICVCM and its sister organisation, Voluntary Carbon Markets Integrity Initative, which was launched in 2021.
Jamey Mulligan, Amazon’s head of carbon neutralisation, said in an interview that the company evaluated and supported ICVCM’s work, but that it wanted a more ambitious standard.
“We want to ensure that every credit investment has a real, conservatively quantified and verified impact on emissions,” Mulligan noted. He declined to comment on whether Bezos was involved in Amazon’s decision.
Bezos could not be reached for comment.
Alphabet, Meta, Microsoft and Salesforce have announced that they plan to buy up to 20 million tonnes of Abacus-certified credits.
Pedro Martins Barata, co-chair of ICVCM’s panel of experts, said he was worried about the development of an alternative standard and hoped that Abacus would eventually be folded into ICVCM.
“Otherwise, you get again into a confusing state in the market where each set of companies will find their own standards they want to support and they will say that they’re a particular type of quality,” he added.
Kelley Kizzier, director of corporate action and markets at Bezos Earth Fund and a member of ICVCM’s board, said Abacus is complementary rather than competitive to ICVCM. She also declined to comment on Bezos’ role.
“What we need to focus on is generating high-integrity (offsets). There is room for lots of actors to do that,” Kizzier noted.
Verra reported that the label will be available within weeks.
Offset market
The US$2 billion market for voluntary carbon offsets has remained small, amid concerns by companies and investors that the underlying projects may not curb as many emissions as they claim.
The market accounts for offsetting 300 million tonnes of emissions annually, reported an Environmental Defense Fund analysis of data from financial information provider MSCI.
Yet only a fraction of those offsets are verified, with ICVCM’s main quality label, Core Carbon Principle, accounting for 27 million tonnes.
“My main concern with the strategy remains with the idea that the purchase of these credits somehow ‘neutralises’ Amazon’s impact. I don’t think it does,” said Gilles Dufrasne, policy lead at environmental non-profit Carbon Market Watch.
Deborah Lawrence, chief scientist at credit ratings firm Calyx Global, welcomed the label’s requirement to make public the data on how much carbon the projects store, but said it still had questions about Abacus’ ability to ensure the carbon removals are permanent.
“Their permanence position requires further investigation,” she said. “The way it is phrased is giving us pause, but their annual monitoring and making the results public are great ideas and raise the bar.”
Amazon generated 71.3 million tonnes of carbon dioxide equivalent emissions in 2022, of which about 55 million tonnes came from its supply chain, the company’s latest sustainability report said.
It will take two to three years for projects to qualify for the Abacus label because many rely on trees growing and then developers proving how much carbon they absorb.
Mulligan said Amazon could become one of the biggest buyers of carbon credit, but that it would not use them in place of the company’s efforts to decarbonise its business.
He added that Amazon is currently reviewing more than 70 proposals from developers and expects to restore tens of thousands of hectares of degraded land.
Any developer can apply for the Abacus label provided they meet requirements of Verra’s methodology, which the Abacus working group, a team of scientists, non-governmental organisations and industry specialists helped to develop.
Eron Bloomgarden, founder of Emergent, a not-for-profit organisation that mobilises private sector funding for forest countries, said Abacus would help grow the carbon offset market.
“The work of ICVCM is important but it’s insufficient for the growth of the market, because what we are trying to do is solve big existential challenges like climate change and biodiversity extinction,” he said. REUTERS
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