Why Some of Australia’s Largest Firms are Exposed to ‘Worthless’ Carbon Project

More than 3 million "largely worthless" schemes were issued for the REDD+ scheme.

Wed 01 Nov 23


Origin Energy, KPMG, Fraser Property and Zoos Victoria are among a raft of Australian businesses exposed to the Kariba REDD+ Forest Project, now subject to an investigation by Verra.

Trust in carbon markets is at an all-time low, with just 40% of the world’s forests “having high integrity.”

As reported by ABC News this morning, the businesses bought into a scheme promising to regenerate Zimbabwean forests.

The credits have already offset emissions in several carbon-intensive activities, including Queensland electricity generation and constructing new housing for zoo operations.

On Monday, Swiss carbon consultancy South Pole, which marketed the credits to Australian firms, pulled their support for the project, with a spokesperson confirming the company “was not confident that the Kariba project met the standards it expected from its partners.”

Wood Central understands that up to 3 million “largely worthless” credits were sold in the scheme, with Australia’s exposure to the project extensive.

Origin Energy had 17,000 Kariba credits covering 2021 to 2022, which were “retired” in advance in 2021 – with credits used to offset the company Climate Active products — natural gas, electricity and LPG.

In 2013, Zoos Victoria became the first zoo in the world to become carbon-neutral. Footage courtesy of @ZoosVictoria

In addition, Zoos Victoria, which claims to be the world’s first carbon-neutral zoo, said they used extensive carbon reduction projects to cut down their emissions.

“Nature-based [carbon] offsets are also subject to changes that would occur naturally and subject to modelling,” a spokesperson said.

Whilst Frasers Property Group offered new home buyers in Brisbane the chance to make the construction of their houses carbon-neutral by purchasing credits from Kariba and another unrelated Australian project.

Customers buying Frasers homes in the Minnippi Quarter at Carina, for example, could make a “donation” of between $800 and $1,000 to make the construction carbon-neutral, according to Frasers Property advertising.

Concerns over the integrity of the credits have now led Australia’s official carbon assessor, Climate Active, to suspend applications from businesses wanting to use Kariba credits to offset their emissions.

Footage courtesy of @UNClimateChange

The REDD+ framework is a UN Climate Change initiative established to help protect global forests from the impacts of deforestation and degradation amid climate change – with Verra one of the companies operating REDD+ Forest Projects.

The scheme promised to reforest vast tracts of Kariba in north Zimbabwe, devastated by trophy hunting and subsistence farmers clearing trees to plant crops, gather firewood and graze animals.

But earlier this month, The New Yorker magazine ran a feature that alleged the Kariba credits were overvalued or worthless. 

The magazine alleges that the sham credits were sold to a network of multinational organisations and zoos, supporting a Guardian investigation in January, revealing 90% of Verra projects were overissuing carbon credits. 

Verra Carbon Projects have been scrutinised, with The Guardian reporting that 90% of Verra projects were overissuing carbon credits. Footage courtesy of @Carbonomix

In its reporting, it called into question the effectiveness of the project’s regeneration, which linked the value of the credits and its calculation.

Shortly after the allegations went public, Verra announced its investigation, eventually leading to South Pole pulling its support and Climate Active suspending applications for new credits.

For its part, Carbon Green Investments, the project’s owner, has vowed to continue the Zimbabwean project.

During an interview with Reuters, Steve Wentzel said it will proceed “without question, in compliance with Zimbabwe’s laws, Verra’s regulations and with an unwavering commitment to our stakeholders”.

In July, Wood Central reported that global experts were working on a new framework to improve trust in REDD+ Forest Projects.

Footage courtesy of @UNClimateChangeEvents

Experts at the BONN Climate Change Conference (SBSTA 58) found that high-integrity forest carbon markets require realistic baseline data to assess the impact of REDD+ initiatives.

For carbon offset to be effective, they must lead to a noticeable reduction in emissions compared to regular business activities, a concept called ‘additionality.’

“There is essentially a contract involved where some parties promise to reduce forest carbon emissions, and other parties promise to provide recognition, rewards, or compensation for that, so we need an accounting system to implement the contract,” said Erin Sills, a professor of forest economics at North Carolina State University and a CIFOR-ICRAF senior associate. 

The push for great accountability has led Verra to develop a new Verified Carbon Standard (VCS) program, which provides near-real-time carbon reporting.

Verra is now developing a new REDD methodology to ensure the integrity of greenhouse gas accounting for individual projects within a jurisdiction, using the most up-to-date science, data, and technologies.


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