Guardian Verra Article Draws Mixed Response, Claims of Mischaracterization

March 10, 2023

A forthcoming revision to Verra's REDD+ project methodologies has been in the works for years and is not due to faulty credit issuance allegations made earlier this year by The Guardian, the company said in response to an article published Friday by the U.K. newspaper.

Along with Verra -- the world's largest carbon credits standard setter -- some voluntary carbon market stakeholders on Friday said The Guardian mischaracterized efforts to revise the rules for the popular rainforest offsets program.

In an article titled "Biggest carbon credit certifier to replace its rainforest offsets scheme" the paper said "Verra will phase out [its rainforest offset] programme by mid-2025 after a Guardian investigation found it was flawed."

A Jan. 18 report published by The Guardian, Germany's Die Zeit weekly and the nonprofit journalism outlet SourceMaterial alleged that more than 90% of rainforest offsets approved by the world's largest carbon registry were worthless. Verra has denied the claim.

The Guardian did not immediately return a request for comment on Friday.

Verra spokesperson Steve Zwick told OPIS in an email that the organization's methodology revisions had been planned from "from the earliest days of the Verified Carbon Standard, but there wasn't enough data to do risk mapping at a jurisdictional level."

Zwick also pointed to Friday comments made on LinkedIn by global management consulting firm Bain and Co. Expert Associate Partner Henning Huenteler, who said The Guardian article "clearly creates a wrong impression. The new methodology has been in development for some time already, as can be easily verified on their website."

Huenteler's post was just one example Friday of numerous comments and discussions the article sparked on social media.

Also taking to LinkedIn, climate consultancy Founder Zubair Zakir said the paper's coverage of Verra is "a mindless and constant assault on anyone trying to do something. So much so that most material consumed by the public is negative and an insane proportion of practitioners' time is spent not working on climate mitigation. Some might call that a PR coup."

The Guardian article also received posts of praise and support.

"Big win against greenwashing!" environmental watchdog Earthsight said in a Twitter post that reshared the article. "Following an investigation which revealed over 90% of rainforest carbon offsets issued by Verra to be worthless, the world's biggest carbon credit certifier has announced plans to replace its forest offsets programme."

Zwick said the changes are not a full program replacement, but "'transition to' [new standards] is the phrase Verra has been using for years."

Verra earlier said the new project development protocols will be released in the third quarter of this year.

In March 2022, Verra launched a 60-day comment period to receive feedback "on changes to tools for estimating emission reductions from key REDD+ project types," according to a company news release at the time.

In late January - a couple of weeks after The Guardian published its initial article -- Verra CEO David Antonioli said at a webinar that the registry had been working on the consolidated methodology for REDD+ projects.

In the early days of REDD, he said, Verra had enabled the creation of various methodologies to see how different approaches would work.

The new protocol will ensure that forest conservation credits issued under the VCS program maintain the highest level of integrity, the registry said later.

Important innovations of the new methodology will strengthen the vital role of projects in mitigating climate change and reducing the loss of critical forests and biodiversity, it added.

In the interim, Verra plans to issue errata and clarifications as well as minor updates to the current VCS Avoiding Unplanned Deforestation and/or Degradation (AUDD) methodologies (VM0006, VM0007, VM0009, VM0015, VM0037).

"These changes reflect Verra's ongoing commitment to align methodologies with current best practices and to ensure that methodologies are applied consistently," the registry said in an online post.

--Reporting by Henry Kronk, and Abdul Latheef,
--Editing by Bridget Hunsucker, and Jeff Barber,

© 2023 Oil Price Information Service, LLC. All rights reserved.

Washington Q1 Cap-and-Invest Auction Sells Out, Settles at $48.50/mt

March 7, 2023

The inaugural Washington Cap-and-Invest Program auction settled at $48.50/metric ton and sold out of 6.2 million Washington Carbon Allowances, according to official auction results published Tuesday.

Following the news, the Nodal Exchange WCA V23 December 2023 futures contract increased sharply, trading as high as $50/mt after trading at $49/mt and $48.50/mt.

One WCA market participant said Tuesday "we are just getting started."

Without a clear price signal ahead of the first auction, WCA secondary market trade prices were mostly still since the start of the program Jan. 1. Bids and offers were noticeably wide and just a few trades were done, ranging between $39-$42/mt on the Nodal Exchange.

On Monday, OPIS assessed the WCA V23 forward price in line with the most recent trades at $43/mt, $5.50/mt below the settlement price.

Illustrating the prevailing sentiment among stakeholders, a refiner told OPIS they were in "wait-and-see" mode ahead of the first auction, concerned that pre-auction secondary market trades around $42/mt were above true market value.

The settlement price was in line with a price forecast published last year by analyst firm Vivid Economics and commissioned by the Washington Department of Ecology.

The department's auction results provided a first look at participants in the budding Washington carbon market. Some 56 entities were approved as "qualified bidders," entities that applied for the auction and submitted a bid guarantee.

The results did not include specific participation or bidding activity of those participants. The Department of Ecology said it will issue a Washington Auction Public Proceeds Report on March 28 detailing revenue raised by the auction.

For the first quarter auction, 6,185,222 million WCAs were offered. The 2023 auction reserve price is $22.20/mt and the ceiling price is $81.47/mt. The ceiling price will rise each year by 5% plus the rate of inflation.

WCA futures contracts began trading on Nodal on Dec. 5, 2022, and the first trade was done at $39/mt for the V23 December 2023 contract. The Intercontinental Exchange on Feb. 21 announced it will offer WCA futures contracts for trading beginning on March 27.

The Washington Cap-and-Invest Program Q2 auction is scheduled for May 31.

Washington is currently accepting public feedback on a potential linkage with California and Quebec's joint Cap-and-Trade Program, a decision Washington lawmakers said they expect to decide as early as this summer.

The California-Quebec program's Q1 auction of 2023 sold out of the 56.4 million current vintage California Carbon Allowances on offer and settled at $27.85/mt.

-- Reporting by Slade Rand,
--Editing by Kylee West,; Bridget Hunsucker,; and Christie Citranglo,

© 2023 Oil Price Information Service, LLC. All rights reserved.

Danish Renewables Giant Orsted to Build Large-Scale Solar Project in Texas

January 13, 2023

Danish renewable energy company Orsted on Friday announced plans to build a 471-megawatt onshore solar facility in Texas.

The 4,900-acre Mockingbird Solar Center will be able to generate enough clean energy to power more than 80,000 homes annually, making it the largest solar photovoltaic project in the company's portfolio, Orsted said.

The company has taken a final investment decision on Mockingbird and construction will start this month, with completion expected in 2024, it said.

"Adding almost half a gigawatt to our portfolio, the decision to build Mockingbird represents an important milestone for our onshore business and for our expansion in solar PV," David Hardy, CEO of Orsted Americas, said in a news release.

Dutch health and nutrition company Royal DSM will buy a share of the power from Mockingbird under a 10-year power purchase agreement signed in 2021, Orsted said.

The company also said that about 1,000 acres of land adjacent to the project will be donated to The Nature Conservancy to protect native prairie grasses in north-east Texas. Less than 1% of the original grasses of Texas survive today, and less than 5% remains nationally, it said.

Orsted has a growing global portfolio of wind, solar and clean hydrogen projects and is on track to reach 17.5 gigawatts of onshore capacity by the end of 2030.

It has an ambition of installing 50 GW of renewable energy by the end of this decade including 30 GW offshore wind.

--Reporting by Abdul Latheef,
--Editing by Jeremy Rakes,

© 2023 Oil Price Information Service, LLC. All rights reserved.