Gazprom Method for Voluntary Forest Credits Wins OKCatherine Airlie
Gazprom Marketing & Trading, a unit of the world’s largest natural-gas producer, said its method for generating carbon credits from forestry projects was approved by the Voluntary Carbon Standard.
The International Emissions Trading Association and the World Economic Forum helped develop the voluntary carbon standard in 2005 to verify which credits companies can use to comply with carbon-reduction programs. The European Union, which runs the world’s biggest emissions market, may accept a limited number of forestry credits through 2020.
Policy-makers are working on ways to create carbon credits for projects tied to reducing emissions from forest degradation, believed to be one of the main contributors to climate change. So-called REDD credits, excluded from the 1997 Kyoto Protocol, will be on the agenda in December when about 190 nations meet in Cancun to discuss extending or replacing the international climate treaty.
“The approval of a methodology like this has real potential to be a game-changer in forest conservation,” Keith Martin, commercial director of Kingston, England-based Gazprom Marketing & Trading, said today in an e-mailed statement. “The gauntlet is thrown down to the negotiators at Cancun.”
Removing trees, which absorb carbon dioxide, may account for as much as 20 percent of manmade greenhouse-gas emissions, according to the Intergovernmental Panel on Climate Change.
Challenge in Cancun
Gazprom’s method will produce REDD credits in the Rimba Raya Biodiversity Reserve in Borneo, southeast Asia. The area is made up of 100,000 hectares (250,000 acres) of tropical peat swamp forest and wetlands next to an area of expanding plantations, according to Gazprom’s statement.
The project will create as many as 75 million metric tons of emission reduction credits over the next 30 years, Dan Barry, Gazprom’s director of global carbon trading, said today in an e-mail response to questions. They could be valued at as much as 600 million pounds ($932 million) at today’s price for United Nations offsets, or Certified Emissions Reductions.
“The Rimba Raya carbon credits, however, are likely to trade at a discount to the ones that are eligible for the UN schemes at the moment due to the nature of the voluntary market,” Barry said. Prices would rise if forestry credits are accepted internationally as a way of curbing emissions.
Brazil, Indonesia, the Democratic Republic of Congo and Nigeria may be the top producers of REDD credits, according to analysis from Barclays Capital. The four countries have generally supported a REDD-based mechanism and account for more than 900 million tons of carbon dioxide emissions annually as a result of cutting down trees. That’s about the same emissions spewed from 50 average-sized coal-fed power stations each year.
Gazprom and the New York-based Clinton Foundation funded the research of the methodology, which was developed by InfiniteEARTH and written by Winrock International. The proposal to curb emissions from forests was audited by the Rainforest Alliance and Bureau Veritas Certification.
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