Pilot launched to tackle risks around carbon removals being ‘reversed’
Verra will trial insurance and investment models to reduce upfront costs associated with removed emissions being re-released
Carbon registry Verra is trialling new ways to deal with the reputational and accounting risks posed to companies from ‘reversed’ carbon removals.
Reversals happen when carbon that has been removed from the atmosphere, and consequently generated a carbon credit, is re-released as a result of events like forest fires.
To combat the issue, Verra has this week issued a call for carbon removal projects that can participate in a three-year pilot of “novel” approaches.
The options will include insurance policies that are triggered when reversals take place, and funds that ringfence a portion of project revenues to buy spare credits.
In the past, Verra has asked project developers to contribute to a pool of surplus carbon credits that can be tapped to compensate for unexpected losses, but that model can incur a lot of upfront cost for project developers.
Projects participating in the pilot will be given an “innovation” label by Verra, which also serves as a standard-setting for the voluntary carbon markets.
The non-profit found itself in hot water over its compensation model for offsets this week, when media outlet Climate Home News alleged it had “used nearly a million ‘hot air’ carbon credits to compensate for bogus offsets”.
Vera is reportedly grappling with a surge in the need for new credits to compensate for dodgy ones.
The rise of carbon removals
Carbon removals continue to be a focus for large corporations with climate pledges, who are increasingly giving up on using offsets.
A coalition of big companies including Google and Shopify has just signed a $44.2m agreement with Nulife, which specialises in converting biowaste into oils that allow it to store CO2 in licensed salt caverns. The deal is expected to remove 122,000 tons of carbon for the firms between now and the end of the decade.
And on Wednesday, Microsoft signed yet another deal, which promises to remove more than 28,500 tonnes of carbon in Brazil by 2028, via rock-weathering.