Australian businesses have bought into a carbon credit scheme that promised to regenerate Zimbabwean forest but is now under investigation for allegedly selling worthless emissions offsets.
Key points:
- Australian businesses have used Kariba REDD+ Forest Project credits to offset their emissions
- The scheme promised to reforest a vast tract of Zimbabwe's north
- It is now under international investigation over allegations it sold worthless credits
Origin Energy, KPMG, and Zoos Victoria are among the entities that bought credits from the Kariba REDD+ Forest Project, which is being investigated by international greenhouse crediting organisation Verra.
The credits have been used to offset emissions from Queensland electricity generation, housing construction in Brisbane, and "responsible travel" in Tasmania.
Australia's official carbon assessor, Climate Active, has frozen applications from businesses wanting to use Kariba credits to offset their emissions.
The scheme promised to reforest a vast tract of Kariba in north Zimbabwe which had been 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.
Allegations worthless credits sold
The magazine alleged three million worthless credits were sold around the world to major international companies and a network of zoos in Australia.
In its reporting, The New Yorker called into question the effectiveness of the project's regeneration, which is directly linked to the value of the credits, and the way they were calculated.
Shortly after the allegations went public, Verra announced its investigation.
Swiss carbon consultancy South Pole, which marketed the credits to Australian firms, has denied the allegations. The firm said it followed guidelines set by Verra.
But last week it said it was ending its relationship with the Kariba project.
The scheme's owner, Carbon Green Investments, has rejected allegations of mismanagement.
The former chair of Australia's carbon projects watchdog Professor Andrew McIntosh said in extreme cases, companies could face allegations of misleading customers if they were found to use flawed offsets.
Firms deny misleading customers
The Australian businesses, including Zoos Victoria, eco-friendly salary packaging company Simplygreen and adventure travel Tasmanian Expeditions, told the ABC they are working with Climate Active and Verra.
They denied misleading customers or any suggestion they knew about problems with Kariba credits before they bought them.
Some of the businesses directly linked the carbon reduction of specific operations to the purchase of Kariba credits.
Frasers Property offered new home buyers in Brisbane the chance to make construction of their houses carbon neutral through purchase of credits from Kariba and another unrelated Australian project.
Customers buying Frasers homes in the Minnippi Quarter at Carina in the city's east could make a "donation" of between $800 and $1,000 so Frasers could buy the credits and then cancel them to ensure carbon neutral construction, according to advertising on the Frasers Property website.
Frasers Property told the ABC it was made aware of Verra's probe by Climate Active.
A spokesperson for Frasers Property said Climate Active would decide about the eligibility of their Kariba offsets after the Verra investigation.
The spokesperson said they would cooperate with Climate Active and that Frasers Property had contacted the firm that sold the credits for advice.
'We assumed they were reputable'
Salary packing operation Simplygreen said it had only bought a small number of credits in 2022 before the allegations surfaced, and that the credits were not associated with its carbon neutral status.
"We assumed the credits were reputable as they had so many large organisations across the world (such as Nestle) using them," a spokesperson said.
Zoos Victoria, which claims to have been the first zoo network in the world to be carbon neutral, 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 subjected to modelling,'' a spokesperson said.
"We determine the offset integrity based on the Australian Government's assessment through the Climate Active program."
KPMG, which has been certified carbon neutral by Climate Action since 2019, said it was made aware of the Verra investigation on October 25.
A KPMG spokeswoman said it was monitoring developments closely.
"KPMG will adhere to Climate Active's guidance as to whether these projects will continue to be considered an eligible offset unit under the program and will follow any direction regarding the treatment of prior approved claims of where these credits have been used,'' the spokeswoman said.
'Disappointed' by allegations
Origin Energy had 17,000 Kariba credits covering 2021 to 2022 which were "retired" in advance in 2021. The credits were used towards its Climate Active products — natural gas, electricity and LPG.
An Origin spokesperson said the company was disappointed by the allegations.
They said Origin had acquired Kariba credits based on the information available at the time, including its Verra certification, and the assessments of independent ratings agencies.
"We note Verra's investigation is ongoing and we will consider our position as more information becomes available,'' the spokesperson said.
The spokesperson said Origin had a range of products which had been certified by Climate Active as meeting requirements of Climate Active standards and these were reviewed on an ongoing basis.
Tasmanian Expeditions said it had bought the credits through South Pole. A spokesperson said they were put towards "positive impact projects".
A spokesperson said the company was made aware of the allegations against Kariba in early 2023 and immediately consulted South Pole, which "strongly refuted" the allegations.
The company declined to say how many credits it purchased.
South Pole no longer confident in Kariba
A spokesman for the Climate Change Department said it had suspended processing certification applications to use Kariba offsets until Verra had finished its investigation.
The spokesman said, Verra programs provided a path to corrective action when Verra has concerns about a project's integrity and how it impacts the integrity of its programs.
On October 28 South Pole issued a statement saying it was not confident that the Kariba project met the standards it expected from its partners.
It said carbon credits and certifications would be the responsibility of the project's owner Carbon Green Investments.
Carbon Green Investments has vowed to continue the project.
The director of CGI Steve Wentzel told Reuters news service the project would still proceed "without question, in compliance with Zimbabwe's laws, Verra's regulations and with unwavering commitment to our stakeholders".
Carbon credits are supposed to be generated through certified projects like forest regeneration that capture carbon or avoid emissions.
The credits from the projects can be purchased and then retired by entities to cancel out their carbon emissions.
REDD+ stands for reducing emissions from deforestation and forest degradation in developing countries.
The + stands for additional forest related activities that protect climate, like sustainable management and conservation of forest carbon stocks.