NEW YORK: Amazon has become the first company to sidestep a global standard for verifying carbon offsets that was developed by a non-profit funded largely by the US technology conglomerate’s founder and executive chair, Jeff Bezos.

Amazon is backing the development of a new standard that could allow the online retailer and cloud-computing provider to overcome a dearth of supply for quality-labelled offsets, enabling it to meet its target of cutting its greenhouse-gas emissions to zero on a net basis by 2040.

Critics worry that the move could lead to market confusion and a compromise in the standards of carbon offsets.

Companies under pressure to curb their emissions can buy credits from developers of projects that absorb carbon, such as through reforestation. The market for offsets has remained small due to a limited number of projects that can verify their climate benefits.

Amazon told Reuters it has completed work on Abacus, a framework for verifying the quality of carbon offsets in reforestation and agroforestry.

Amazon developed the standard with carbon registry Verra as an alternative to one developed by the Integrity Council for the Voluntary Carbon Market (ICVCM), the world’s biggest grouping of private sector and environmental groups dedicated to validating carbon offsets.

Verra first announced it was developing the label with Amazon and its Abacus working group in 2022.

Bezos, through his US$10bil Earth Fund that he set up to tackle climate change, is one of ICVCM’s biggest donors, having ploughed at least US$11mil into ICVCM and sister organisation Voluntary Carbon Markets Integrity Initiative since their 2021 launch.

Jamey Mulligan, Amazon’s head of carbon neutralisation, said in an interview that the company evaluated and supported ICVCM’s work, but that it wanted a more ambitious standard.

“We want to ensure that every credit investment has a real, conservatively quantified and verified impact on emissions,” Mulligan said. He declined to comment on whether Bezos was involved in Amazon’s decision.

Bezos could not be reached for comment. Alphabet, Meta, Microsoft and Salesforce have said they plan to buy up to 20 million tonnes of Abacus-certified credits.

Pedro Martins Barata, co-chair of ICVCM’s panel of experts, said he was worried about development of an alternative standard and that he hoped that Abacus would eventually be folded into ICVCM.

“Otherwise, you get again into a confusing state in the market where each set of companies will find their own standards they want to support and they will say that they’re a particular type of quality,” he said.

Martins Barata added that ICVCM was reviewing Verra’s methodology for developing carbon offsets from agroforestry and reforestation projects, and that if it approves it this could make the Abacus label compatible with ICVCM’s label.

Kelley Kizzier, director of corporate action and markets at Bezos Earth Fund and a member of ICVCM’s board, said Abacus is complementary rather than competitive to ICVCM. She also declined to comment on Bezos’ role.

“What we need to focus on is generating high-integrity (offsets). There is room for lots of actors to do that,” Kizzier said.

The label will be available within weeks, Verra said.

The US$2bil market for voluntary carbon offsets has remained small amid concerns by companies and investors that the underlying projects may not curb as many emissions as they claim.

The market accounts for offsetting 300 million tonnes of emissions annually, according to an Environmental Defense Fund analysis of data from financial information provider MSCI. Yet only a fraction of those offsets are verified, with ICVCM’s main quality label, CCP, accounting for 27 million tonnes.

 - Reuters