Verra has announced progress in addressing unresolved carbon credits linked to 37 rejected rice cultivation projects in China. While 480,000 Verified Carbon Units (VCUs) have been compensated, 4.08 million credits remain outstanding, reflecting broader challenges in ensuring integrity within the voluntary carbon market.
In August 2024, Verra rejected 37 rice cultivation projects and imposed sanctions on the project proponents and validation/verification bodies (VVBs) involved. The decision followed a detailed review uncovering concerns about project methodologies and weaknesses in VVB audits. Of these projects, 25 were found to have over-issued VCUs, prompting Verra to take corrective action.
Two of the four project proponents, Vitol (China) Energy Co. Ltd and Timing Carbon Asset Management Co., Ltd., have compensated for 480,000 VCUs across five projects. However, 4.08 million credits remain unresolved.
Search CO2 (Shanghai) Environmental Science & Technology Co. Ltd is responsible for 2.22 million outstanding credits tied to 10 rejected projects. Verra has suspended its registry account, warning it will be closed unless the over-issued VCUs are compensated.
Similarly, Hefei Luyu Agriculture Technology Co. Ltd is linked to 1.86 million credits across 10 projects. Following the termination of its communications agreement with Shell Energy (China) Limited in September 2024, these projects were moved to an administrative account. Hefei is barred from registering new projects or opening a registry account until compensation is resolved.
This represents the first instance of Verra imposing sanctions of this scale to address discrepancies in project oversight. A spokesperson stated that Verra is taking steps to minimise similar issues in the future and is working closely with stakeholders to address unresolved credits.
Verra is nearing the conclusion of its review of the four VVBs involved in these projects. Non-conformity reports issued by Verra identified deficiencies in the validation and verification processes. Depending on the findings, the VVBs may face suspension from validating or verifying future projects, ensuring stricter compliance with market standards.
“This was the first time Verra imposed such sanctions, demonstrating Verra’s commitment to greater integrity, transparency, and quality in the voluntary carbon market. Verra took decisive action at every level at which concerns were identified. Verra is committed to continual improvement of its standards programmes, particularly as we address issues arising from inappropriate marketplace conduct,” said, Justin Wheler, chief programme management officer, Verra.
