Nine Projects Produced ‘Problematic’ Carbon Credits In ’24, Says Report

An analysis of the global voluntary carbon market found that despite efforts to improve their integrity, millions of carbon credits retired in 2024 were unlikely to result in additional emissions reductions. Nine out of the 47 largest projects which produced “problematic credits” were located in India, the report, released by the civil society organisation Corporate Accountability, found.

The voluntary carbon market (VCM) allows companies to trade carbon credits in an effort to drive down emissions. In the VCM, each carbon credit represents a reduction of 1 tonne of carbon dioxide or its equivalent. These reductions are supposed to be “additional,” meaning they would not have occurred without the support of funding from carbon credits. In simple terms, if a project would have come up in a business-as-usual scenario without being financed by carbon credits, the project does not have additionality.

According to the report by Corporate Accountability, however, 80% of carbon credits issued from 47 of the biggest projects “could not be reliably counted on to deliver the promised emissions reductions.” This, despite reforms introduced into the VCM to improve transparency and accountability of projects promising reductions.

These shortcomings include credits being non-additional, non-permanent, over-crediting or having a risk of leakage (where reductions achieved are counteracted by emissions elsewhere). The voluntary carbon market “still cannot be relied on to deliver the promised (and urgently needed) global emissions reductions,” the report noted.

Projects not additional

The report shortlisted 47 projects out of the top 100 which were rated by BeZero, a carbon rating agency that assesses the quality of carbon projects based on their likelihood of achieving the removal or avoidance of one tonne of carbon dioxide or equivalent. “The 47 projects assessed in this research alone equated to nearly one quarter of all retired credits in the VCM in 2024. So, assessing these projects allows us to assess more generally how effective the VCM is at reducing emissions, and how effective any attempts at plugging the holes have been thus far,” Rachel Rose Jackson, Director of Research and International Climate Policy at Corporate Accountability, told Mongabay India over email.

Of the approximately 207.8 million offsets credits which were retired in 2024, around 47.7 million credits were found to be problematic by Corporate Accountability. These credits were issued from 43 projects (out of the 47 that were assessed), whose likelihood of emissions reductions ranged from moderate to very low.

Nine “problematic” projects in the hydropower, solar, and wind energy sectors, which together accounted for 7.7 million retired credits in 2024, were located in India. “Additionality mostly boils down to the investment viability of a renewable energy project,” said Trishant Dev, Deputy Programme Manager of Climate Change at the Centre for Science and Environment (CSE), who did not contribute to the Corporate Accountability report.

“When a project is paid for by the project developer or by other means, it’s wrong to claim additionality by saying that the project would not have existed had it not been for the carbon market. However, whether this is the case varies from project to project,” he added.

A report by the CSE from 2023 found that for several renewable energy projects, the carbon market paid for only 3-4% of the project’s costs, casting doubt on their additionality.

Of the nine India-based projects included in Corporate Accountability’s report, the bundled solar photovoltaic project by ACME, and three other renewable solar power projects by ReNew, SB Energy Private Limited, and Greenko Group were found to have a “very low likelihood” of achieving carbon avoidance or removal.

The Karcham Wangtoo Hydroelectric Plant in Himachal Pradesh, a 48,300 megawatt wind energy plant by Green Infra Wind Energy Limited, the Vishnuprayag Hydro-electric Project by Jaiprakash Power Ventures, a renewable wind power project by the Adani Group, and another 57,300 megawatt hydropower project by JHPL were found to have a “low likelihood” of reductions.

Large-scale grid-connected solar and wind projects are likely not additional because such projects “are already highly incentivised. This implies that any emissions reductions would have happened anyway and are not ‘new,’” the report noted. Several of these projects were also rejected for approval by the Integrity Council for the Voluntary Carbon Market, for failing to adhere to their “core carbon principles.” These principles are considered a benchmark for high quality, high integrity credits, covering aspects of transparency, additionality, permanence, and their contribution to net-zero targets.

Reforms in the voluntary carbon market

The most “problematic” projects were hosted by the Verra, a carbon credit registry responsible for tracking and managing carbon credits for trade. In 2023, Verra was caught in a scandal when it was discovered that most rainforest-based credits did not deliver on claimed emissions reductions.

The scandal prompted reforms in the voluntary carbon market, which included introducing more stringent standards and changes in credit calculations, which are aimed at improving transparency and accountability. Bodies such as the Integrity Council for the Voluntary Carbon Market and carbon rating agencies have also taken a more prominent role in verifying the effectiveness of credits.

“It’s important to understand that, for decades, the VCM industry has been periodically launching new methodologies and fixes in an attempt to plug loopholes and assure investors. Yet for decades, these initiatives haven’t led to a VCM that reduces emissions in any meaningful way,” said Jackson.

In a statement, Verra’s CEO Mandy Rambharos said Corporate Accountability’s report “fails to account for the nuance and complexity of how these projects function, particularly given that many were developed under methodologies that have since been updated.” Verra is yet to register projects under some of its recently updated methodologies which have already been approved by the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles, she said in response to the report’s criticisms. “Progress in carbon markets, like in any complex system, doesn’t unfold neatly in headlines or quarterly snapshots. It builds over time: through reform, iteration, and scientific scrutiny. And that change is underway, methodology by methodology, project by project,” said Rambharos.