Department for Environment, Food and Rural Affairs
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Benn announces Government offsetting code

Benn announces Government offsetting code

DEPARTMENT FOR ENVIRONMENT, FOOD AND RURAL AFFAIRS News Release (47/08) issued by The Government News Network on 19 February 2008

Environment Secretary Hilary Benn today challenged the voluntary offsetting industry to provide strong standards for offsetting products so that they can be part of a landmark Government Code of Best Practice for consumer offsetting products.

Mr Benn today announced the final structure of the Code, which will be backed by a quality mark. Emissions offset through accredited products will be calculated consistently and correctly, and consumers will be provided with clear information and transparent prices.

"If people are trying to reduce their impact on the climate, the first thing they should do is find ways to reduce their carbon footprint. But realistically, there are emissions that can't or won't be avoided, and that's where offsetting can play an important role.

"That's why the Government is developing a Code of Practice and a quality mark for high-quality offsetting products to help businesses and individuals Act on CO2."

Mr Benn said that as a starting point, the Code would only cover offsetting products using Kyoto-compliant credits initially.

"I think it's right that we set a high standard. It's important that consumers who want to buy carbon offsets with confidence can do just that. When a consumer buys a tonne of carbon with the Government's quality mark, they'll know they're buying a full tonne of carbon," he said.

"However, we recognise that credits from the unregulated market may be innovative and of a very high standard. So we're leaving the Offsetting Code open to high-quality voluntary offsetting products, provided the industry can provide a similar level of assurance about the standard of the credits.

"The challenge to the offsetting industry is clear: to establish a clear, rigorous standard for voluntary projects that deals with the concerns that have been raised. We will support them in developing that standard - and when we have the necessary guarantees, we'll include high-quality voluntary offsets in the Code."

The Government's decision recognises the efforts of the industry so far to develop different standards for Voluntary Emission Reductions (VERs), and encourages the industry to come together and build on the existing groundwork.

The principles that will need to be addressed by an industry standard are:

* additionality, meaning that the carbon savings must be in addition to reductions that would be made anyway;

* avoiding carbon leakage, or emissions avoided on one site simply being moved somewhere else;

* permanence, ensuring that emissions reductions were not simply put off until later;

* verification systems for emissions reductions;

* transparency on the methodologies and procedures used; and

* avoiding double counting, ensuring that emissions counted in an offset product are not counted elsewhere, for example as savings through an emissions trading scheme.

Once an industry consensus has been reached on a standard for voluntary credits and it has been fully operational for six months, the Government has asked that an independent audit is carried out.

The Government has appointed AEA to become the accreditation body for the Code, and they will today issue the final draft of the Code for industry comment on accreditation procedures. The quality mark associated with the work is currently being developed, and will be ready to be used when the first products are accredited later this year.

Compliance credits, also known as Kyoto credits, offer consumers a transparent system which allow consumers to trace their offset credits back to the projects that have generated them, and to scrutinise the full audit trail for each project and each tonne of emissions.

The Government Carbon Offsetting Fund, through which ministerial and official air travel is offset, uses compliance credits from renewable energy and energy efficiency projects.

Notes to Editors

1. Defra launched a consultation on its proposed Code of Best Practice on 16 January 2007, and published its response on 13 July 2007.

2. More information on the Code of Best Practice is available at http://www.defra.gov.uk/environment/climatechange/uk/carbonoffset/codeofpractice.htm

3. Offsetting is a way of compensating for emissions produced with an equivalent carbon saving, lessening the impact of a consumer's actions. Consumers can offset a particular activity, such as a flight; their emissions over a period of time, such as their annual car mileage; or across their entire lifestyle or business, including all of the gas and electricity they consume and their emissions from transport.

4. Carbon offsetting involves calculating emissions and then purchasing equivalent credits from emission reduction projects that have prevented or removed the emission of an equivalent amount of carbon dioxide somewhere else.

5. Certified credits are those emission reduction credits that come from the existing compliance market, that is Certified Emission Reductions (CERs), EU Allowances (EUAs) and Emission Reduction Units (ERUs). The Kyoto compliant sector refers to emission reduction projects and measures provided for under the Kyoto Protocol. These are collectively known as 'flexible mechanisms' and consist of the Clean Development Mechanism (CDM), Joint Implementation (JI) and international emission trading schemes. Countries with Kyoto targets to reduce their emissions can use the flexible mechanisms to help them achieve those targets. More information is available at http://www.defra.gov.uk/environment/climatechange/internat/kyotomech/index.htm.

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