Suspended developers rally to call for swifter resolution from Verra

(Updates Verra' comment in final section)

Quantum Commodity Intelligence – Multiple carbon project developers have complained that US-based registry Verra is continuing to experience months-long delays after their projects were suspended from issuing new credits, in turn cutting the flow of money and threatening project activities in some cases.

Verra began experiencing delays in 2022 after initiating secondary reviews on audits conducted by auditors, known as validation and verification bodies (VVBs), and as the number of projects boomed following a price rise the previous year.

2023 was marked by suspensions at well-known REDD+ projects following media accusations that a large majority of credits are worthless, which have since been strongly rebutted by several researchers.

A report about the Kariba REDD+ project in Zimbabwe followed, while investigations by two NGOs led to the suspension of the Southern Cardamom REDD+ project in Cambodia and Kasigau Corridor in Kenya later in the year.

In September, Verra put four REDD+ projects in a single area of Brazil 'on hold' following a legal case started by a local public defender.

Industry sources said controversies around REDD+ and carbon trading are nothing new, but that in the past year, Verra has been much quicker to suspend projects when critical articles appear in the media.

A source said the US-based registry had been "caught between a rock and hard place" as it responds to accusations that should have been captured in audits conducted by VVBs and also trying to signal that it takes the public debate around REDD+ seriously and maintaining alignment with its rules and the faith of its stakeholders.

However, several developers have told Quantum in recent weeks they have felt "thrown under the bus" even as the scrutiny around their projects intensified, forcing investors to flee and carbon credit deals to be dropped.

Canada-based developer RMDLT, for instance, said it has received no communication from Verra following the suspension of its project in Brazil (VCS977) last September.

The developer said it has felt "stonewalled" even as it had to stop some of the project's activities in the Amazon rainforest due to tight finances, in turn threatening the very sustainability of the scheme.

RMDLT is backed by several small investors and says it lacks a "white knight" to sustain the scheme as the Verra process unfolds.

"This project has been ongoing for over 13 years and has been the subject of two previous verifications and validations by Verra, and we have provided accurate information based on legal and professional consultants, to support our project," said RMDLT in a letter to the standard, seen by Quantum.

"Over a period of six months following submission of the RMDLT verification documents, we made continual follow ups with Verra and received no substantive response."

'Shameful cut and paste'

"What we did receive from Verra was responses such as 'We are working on verification review of project ID 0977. You should receive the results of the review as soon as possible.' This is a shameful cut and paste response with absolutely no progression or advancement by Verra."

In the latest update from Verra, RDMLT said a review was supposed to be completed by January 31, but that it has received no questions to date and that nearly a year has now elapsed since first submitting the paperwork to verify its latest vintage.

"Our issue is the nature of the review process where any potential false allegation has maximum weight and RMDLT (the alleged accused) has no opportunity to defend or respond to whatever the issues are."

"Each day that passes without resolution of this matter has a negative reputational effect on the project," RMDLT concluded in its letter.

In December, Cambodian developer Wildlife Alliance, which had its VCS1748 project suspended in June, publicly called out Verra for the same motive.

"The absence of clear processes and timelines for Verra's quality review is causing the project and its stakeholders harm," said the developer in a letter.

"It stands in contrast to the approach taken by other standards and certification systems to similar matters."

Several other companies have privately confirmed qualms about the review process for their own schemes, with one noting no communication from the standard and a lack of information about what is required to solve the situation.

Sources said that, once Verra has made a decision on a case, it sends its conclusions to an auditor, thereby adding to the delays.

Verra response

Verra meanwhile told Quantum that "the steps in a review, as well as the timeline for completing the review, depend on the underlying facts and circumstances, the complexity of the issues, the cooperation of third parties such as the project proponent and validation/verification body, and other factors."

"A review may take several weeks or months to complete. While every review is different, Verra aims to conduct an appropriately scoped review as expeditiously as possible."

Some industry sources with knowledge of the matter have privately said that each suspension is complex in its own right, especially when there is a dispute of ownership rights over the lands in which a REDD+ project has been developed, as is the case of some suspended projects.

Separately, on Wednesday, the US-based registry confirmed in a public webinar its intention to publish a service-level agreement (SLA) lifecycle process "to provide better service, consistency, and transparency to our stakeholders in the project review process."

"In short, this means project proponents will know how long a project review will take from the outset," it said.

The registry also intends to offer developers a project tracker that could be ready as soon as March, which will offer granularity on the status of the project's review, offering details on what has been done and where works stand.

Moreover, Verra said it will also create a new stakeholder support team that will reply to questions from developers within 72 hours.