Make the right choice for carbon offsetting

More and more Swedish companies, organisations and private individuals are opting to voluntarily offset greenhouse gas emissions caused by their activities.

However, some parts of the market for carbon offsetting have no control system and are littered with dubious players, according to the Swedish Energy Agency. The Agency recommends that anyone wishing to offset their own carbon footprint should use the reduction units governed by UN or EU regulations.

There are at present two options for anyone wishing to offset greenhouse gas emissions from their activities: to buy a carbon reduction unit governed by UN or EU regulations, or to buy one through an unregulated market. However, the unregulated market is not transparent and contains some dubious players, according to the Swedish Energy Agency. "At present it is hard to check whether the reduction units on the unregulated market genuinely do reduce emissions," says Thomas Korsfeldt, Director General of the Swedish Energy Agency.

The rapid expansion of the carbon offsetting market has meant that reduction units are being sold that have not been controlled, inspected or registered. Reduction units are even available from projects that are non-existent or not even planned. Moreover, unreasonable pricing and inappropriate sales methods also occur at times. At the present time, the Swedish Energy Agency cannot recommend that companies, organisations and individuals wishing to offset their carbon emissions buy reduction units from the unregulated market.

"Instead we recommend that anyone wishing to offset their carbon footprint should buy reduction units from projects being conducted in line with the Kyoto Protocol's two project-based mechanisms, CDM and JI, as well as emission rights from the EU's Emission Trading Scheme," says Bengt Boström, Unit Manager for the Swedish Energy Agency's Climate Policy Unit.

The Swedish Energy Agency also believes that a control and registration system should be set up for the unregulated market, and that some form of company authorisation or regulation should be introduced.

"There could be some good, serious projects being carried out in the unregulated market. It should be possible to identify those and establish control systems," says Thomas Korsfeldt.

About UN and EU regulations

CDM and JI are regulated in the Kyoto Protocol and are based on the implementation of actual projects in developing countries (CDM) or Transition Economies in Eastern Europe (JI). Energy rationalisation or new electricity production based on renewable energy, which helps reduce greenhouse gas emissions, are examples of CDM and JI projects. Independent accredited controllers conduct an in-depth inspection both of proposed projects and the reduction units that are generated. Both the projects and the reduction units are registered digitally (with unique identity numbers) and can therefore be traced.

Emission rights from the EU's Emission Trading Scheme constitute a distinct proportion of European industry's limited scope for emissions. The scheme is assured in three ways. Firstly, reported emissions are scrutinised and checked by independent accredited controllers and authorities. In addition, each emission right has a unique identity number. Finally, the rights are issued and nullified in special digital registers built by the EU within the framework of Kyoto Protocol regulations.