Toitū Envirocare has been operating in Aotearoa New Zealand since 2001. It helps organisations to measure and reduce their carbon emissions and has been issuing its carbon certifications (carbonreduce, net carbonzero, and climate positive) in line with international standards since 2006.
Emissions that can’t be reduced are offset using pre-verified carbon credits. A portion of those carbon credits (7% in the last financial year) have come from New Zealand native forestry projects (the other 93% were sourced from overseas). Over the coming year credits from the New Zealand projects will be phased out and replaced with international credits that meet new best practice standards.
We talked to Toitū Envirocare's Senior Technical Advisor, Stewart McKenzie and Marketing and Communications Manager Tobias Tripp to find out more.
Q: Why has Toitū decided to stop using New Zealand carbon credits?
A: We’re aligning ourselves with a new benchmark for the quality of carbon credits. In the past the integrity of carbon credit projects around the world has often been challenged. In 2020 an international organisation called the Integrity Council of the Voluntary Carbon Markets (ICVCM) was set up to address this. It has developed new international best practice standards with an emphasis on transparency, global applicability and additional environmental or social benefits.
The New Zealand carbon credits currently available for offsetting are from government schemes - the Permanent Forest Sink Initiative and the upcoming Permanent Post 1989 scheme. They were established for the New Zealand Emissions Trading Scheme and are tailored to meet national compliance policy goals and legal requirements.
This is no longer deemed best practice in what is called the Voluntary Carbon Market, where businesses voluntarily choose to offset their emissions. This market adheres to more stringent international best practice and Toitū Envirocare is committed to ensuring alignment with this.
We spent considerable time and effort exploring options to continue using New Zealand credits but have decided to transition away from them.
Q: Why are quality standards and best practice so important for carbon credits?
A: Market expectations for carbon credits have changed. Our members rely on our services to ensure that we are providing best practice that meets international standards. They also trust that we will issue certifications using offset services that are aligned to leading practice. Businesses expect our position to be defensible both technically and more widely through stakeholder perception. It is really important we keep pace with changes overseas so we can ensure that claims by our members around carbon offsetting stand up globally.
Q: How does this link with previous "dodgy" international credits?
A: They have been one of the reasons to create a global standard. The work of the ICVCM over the past two years shows a growing maturity and awareness in the carbon offsetting market for transparency, credibility and integrity. However, we have not had that issue. We have a strict validation criteria at Totiū Envirocare so “dodgy” credits have always been excluded.
Q: Are efforts being made to make New Zealand schemes comply?
A: Not yet. At this stage it’s not clear what entity would take ownership of that process and foot the bill. It’s going to be challenging and may take considerable time.
Q: Is that something Toitū could do?
A: Our initial intention is to shift away from New Zealand carbon credits. We see the next phase as a collaborative effort to create a discussion that could help align New Zealand projects with global standards. This year we will look to bring together industry leaders, organisations, and experts who would like to see New Zealand carbon credits, particularly from indigenous afforestation projects, meet the international standard.
Q: What does this mean for businesses in the Toitū programmes?
A: We have signalled to our Toitū members that we will transition out of using credits issued from the New Zealand Permanent Forest Sink initiative and Permanent Post 1989 scheme. Timing for this transition is planned for early 2024, once we see carbon credit standards approved by the ICVCM. We anticipate a minimal impact on the cost of buying carbon credits. Some of our members will be holding existing ‘reserved' New Zealand credits. We will still honour the use of these for offsetting, and back the related certification claim, as part of the transition.
Q: Is this a shift away from pine towards indigenous long-life schemes?
A: Our decision didn’t cover that. We weren’t looking at indigenous versus exotic although we’re expecting that something around that may be included in the ICVCM standard. It’s also possible forestry might struggle to meet the new criteria in some cases. While forestry carbon credit project types feature strongly in New Zealand there are dozens and dozens of other project types operating under standards available overseas. It’s also worth noting that Toitū Envirocare never offered those projects, favouring projects that were centred on native regeneration.
Q: What advice would you give to businesses thinking about offsetting?
A: First off, assess and understand your business's emissions impact across your entire value chain. Then make a thorough plan to avoid emissions or reduce them in line with science based targets. After that, and only then, can you look at the remaining emissions to offset with good quality credits aligned to your values. And then you repeat the process each year, making changes and improvements wherever possible. Our clients tell us our programmes give them the framework to get started. You don’t have to be perfect. The main thing is to start taking action. It doesn’t matter if you have a few fails. Build on those rather than putting things off. On average, our members achieve over 35% reduction in emissions in a three-to-five-year period.
More about Toitū Envirocare
Toitū’s climate positive, net carbonzero and carbonreduce certification programmes provide independent verification and validation of greenhouse gas emissions measurements, management and reduction plans, and offsets in accordance with international standards. Find out more here.
Image credit: Phil Crawford