LONDON Firms that audit greenhouse gas-cutting projects approved under a Kyoto Protocol carbon offset scheme received poor grades from green groups for a second year, a report said on Monday.
Unqualified and insufficiently trained personnel was cited by WWF and Germany's Oeko-Institute as a problem plaguing emissions auditors, accompanied by ambiguous scheme rules and a general failure to show that the clean energy projects they approved would not be feasible without getting carbon offsets.
The Clean Development Mechanism (CDM), a $2.7 billion scheme under Kyoto, lets companies invest in emissions cuts in emerging nations and in return get offsets once the projects are verified by auditors called Designated Operational Entities (DOEs).
The report found that the CDM's executive board demanded more corrections in documents submitted by auditors this year than in 2009, a sign that could indicate DOEs are making more mistakes or that the board has increased scrutiny over projects.
It analyzed decisions made by the board between April 2008 and March 2010 on projects validated by five major emissions auditors, and assigned each a grade between A and F.
Germany's TUEV-Nord scored the highest grade with a D, while Bureau Veritas Certification received an F and DNV, SGS-UK and Tuev-Sued, all of which were suspended by the U.N. in the past two years, got E+ ratings.
The auditors received similar ratings in 2009.
An English language version of the report can be downloaded here
Tuev-Sued was suspended in March, and remains suspended, following spot checks made at their offices. SGS-UK were temporarily suspended in 2009 and DNV in late 2008.
Tuev-Nord passed spot checks made in March.
U.N. data shows these five DOEs account for 80 percent of the over 6,200 projects validated by auditors so far, and have verified 95 percent of those that have received offsets to date.
The five firms have also audited 132 of the 150 projects rejected by the board.
The report comes days before the U.N. will publish findings from a panel meeting which could spark major changes to the CDM.
The most profitable projects registered under the scheme have been accused by green groups including WWF of claiming excessive emissions cuts, leading to windfall profits and a rise in greenhouse gases in developed countries.
Projects that destroy a potent greenhouse gas called hydrofluorocarbon-23 (HFC-23) may need to be reviewed and have the amount of offsets issued to them adjusted, the head of the CDM's executive board told Reuters last week.
HFC-23 projects account for around half of the 420 million offsets issued to date.
The CDM's methodology panel, which advises the executive board on what types of carbon-cutting technologies they should consider, met last week and are expected to publish their meeting findings in the next few days.
"It was a good meeting, quite balanced with good discussion, but the meth panel cannot make decisions themselves, and will only provide advice to the CDM executive board," said Lex de Jonge, the meth panel's chair and former CDM-EB chair. (Editing by William Hardy)