VCS eases rules for issuing Canada carbon credits

WASHINGTON (Reuters) - A leading standard setter for voluntary carbon market offsets said on Wednesday it has eased its rules for Canadian projects that aim to cut emissions of greenhouse gases to issue carbon credits.

The Voluntary Carbon Standard Association said it would allow clean projects hosted in Canada to issue the offsets, known as Voluntary Carbon Units, without corresponding cancellation of credits under the Kyoto Protocol on global warming.

Before the VCS move, projects in Canada wanting to issue the credits had to demonstrate that they would not be double-counted in a Kyoto Protocol related program. That problem has happened in other developed countries that have agreed to cut their emissions under the U.N. pact.

VCS made the move because “there is no regulatory framework to implement the Kyoto Protocol (in Canada), none is likely to emerge, and the country is unlikely to achieve its Kyoto Protocol reduction commitment.”

Canada has fallen behind meeting its Kyoto commitments and is not doing enough to curb global warming, a report from environmental group WWF said earlier this month.

Carbon offsets allow companies that elect not to immediately cut their own emissions to invest in projects that aim to cut emissions elsewhere. Many companies in heavy industries like power utilities buy VCUs and other voluntary offsets to improve their environmental image or to get ready for mandatory carbon regulation plans.

Trade in global voluntary offsets more than doubled last year to $705 million though volumes slowed late in the year due to the economic slump, according to a report in May from New Carbon Finance and Ecosystem Marketplace.

Reporting by Timothy Gardner