SINGAPORE (Reuters) - A Tanzanian reforestation project has become the first forestry investment to be issued carbon offsets under an industry-backed standard that assures investors the emission reductions are credible and long-term.
The Voluntary Carbon Standard said on Thursday the first batch of credits had been issued this week and placed in the VCS registry.
London-based The CarbonNeutral Company, which helps firms cut their carbon emissions, is marketing the credits.
The project in the southern highlands of Tanzania involves converting degraded grassland into sustainably harvested eucalypt and pine forests that soak up carbon dioxide from the air as they grow, earning CO2 offsets.
The forests cover 7,250 hectares (18,125 acres) in Uchindile district and 3,560 hectares at Mapanda district, the VCS and The CarbonNeutral Company said in a statement.
To protect investors, 40 percent of the initial batch of 232,264 credits would be placed in a special buffer account, they said. This is to guarantee delivery of the credits going forward in case the trees are destroyed by fire or other reasons.
Pricing of the nearly 140,000 credits varied depending on sales volume and other factors, Jonathan Shopley, managing director of The CarbonNeutral Company, told Reuters, without giving a range.
He said the flow of credits is expected to increase as the project reaches full development.
The VCS sets strict carbon accounting criteria that aims to assure investors that offset projects are properly designed and transparent. They were created to try to address investors’ fears about forestry projects that might be poorly managed or where the trees are later cut down, for example, through illegal logging.
The Tanzania project also met the standards of the Climate, Community and Biodiversity Alliance, the statement said.
Ten per cent of the carbon credit revenues would be returned to the local communities to build classrooms, teachers’ houses, dispensaries and roads, while 200 local people were employed in the forests.
Reporting by David Fogarty; Editing by Vera Eckert