US-led offset idea earns more corporate support

More companies registered support today for a US-backed carbon offsetting initiative that is hoping to steer funds toward the decarbonization of developing countries' power sectors.

The Energy Transition Accelerator (ETA) — a project of the US State Department and two philanthropies, the Bezos Earth Fund and the Rockefeller Foundation — said that 19 companies support the general idea of the initiative, that "high-integrity carbon credits" can support "an accelerated and just clean energy transition." As part of an announcement tied to Climate Week NYC, 14 companies, including some that had previously not registered interest, signed onto a letter saying they were committed to working with the ETA as the initiative advances.

The letter notes, however, that the companies are not pledging any "obligation of funding" for the initiative, which has an unclear timeline for getting projects up-and-running. The ETA previously set plans for formally launch this past April but instead said then that it would spend this year "building" on a framework for projects released last year.

The ETA is hoping to create a "jurisdictional-scale" carbon crediting standard, steering funds toward efforts such as accelerating the retirement of coal-fired power plants, building new renewable generation, and improving the electric grid in developing countries. The idea is that buyers would be able to finance offset projects with more tangible climate benefits, hopefully avoiding the reputational risks associated with much of the voluntary carbon market. Prices for some major nature-based carbon offsets have fallen over the past year, as concerns about their integrity have deterred prospective buyers.

The initiative's goals for this year are working to build "a community of buyers and sellers," said Nat Keohane, president of the Center for Climate and Energy Solutions think tank at the Xpansiv Climate Week Summit on Monday. Chile, the Dominican Republic, and Nigeria have expressed interest in serving as ETA pilot countries, while the Philippines this year signed on as an observer country rather than as a direct participant.

Ahead of the UN's Cop 29 climate summit this year in Azerbaijan, the ETA wants to demonstrate the progress interested countries have been able to make and to collaborate with the World Bank on economic analysis and modeling to understand what future projects and investment plans might look like, Keohane said.

Winrock International, which runs the American Carbon Registry, was tasked by the ETA last year with developing a standard and methodology for crediting emissions reductions. Keohane expects that to be out "next year," he said at the event. Winrock did not immediately respond to requests for comment for more clarity on its timeline.

"There are also some other crediting standards coming out, and ETA will be evaluating those against the criteria that we put out in our framework last year," Keohane said.

By Cole Martin