Voluntary Carbon Markets Need a Race to the Top

As the CEO and Co-founder of, I have read the article “The Great Cash-for-Carbon Hustle” in New Yorker and I am shaken by it. This blog post is a reaction to the issues brought up in the article and I’d like to share the following reflections.

General observations: 

  • Puro was founded to figure out the mechanism to accelerate the development of carbon net-negative industries – in other words, industries that actively remove more carbon dioxide from the atmosphere than they emit. We also wanted to find and describe the least disputable carbon drawdown processes based on our own logical assessment.
  • To put it another way, Puro was not founded to correct the wrongdoings of earlier actors in the voluntary carbon markets. However, when we realized that the existing carbon markets were based on something called “counterfactual baseline” and that emissions could continue, although possibly on a lower level, we expected this to blow up sooner or later. We decided to keep our eye on the ball and build a durable carbon removal ecosystem as best we could.  
    • Certifying durable carbon removals is fundamentally different from certifying “emitting less than before” (avoidance such as natural gas replacing a coal-fired power station) or “growing more than before” (nature-based projects such as improved forest management).
    • Durable carbon removals do not normally happen by themselves. They need human activity, and the quantification is based on 1) how much carbon is stored 2) for how long and 3) how much was emitted while doing it.
    • Then comes the layer of safety – is it done safely without risk to the environment or people?
    • And finally, the layer of political choices which does not impact how much carbon is sequestered but is equally important: requirements for financial additionality and co-benefits (including Sustainable Development Goals (SDGs) other than SDG13 climate action).
  • To be clear: Puro does not issue carbon credits based on a positive baseline. Baselines are only relevant when some level of carbon removal would naturally occur in the absence of the project. In such cases, the baseline is used to establish a reference point for reducing the number of credits that the project can claim. Our approach ensures that projects are not rewarded for something that would have happened anyway.
  • We have developed methodologies, the rules which CO2 removal suppliers needs to follow, starting from the ones with the least risk of re-release of carbon, very low leakage, scientific (preferably measurable) quantification, and long-duration storage.
    • As an example, we have been asked twice by forest owner interest groups to develop a methodology that would guarantee them windfall profits, but after careful analysis we have realized that their expectations would not fit into our guiding principles.
  • The article notes that the project developer selects and pays for the audit. From day one Puro has selected and paid for the auditor to minimize the risk of corruption. 
  • There’s been a lot of discussion about perverse financial incentives for carbon-crediting programs. Traditionally carbon standards charge a flat fee for the issuance of credits. The implication is that it makes no difference to them if they are ever sold and what percentage of the price ends up to the project.
    • Puro’s Service Fee is transparently available on our website. We do not charge for the issuance since we share the risk with the supplier. In other words, Puro will only get paid if the supplier sells their, CO2 removal certificates, or CORCs as we call them. This way we are incentivized to maintain high quality and desirability.
  • Another topic is who covers the cost of certification. In my opinion it is a weird discussion. Regardless of the business, it is always the buyer who pays the bill at the end of the day, either it is included in the price offered by the supplier or it is added afterwards. The end result doesn’t change. 
  • Going back to the basics, we are adamant that accelerated emission reductions need to be prioritized over emission neutralization. The fact that removals are much higher priced than the avoidance and reduction carbon credits makes the case a lot easier for the buyers. No rational CEO / CFO would accept paying ~$150 per tonne of carbon emitted if there is a cheaper way of avoiding or reducing its emission in the first place.
  • After reading the article, I understand why the critics are afraid that if the VCM is brought into the compliance sector, it will be contaminated by these activities. That is why it is so important to raise the bar for all carbon standards. 

 Regardless of the above, we are not immune and welcome constructive feedback. Therefore, here are some of our actions to steer clear of the practices described in the article: 

  • One of the rotten features of the broker dominated market with a low-priced product is that majority of the money paid by the buyer might never end up to the project. When we were also a marketplace and the seller was also the supplier (not the supply aggregator or project developer), we could always easily state how much money went to the supplier. Now that we work with more intermediaries, we need to be aware of the possibility of someone taking a large percentage of the proceeds to themselves. To avoid this, we will establish guidelines on how much intermediaries should charge for their services.
  • We are in the process of implementing a formal whistleblower policy that enables all employees to report any suspected wrongdoing to an independent officer, that is obligated to discuss the matters with the Board of Directors.
  • We are increasing sustainability requirements of feedstock biomass and environmental safeguards on the Standard and Methodology levels.

Closing thoughts: 

  • The Integrity-Council for the Voluntary Carbon Market (IC-VCM) needs to address the fundamental problems and thus make sure the practices described in the article will not be able to continue in the future. We call on the IC-VCM to raise the bar further for all players in the carbon space.
  • Thus far we have done what we believe is right regardless of the minimum requirements for carbon credits. This way we have managed to establish a good reputation, but the market has remained small. We can continue to exceed the market requirements, but it comes with a risk that the buyers will ignore CORCs and just find the least expensive CCP compliant credits. In any case, we are not considering to lower our quality requirements, we stick to providing quality. 
Nasdaq becomes majority investor in
Nasdaq becomes majority investor in

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