Press Release

29.10.2021: Government of Nepal and German NGO atmosfair agree on landmark CO2-offset cooperation, serving as signpost to COP 26 negotiations and integrity benchmark for voluntary offset markets worldwide

 

• New era of voluntary offset markets: offsetting brings the much needed ambition raising of the Paris agreement.
• Bilateral agreement resolves double counting of offset project, building 20.000 new biogas plants annually in Nepal.
• Market for carbon offsetting, climate neutral labels etc. for consumers will be divided in two categories: True offset projects on the basis of this new type of cooperation and those without such basis, which do no longer offset carbon emissions.
• New integrity criteria make sure that the project brings about continuous multiple benefits to Nepal.

Kathmandu and Berlin, 29.10.2021:  Alternative Energy Promotion Centre (AEPC), the nodal agency of the Government of Nepal on renewable energy and energy efficiency, and German Climate non-profit atmosfair have agreed a new landmark cooperation. Under the long term agreement, atmosfair will fund and co-develop the building of annually 20.000 household biogas plants in Nepal. Together with biogas plants installed with atmosfair in previous years, the CO2 savings correspond to about 10% of the total CO2 footprint of Nepal. The CO2-emissions saving will neither be counted towards the Paris CO2 commitments of Nepal nor Germany, but will only be used to voluntary offset flight and other emissions from atmosfair customers. The agreement effectively brings about new and additional CO2 savings and raises the Paris climate ambition. It sends strong signals to the COP 26 negotiations in Glasgow.

Speakers for the AEPC and atmosfair stated that the agreement and the integrity criteria for projects can be used as a blueprint for the current Glasgow negotiations.

“AEPC welcomes the atmosfair funding for the continuous building of new biogas plants for individual user households all over Nepal. Our partnership with our long-term partner reaps multiple benefits: For Nepalese households, the economy and for the climate.” says  Nawa Raj Dhakal, Deputy Executive Director of AEPC.

Under the Paris Agreement, since January 2021, physical CO2-reductions brought about in projects are counted towards the project country, and there are yet no international rules which allow the attribution of these CO2- reductions to another country or company, needed for offsetting. Projects currently running and marketed for offsetting come along with a double counting risk and may not compensate emissions.

“Voluntary carbon offsetting can go beyond CO2 offsetting and even raise the ambition, as demanded for in the Paris agreement. In our cooperation with Nepal we set a new standard for real carbon offsetting” says Dietrich Brockhagen, CEO of atmosfair.

Under the new bilateral agreement, several integrity criteria make sure that the project is beneficial for the climate and for the economy of Nepal. According to these criteria, atmosfair revenues for the offsets are used fully to continuously build new biogas plants in Nepal. Furthermore, the project itself must directly implement new renewable energy hardware for the global energy transition. This type of project is called vulnerable, because the building of new plants would stop, it there were no rules agreed under article 6 of the Paris agreement.

This type of continuous offset funding for new renewable energy hardware is impossible under the Paris agreement today, because it does not foresee the transfer the CO2-certifcates from Nepal to atmosfair, needed for offsetting. There is a danger that carbon offset providers still continue to sell carbon credits as offsets, while the legal title for the emissions reductions really are with the project countries. This may lead to double counting, since the carbon savings are claimed by both the project country and the offset customers. The technical fix this is called “corresponding adjustments” in the CO2 inventories of Nepal and is a central part of the new agreement between Nepal and atmosfair.

“Customers such as governments and large companies who want to offset the CO2 emissions of their business trips as a voluntary measure are already asking for CO2 compensation without double counting,” observes Dietrich Brockhagen from atmosfair. “They want to be sure, that their voluntary offsetting leads to additional CO2-reductions beyond those under the Paris agreement”. He sees that the rapidly growing market for voluntary CO2 compensation will split in two in the future. “There will be effective CO2 compensation, agreed with the project country, which brings about additional CO2 reductions relative to Paris. And there will be projects that may help the project country to achieve its Paris CO2 targets, which the country would have to achieve even without a project. That is no longer CO2 compensation.”