We have a had a few queries recently about carbon credit schemes that pay landlords for making carbon saving improvements to stock. Whilst we haven’t looked at any schemes in detail, we do have some thoughts. Here is one of our answers.
Thanks for your time earlier. As promised here are some bullets about my thoughts on the carbon credits scheme you mentioned. As I pointed out these are based on my opinion in general on offsetting schemes and I haven’t been able to really take a detailed look at the scheme you mentioned. In general though, provided you are happy to work with them, then take their money while it’s available, but do not rely on it as a panacea for funding net zero (we are exploring other possible mechanisms for this).
- You, as a social landlord selling CO2 savings – in principle I think this is fine as long as:
- other companies are willing to continue buying them off you (via the carbon credits scheme) and
- you are satisfied that the scheme is good quality scheme (see below on more thoughts) so you avoid reputational issues
- Additionality – Projects must demonstrate that they have produced a saving in carbon that would not have happened otherwise – for you – if regulations and/or Decent Homes require you to improve homes – then would the credit scheme still pay out?
- Avoiding leakage – The project must demonstrate that it has not caused an increase in carbon emissions elsewhere – I doubt this is relevant for you
- Permanence – forestry projects are at risk of disease or fire – what happens if you dispose, regenerate or sell upgraded homes – would you have to pay credits back?
- Validation and verification – The project must receive independent verification – this is down to the provenance of the scheme
- Timing – Carbon credits must only have been issued from the project after the emissions reduction has taken place – I’m not sure if the scheme will give you money before upgrades are made
- Avoiding double counting – A registry must be used to register, track and permanently cancel credits to avoid double counting or double selling – this is down to the provenance of the scheme
- Transparency – Credits should be supported by publicly-available information on a registry to set out the underlying projects, the quantification methodology applied, independent validation and verification procedures, project documentation, proof of credit ownership and date of retirement of credits. – again this is down to the provenance of the scheme
- You, as landlord, keeping the credits to offset your own emissions – for social landlords’ activities there are no net zero pathways that require you to offset your emissions – pathways are generally reduce demand for energy and then use non-fossil fuels for heating, move to EV’s for your fleet and engage your supply chain on embodied carbon in the materials they use. Also, I’m not aware of any “market” drivers that favour you declaring net zero. I.e. why would you want to? In my opinion you can use money to upgrade homes rather than buy offsets.
- How long will the scheme last? – there are some sectors that require offsetting (aviation and agriculture). They will possibly contribute to this scheme in the future, but they may contribute to other schemes too e.g. planting woodland. There are suspicions that opportunities to offset will become less (e.g. reduced amount of land left to plant trees) and then offsets will become more expensive to buy. This will mean that it will be cheaper for offsetters to reduce CO2 emissions rather than pay into the offsetting schemes
- How much are CO2 credits worth – I’m not aware of any “standard” price for £/tonne for carbon offsetting – from memory, me offsetting CO2 emissions for a flight for a holiday may cost me ~£6/tonnes, European Trading Scheme ~£34/tonne , Treasury Green Book are anticipating ~£500/tonne in the future – take your pick!
If you would like to discuss your carbon reduction plans, please feel free to get in touch: contact
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