Howden creates warranty and indemnity policy for carbon credits
Howden's policy aims to protect against fraudulent activity at project level, giving assurance over the way credits were produced, something that is expected to allow project developers to charge a premium for the credits.
LONDON, June 21 (Reuters) - Insurance broker Howden Group said it has helped create the world's first warranty and indemnity policy for carbon credits as part of efforts to improve trust in the market.
Carbon credits, which are generated by projects which remove or avoid carbon emissions, are seen as an important tool for helping companies meet their net-zero commitments and deliver finance to conservation and carbon reduction projects.
Yet growth has been held back by quality concerns, including over whether the claimed environmental benefits of a project actually happened, something Howden's policy aims to fix.
The first buyer of the policy is British company Mere Plantations, which has applied it to 300,000 credits generated from a project in Ghana that aims to restore 10,000 acres of degraded land within the Afram Headquarters Forest Reserve.
The project is expected to remove 2.9 million tonnes of carbon between 2011 and 2031.
Howden's policy aims to protect against fraudulent activity at project level, giving assurance over the way credits were produced, something that is expected to allow project developers to charge a premium for ( article continues at Reuters )