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Amazon Sidesteps Carbon Offset Standard That Its Founder Bezos Helped Fund

Published: July 5, 2024
(Image: The Amazon logo is displayed on a sign outside the company's LDJ5 sortation center, as employees begin voting to unionize a second warehouse in the Staten Island borough of New York City, U.S. April 25, 2022. REUTERS/Brendan McDermid/File Photo)

Amazon has become the first company to sidestep a global standard for verifying carbon offsets.

That standard was developed by a non-profit funded largely by the founder and executive chair of the company, Jeff Bezos.

Amazon is backing the development of a new standard that could allow the online retailer and cloud-computing provider to overcome a dearth of supply for quality-labeled offsets.

That would enable it to meet its target of cutting its greenhouse-gas emissions to zero on a net basis by 2040. 

Critics worry that the move could lead to market confusion and a compromise in the standards of carbon offsets.

Companies under pressure to curb their emissions can buy credits from developers of projects that absorb carbon, such as through reforestation.

The market for offsets has remained small, due to a limited number of projects that can verify their climate benefits.

Amazon told Reuters it has completed work on Abacus, a framework for verifying the quality of carbon offsets in reforestation and agroforestry. 

Amazon developed the standard with carbon registry Verra as an alternative to one developed by the Integrity Council for the Voluntary Carbon Market (ICVCM). 

ICVCM is the world’s biggest grouping of private sector and environmental groups dedicated to validating carbon offsets. 

Verra first announced it was developing the label with Amazon and its Abacus working group in 2022.

Bezos is one of IVCMs biggest donors, having plowed at least $11 million into ICVCM and sister organizations since their 2021 launch.  Bezos set up his $10-billion Earth Fund to tackle climate change.

Jamey Mulligan, Amazon’s head of carbon neutralization, said in an interview that the company evaluated and supported ICVCM’s work, but that it wanted a more ambitious standard.

“We want to ensure that every credit investment has a real, conservatively quantified and verified impact on emissions,” Mulligan said, but declined to comment on whether Bezos was involved in Amazon’s decision.

Bezos could not be reached for comment.

Alphabet, Meta, Microsoft and Salesforce have said they plan to buy up to 20 million metric tons of Abacus-certified credits.

The $2-billion market for voluntary carbon offsets has remained small amid concerns by companies and investors that the underlying projects may not curb as many emissions as they claim.

According to an Environmental Defense Fund analysis of data from financial information provider MSCI, the market accounts for offsetting 300 million metric tons of emissions annually, 

Yet only a fraction of those offsets are verified, with ICVCM’s main quality label, CCP, accounting for 27 million tons.

Gilles Dufrasne, policy lead at environmental non-profit Carbon Market Watch, stated: “My main concern with the strategy remains with the idea that the purchase of these credits somehow ‘neutralizes’ Amazon’s impact. I don’t think it does.” 

Amazon generated 71.3 million tons of carbon dioxide equivalent emissions in 2022, according to its latest sustainability report. 

It will take two to three years for projects to qualify for the Abacus label, because many rely on trees growing, and then developers proving how much carbon they absorb.

Reuters contributed to this report.