Verra suspends carbon credit issuances of Southern Cardamom forestry project

International carbon credit certification body Verra announced June 21 the suspension of further issuances of their highly popular Southern Cardamom project.

According to a notification released on the Verra registry, the certifier has initiated a review of the Southern Cardamom REDD+ Project following stakeholder comments.

Further issuances from the project have been put on hold pending the outcome of the review. Verra has deemed the stakeholder comments significant enough to warrant further investigation, leading to the opening of the review, the notification document said. Exact details of the stakeholder comments were not mentioned in the notification.

Verra's notification on its website was an email to the Cambodian government's environment ministry, SCS Global Services -- the validation body that conducted the first validation of the project -- and the Wildlife Alliance, which developed the project.

The Southern Cardamom Project, established in 2016, is one of the largest and most popular REDD+ projects in Cambodia. A large proportion of sales of carbon credits from the project were managed by Everland, a US-based developer of forestry projects.

Market reacts to news

The voluntary carbon market saw nervous sentiment following news of the suspension of the project. A broker said that supply would be affected because of the end of the issuances.

"It might become a concern," the broker said. "This could strain the prices, which are already struggling."

Platts, part of S&P Global Commodity Insights, heard of VCS-CCB Gold certified REDD+ ID 1748 (Southern Cardamom) credits offered at $7.10/mtCO2e for 25,000 mt 2019-vintage credits on June 20. The day prior, similar credits of 2018 vintage were offered for $6.10/mtCO2e.

The Platts Nature-based Avoidance Current Year price fell 5 cents on the day to $5.50/mtCO2e June 21.

Meanwhile, a trader said the news had not impacted the market yet, but that there might be some hesitation to buy the project.

"But, in the end we have to wait," the trader said, adding that the project might see a discount soon.

The news follows a lull in the REDD+ segment following news reports earlier this year on the credibility of REDD+ projects.