Cookstove offsets produce millions of junk carbon credits

Abdul Nalband, head of Machutar village in western India, received shiny new cooking stoves for his community over a decade ago. Offered as a replacement for their traditional mud stoves, the cast iron devices promised to make cooking rice and rotis – the staple of the villagers’ diet – more efficient. Yet the stoves, as in the case of most of his neighbours, quickly stopped working.

Machutar is one of the several dozens of villages across the Maharashtra state where the distribution of new stoves fuelled the production of carbon credits that are still being sold to big polluters today.

Nalband was told the new equipment would consume less of the firewood sourced from nearby trees as fuel. For villagers, this would mean fewer harvesting trips, supposedly bringing climate benefits in the process. 

But, as Abdul Nalband recalls now, “the stoves broke down soon due to rusting and nobody came to follow up or repair them”. Machutar villagers reverted to cooking with traditional stoves, while the few able to afford it gradually switched to liquefied petroleum gas (LPG). 

Machutar’s experience is far from unique. Hundreds of carbon offsetting projects distributed so-called improved cookstoves across India, and other developing countries, over the last decade. As 2.4 billion people across the world still cook with highly polluting fuels, giving them access to more efficient firewood stoves can aid the transition to clean cooking.

However, experts suggest the climate benefits from a significant proportion of these projects have been severely overestimated. They say that lax rules, overinflated estimates and poor monitoring have likely created a flood of poor quality offsets linked to the cooking devices.  

Climate Home News analysed improved cookstove projects linked to one of the most active players in the sector: Enking, an Indian firm that claims to be the world’s biggest carbon offsetter. It found that the projects are likely overstating emissions reductions by as much as eight times. Buyers of these offsets include top polluters like oil giant Shell. 

“Everyone is technically playing by the rules, the issue is that the rules are bad”, Annelise Gill-Wiehl, co-author of a recent study on improved cookstoves, told Climate Home News. “The methodologies allow the books to be cooked by developers”. 

Booming carbon offsets

Improved cookstove projects are often confused with clean cooking schemes. But whereas the latter help households transition away from a polluting fuel to a cleaner one, like gas or, even solar, improved cookstoves simply hand out more efficient devices still powered by the same fuel, in this case firewood. 

The premise is that giving poor households better-designed stoves makes them consume less firewood resulting in fewer carbon emissions. That greenhouse gas prevented from being released into the atmosphere is then converted into carbon offsets that corporations, governments and individuals can buy to compensate their own emissions.

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On paper, such programmes can bring benefits. Especially in countries like India, where more than 40% of rural residents still rely on firewood for cooking and face barriers to switching to cleaner fuels.

But, in order to have a real climate impact, the projects have to accurately calculate the drop in CO2 emissions as a result of handing out the stoves.

Most improved cookstove projects follow a popular set of rules first established by the Clean Development Mechanism (CDM), the UN’s official carbon offsetting scheme. Experts have pointed the finger at this methodology, arguing it has opened the floodgates to worthless offsets.  

A project distributing improved firewood stoves with those rules generates on average eight times more credits than it should, according to a recent pre-print study by the University of California, Berkeley. The paper is currently undergoing peer-reviewing. 

“I wouldn’t say that the projects are intentionally misleading their buyers,” says Rob Bailis from the Stockholm Environment Institute (SEI), “but that weaknesses in the methodologies and oversight bodies allow developers to make assumptions that are probably not accurate, leading to inflated emission reductions”.

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World’s largest carbon offsetter 

In a business park on the outskirts of Indore, a city in west-central India, lies the self-proclaimed world’s biggest developer of carbon credits. EKI Energy Services, or Enking as the company is commonly known, claims to control roughly 15% of the global voluntary carbon market. Enking has also played a major role in giving a new lease of life to thousands of junk credits from improved cookstove projects. 

Founded in 2008 by engineer Manish Dabkara, Enking started out buying and selling credits and helping other developers get their projects certified. It quietly built up a huge inventory and an ever-growing list of clients including the World Bank and major corporations such as Shell, Siemens and Volksgwagen. It also became the first carbon offset company listed on the stock exchange in 2021.  

We make a #great #team that sweats together, survives together, and wins together.

We #believe in the vision, harmony, and consistency. pic.twitter.com/tgp7ReCkrn

— Manish Dabkara (@manishdabkara1) May 7, 2022

Since then results for Enking have been much more mixed. The company has been mired in a spat with its auditor, which refused to sign off on its financial accounts after highlighting a “material overstatement of revenues”. Enking, which denies any wrongdoing, is now trying to oust the auditor. 

Climate Home News found Enking has also been betting big on improved cookstove projects, despite technical concerns from experts. The company has set up a manufacturing plant capable of producing up to 5 million cast iron stoves a year. The plan is to distribute them to rural households across India, and beyond, as part of carbon offsetting projects. This could lead to 5 million new credits every year. 

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Alongside developing its own activities, Climate Home News found that Enking has also been playing a major role in giving a new life to credits issued by old projects, originally started over ten years ago by a different Indian company under the UN’s Clean Development Mechanism. 

Based on flawed accounting, this type of project has long been subject to strong criticism. For this reason, Jess Roberts from carbon offsets rating agency Sylvera says they should not be used for offsetting claims, and, if bought, they should be seen as more philanthropic investments. 

But, since early 2021 Enking, acting as a consultant, has helped transfer two dozen of these projects onto the registry of Verra, the world’s largest carbon offsets certifier. Nearly 1.2 million credits have since been made available to polluters. Oil and gas giant Shell has been the biggest buyer so far, snapping up over 98,000 of them on a single day last February. 

Enking has not replied to questions sent by Climate Home News at the time of publication.

Verra told Climate Home News that it “takes any concerns about the integrity and quality of the carbon credits it issues seriously and is ready to address them if they turn out to be founded”.

It is not the first time Enking’s carbon credits activities have come under scrutiny. A report by Bloomberg highlighted how its portfolio is stuffed with offsets tied to renewable energy schemes. These products are generally acknowledged to be of poor quality because of the lack of additionality – meaning the projects would have been funded without the offsetting scheme. 

Overstated climate benefits 

Climate Home News found that both sets of projects – Enking’s own and the old ones from 2012 that they brought back to life – are highly likely to produce offsets that do not reflect real cuts in CO2 emissions, according to an analysis of their documentation by Berkeley’s Gill-Wiehl.  

The projects apply two slightly different versions of the much-contested CDM rules to calculate emissions reductions. They claim abnormally high levels of deforestation caused by firewood harvesting and unrealistic rates of usage when compared with comparable numbers found in scientific studies, the analysis shows.

When projects claim very high numbers buyers should ask hard questions, says SEI’s Rob Bailis. 

As with most other types of carbon credits, improved cookstoves start from a counterfactual scenario: what would have happened to CO2 emissions – in this case produced by collecting firewood – if the project had not existed? 

The methodologies compare the amount of wood consumed by each household before and after installing the efficient cookstoves. The cast iron cookstoves provided should be more efficient and consume less fuel. As a result, project developers claim villagers need to harvest less firewood from nearby forests, which should therefore be better preserved. 

But “it is extremely difficult to quantify the emissions reduced from avoided deforestation as a result of distributing the improved cookstove,” says Jess Roberts from carbon offsets rating agency Sylvera. Calculations heavily rely on modelling based on several different parameters, which are subject to uncertainty and at risk of manipulation, she added. 

Exaggerated forest loss 

One single key number, in particular, can hugely inflate emission reduction estimates and, as a result, produce vast amounts of worthless carbon credits. Experts call it the fraction of non-renewable biomass (fNRB). In layman’s terms, this is the percentage of wood assumed to be lost for good when trees are cut down for fuel, leading to the depletion of carbon stocks. 

For example, if forests regenerated at the same rate at which firewood was collected, there would be no net change to CO2 levels and no negative climate impact. But the longer forests take to grow back – which implies a high fNRB value –, the bigger the threat to forests’ carbon-storing potential researchers expect. 

Experts say most low-quality credits from improved cookstove projects stem from the misuse of this factor. Several studies have found large discrepancies between the fNRB values used in carbon offsetting projects and those observed by independent researchers. 

According to Berkeley University’s Annelise Gill-Wiehl, this also applies to the projects analysed by Climate Home News.  

The 2012 CDM project declared a fNRB value of 87.9%, assuming therefore that nearly all harvested wood would not grow back. That value stands in stark contrast with the corresponding number – 24.2% – calculated by Gill-Wiehl through a more sophisticated and scientifically accepted model.  

The same level of discrepancy is found in the project currently being developed by Enking. 

Accounts heard by Climate Home News in villages across India’s Maharashtra state indicate the impact of the rural population’s firewood collection on forest loss is limited.

“The forest is protected and maintained by the government. So villagers collect just dead and broken twigs and branches,” Shantabai Deve said. “We are well aware of possible problems if we keep chopping trees, so we plant new ones as well.”

Poor monitoring 

The exaggerated forest loss estimates are not the only parameter fuelling questionable offsets.

“For this type of project the assumed emission reductions don’t happen unless the recipient actually uses the stove,” says Gill-Wiehl. For each stove not used as intended, the project developer needs to reduce the number of credits issued. 

That involves tracking recipients’ behaviour: whether they cook with the new stove at all, how often that happens and whether the traditional, less efficient, stove also remains in operation. This phenomenon, known as stacking, is relatively common because traditional stoves may be better suited for preparing a specific type of meal or may have a religious significance – like in some parts of India. 

Checking these metrics brings more problems. “Lots of over-crediting comes from the lack of robust monitoring”, Gill-Wiehl says.

Often this delicate exercise is done exclusively through surveys, asking a small sample of the recipients a set of questions once a year. These can be “really simplistic”, according to the Berkeley researcher. “They would literally ask a household ‘have you used the stove in the last month?’ and if the answer is ‘yes’, they get to credit it as if they used it all the time”. 

These surveys produce results that, on the face of it, appear excellent. 

In a monitoring report for its new project, Enking said its surveys showed everyone they had given a stove to has been using it all the time without ever combining it with a traditional one. The CDM projects report similarly high rates across the board, allowing them to issue nearly the maximum number of credits allowed. 

These results are starkly different from those generally observed by independent researchers on the field. According to the Berkeley report, studies have seen average adoption rates of 53%, usage rates of 48% and stacking rates of 76%. In other words, only about half of the recipients cook with the stove at all, and, if they do, it happens less than half of the time, most likely in conjunction with a traditional one. 

SEI’s Rob Bailis says that “projects claiming very high rates of fNRB, adoption, and exclusive use, should raise some red flags”.

Researchers say project developers could implement different methods to track the stoves’ usage: anything from just drafting better surveys to cross-checking answers with photos and videos, or even fitting the devices with remotely-controlled sensors.  

But it is easy to see why very few go the extra mile, experts said. “The incentive structure is to generate as many credits as possible, not to produce really high-quality data,” says Gill-Weihl.

In Machutar and in other neighbouring villages most improved cookstove users interviewed by Climate Home News didn’t recall the exact project that gave them their devices. But they do remember that most of them broke down quickly and were no longer in frequent use.

For the villagers, the abstract thought of carbon offsets is eclipsed by their immediate needs. Meager incomes from rice and strawberry farming put frequent supplies of gas canisters beyond the reach of most. Firing up the traditional mud stoves remains the only solution.

“It is convenient and faster to cook on LPG. But I cannot afford to refill it twice every month”, says Rajendra Jadhav, an electrician in the region. “So I use an earthen stove for boiling water, drying clothes, and even cooking food frequently”.

Saurabh Katkurwar contributed to report this story.