By Liz Kivi
Carbon certifier Toitū Envirocare has walked back plans to stop accepting Emissions Trading Scheme credits for offsetting, because there is still a shortage of local carbon credits meeting international standards.
In 2023, the government- backed carbon certification organisation announced it was transitioning away from using New Zealand Units issued to permanent forestry projects in the ETS, in order to align with global standards.
At the time, independent commentator and former Toitū chief executive Dr Ann Smith said the move was inevitable in the context of increasing scrutiny on the global voluntary carbon market. NZUs don’t meet international integrity criteria and are not able to be traded internationally.
However Dr Belinda Mathers, Toitū Envirocare chief science and integrity officer, says that high integrity New Zealand credits to replace the ETS units still haven’t materialised.
Internationally certified credits now aren’t expected until 2026. Only limited quantities will be available initially, and demand from Kiwi businesses for the local credits is expected to outstrip supply.
“A sufficient supply of local credits that meet the global Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCPs) were expected to become available early in 2024, but these are taking much longer than expected to operationalise.
“Because expectations around supply have changed, our transition plan has been adapted to bridge the extended gap,” Mathers says.
Slow growth
Despite the government saying that high-quality nature and carbon credits meeting global standards are important for investors and New Zealand’s reputation, voluntary carbon market experts say proper regulations are still lacking and more government support is needed for the market to grow.
John O’Brien, Carbon Market Solutions has previously written in Carbon News that a combination of scandals, challenging economic times, and cheaper offshore carbon credits, mean that the domestic voluntary carbon market in New Zealand remains absolutely tiny, with the Ministry for the Environment estimating that the total market size is only about NZ$20 million a year as of 2025.
“Voluntary carbon market growth in New Zealand has been very slow over many years,” O’Brien says.
Integrity needed
Mathers says the Core Carbon Principles (CCPs) are 10 fundamental, science-based principles for identifying high-quality carbon credits, setting a global benchmark for high integrity in the voluntary carbon market, intended to ensure progress towards limiting global warming below 1.5°C.
International credits with a CCP label have been available within Toitū’s certification programmes for several years.
“Access to CCP-labelled New Zealand credits will give Kiwi businesses confidence, knowing they’re funding local carbon projects that stand up to heightened integrity checks. This eases the pressure companies are increasingly facing from shareholders, regulators and the public to prove the credibility of their climate claims.
“Currently, very few New Zealand-based credits are tagged or assessed against ICVCM principles but that’s changing. Toitū is monitoring the voluntary carbon market for CCP-labelled credits and will transition to providing them exclusively once they are readily available.”
In the meantime, Toitū is continuing to use select local credits that Mathers says meet a rigorous due diligence process. “These are limited to New Zealand carbon projects that have been on Toitū’s supply books since its transition process commenced early last year.
“This means Toitū does still permit the use of select New Zealand credits, including some issued by PFSI and PP89 – those that pass our due diligence. It also means we have fewer options for New Zealand credits, but our clients can trust the quality of those that pass our checks.”
There are three phases to Toitū’s CCP transition plan:
Phase 1: Establish access
Toitū is actively working to establish access to CCP-labelled New Zealand credits. The company permits the use of select New Zealand credits issued by the PFSI and PP89 schemes that have passed due diligence assessment.
Phase 2: Incremental rollout
The first CCP-labelled New Zealand credits are expected to become available in 2026 in limited quantities. Demand from Kiwi businesses is expected to exceed supply for a time. Toitū will introduce CCP-labelled New Zealand credits and continue to provide select New Zealand credits that pass its due diligence assessment.
Phase 3: Exclusive ICVCM
Once project supply of CCP-labelled New Zealand credits adequately increases to meet client demand, Toitū will offer CCP-labelled credits exclusively. The timeframe for this is uncertain and could take two to three years.
Toitū is audited annually by the International Carbon Reduction and Offset Alliance (ICROA) and is piloting an improved approach to the accessibility of its carbon credit services. “All businesses that have taken reasonable steps to measure, manage, and reduce their emissions – regardless of whether they hold a Toitū certification – can apply to participate under the strict criteria of the pilot.”