More carbon fraud cases are popping up around the globe including Australia and Belgium as government watchdog organizations step up efforts to monitor the nascent green business sector.
As an example, the Australian Competition and Consumer Commission (ACCC) says it is closely watching the green business sector, reports SmartCompany. ACCC recently forced a green power company, Global Green Plan, to purchase carbon credits it had promised to buy on behalf of customers, but never did, and is currently pursuing action against carbon capture company Prime Carbon over allegedly misleading claims made by the firm, according to the article.
In the case of Global Green Plan, the company had participated in a government program designed to encourage home owners to use green power, reports SmartCompany. Under the GreenPower scheme, Global Green accepted payments from customers and promised to purchase renewable energy certificates on their behalf, but the company was eventually deregistered from the program, and didn’t use all the money to buy the certificates, according to the article.
Michael Schaper, acting ACCC chairman, told SmartCopmany that the two primary areas of concern are green marketing and carbon claims including carbon offsets, carbon sequestration and carbon reduction.
Schaper said in the article that small businesses who are involved in green-related businesses to be careful when making any claims about their credentials and about the way carbon credits are accounted for and sold.
In Belgium, authorities have charged three Britons suspected of value added taxes (VAT) fraud on CO2 emissions permits, reports iafrica.com.
Jean-Bertrand Cambier, a prosecutor in the Tournai, Belgium, said in the article that the Britons were arrested as part of an investigation into about three million euros of unpaid taxes. Cambier cites the lack of harmonized tax and VAT regimes across EU member states as a cause for fraud.
To cut down on fraud in the carbon trading market, the European Union has proposed a reverse payment scheme for VAT on carbon trading.
Late last year, the biggest clean energy auditor in the world, SGS UK, had its accreditation suspended by United Nations inspectors, because it did not properly audited projects in carbon trading markets, and DNV, a Norwegian auditor, was also accused of similar infractions.
In the European Union, fraud within the carbon trading community is estimated to cost taxpayers more than $7 billion in the past 18 months.
In addition to carbon fraud, the carbon emissions trading industry is faced with low carbon pricing and a weak U.N. climate deal that has forced carbon traders to expand or diversify into other commodities, reports Reuters.
Reuters also reports that Paris-based COER2 Commodities will start trading in mid-January crude oil futures, natural gas, gold and base metals in addition to its existing carbon emissions trade, and Fortis Bank Netherlands diversified into other European energy markets at the end of last year.
Several large banks in the European Union’s emissions trading scheme (EU ETS) also participate in other energy or commodities markets, reports Reuters.
EU permit prices fell by 21 percent last year and are now down nearly 60 percent from the high of 2008, reports Reuters, which was partly due to the economic downturn that resulted in lower industrial output.
A weak climate agreement in Copenhagen in December also contributed to lower demand and lower prices, reports Reuters.
The global market for carbon credits grew slightly to $136 billion last year, from $126 billion in 2008, according to Point Carbon, reports Reuters.