A US court has charged two top executives of an American firm with a presence in Kenya with fraudulently obtaining carbon credits worth tens of millions of dollars involving cookstove projects in three African countries.
Kenneth Newcombe and Tridip Goswami of CQC Impact Investors were found guilty of engaging in a multi-year scheme to fraudulently obtain carbon credits by using manipulated and misleading data on cookstove projects in Malawi, Zambia and Angola.
CQC Impact Investors also has a presence in Kenya, having teamed up with Mwangaza Light, a local renewable energy company, to introduce TLC-CQC stove in rural Kenya.
Newcombe, the CEO of CQC and Goswami, the Head of CQC’s Carbon & Sustainability Accounting Team, would then fraudulently secure an investment of over $100 million (Sh12.9 billion) from companies that wanted to emit larger quantities of greenhouse gases than the credits they had been allotted.
As in other areas where CQC runs the projects, these stoves are supposed to replace polluting, inefficient open fires, in poorly ventilated kitchens in rural parts of the country.
“They then sold those credits to unsuspecting buyers in the multi-billion-dollar global market for carbon credits,” US Attorney Damian Williams said.
CQC ran projects to generate carbon credits, including a type of credit known as a voluntary carbon unit (VCU), by reducing greenhouse gas emissions. Carbon credits are tradable certificates that represent a reduction in greenhouse gas emissions.
Whereas most carbon credits are created and traded through compliance markets where the government limits the amount of greenhouse gas companies can emit, they can also be traded in voluntary carbon markets. Voluntary markets revolve around companies and entities that voluntarily set goals to reduce or offset their carbon emissions.
CQC profited by selling VCUs it obtained, often to companies seeking to offset the impact of greenhouse gases they emit while operating their businesses.
The problem, said William, started when Newcombe’s rapid growth caused significant problems for the quality of its cookstove projects.
“To meet the targets set by Kenneth Newcombe, the defendant, CQC had to rely on partners that did poor work installing stoves; installed stoves in locations that were outside of a project scope (e.g., installing stoves in a suburban area, instead of a rural area, because it was easier to meet targets in more populated areas); and sometimes claimed to install stoves that they never installed,” said Williams.
“Even when CQC’s partners installed stoves properly, the scale of CQC’s growth made it difficult for the company to check on installed stoves and teach the recipients how to use the new devices.”
CQC’s cookstove project began last November with a 100-stove pilot in two locations which are still under verification for initial certified emission reductions (CER) issuance.
“By Q3 we hope to take this programme to scale with Mwangaza and their Green Churches movement, and with several other partners. Government approval has been obtained for this rural stove program,” says CQC on its website.
A study published in January in the reputable science journal, Nature found that some of the cookstove credits that have been certified by leading registries do not avoid the emissions they claim, throwing into a spin the voluntary carbon market (VCM) through which Kenya received $13.79 (Sh2.14 billion) by selling carbon credits to 16 Saudi Arabian firms, including Aramco, the world’s largest oil producer in 2022.
Most VCM cookstove project activities replace three stone fires or inefficient biomass stoves with improved firewood stoves, while 43 project activities distribute only WHO-defined clean stoves/fuels.
Earlier in 2022, Kenya received $13.79 million (Sh2.14 billion) from 16 Saudi Arabia firms, including Aramco and Saudi Electricity, Saudi Arabia’s power distributor, at an auction organised by the Gulf State’s Regional Voluntary Carbon Market Company (RVCMC).
“A portion of proceeds from these credits have been invested towards funding clean cooking and solar home systems,” said President William Ruto during the launch of the African Carbon Market Initiative at the COP27.
An undercover investigation by journalists from the Centre for Climate for Reporting (CCR) also disclosed that Kenya is one of the 19 African countries selected by the Saudi Arabian government in an ambitious plan by the oil-rich nation to undo the progress on phasing out fossil fuels by financing high-carbon infrastructure across the continent.
The Oil Sustainability Program (OSP), the investigation revealed, is a climate change-fighting ploy whose real objective is to get select countries in Africa and Asia hooked on Saudi oil.
Through the OSP the Gulf State, flush with billions in its sovereign wealth fund, plans to help build airports, roads and ports and whose airplanes, cars and ships respectively will be powered by Saudi oil.
