Unjust gains by cookstove distributors by over-estimating emission reductions: Report 

A recent study conducted by researchers at the University of California, Berkeley, has come up with a finding that the cookstove distributors are gaining unjustly by overestimating the emission reductions caused by their cookstoves and earning more carbon credits than due. 

There are many companies who give away cookstoves to rural folk for free and earn trade-able carbon credits for the better cookstoves that save fuel, and therefore carbon dioxide emissions.

Typically, a cookstove costs ₹1,600, but each cookstove can earn the company four carbon credits. The price of carbon credits varies widely depending upon factors like who certifies them and who buys them and when, but the cookstove companies make a profit. 

Carbon accounting

And now, a paper titled ‘Cooking the books: Pervasive over-crediting from cookstoves offset methodologies’, produced by Annelise Gill-Wiehl, Daniel Kammen and Barbara Haya, of the University of California, Berkeley, has delved into the issue and found out that the cookstove distributors gain six times more than what they should get, if the carbon accounting was properly done. 

“According to our estimates, our sampled cookstove projects are on average 6.3 times over-credited. That is, the average project generated roughly 6 times more credits than our estimated climate benefits,” the authors of the paper, which is yet to be peer-reviewed, say. 

“Our sample generated 7.8 million offset credits (each representing one metric ton of carbon dioxide equivalent (tCO2e). We estimate their climate benefits to be just 1.1 million tonnes CO2,” the paper says. Extrapolating the results across all the cookstove credits issued, they say that while 53 million credits were issued, only 8.7 million ought to have been issued. 

The overcrediting essentially comes from baseline and usage assumptions. The website, climatechangenews.com, which further investigated the University of California report, mostly in India, quotes Gill-Wiehl as saying: “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”.   

Climatechangenews.com notes that most village households tend to use both the modern and the old cookstoves, as some foods are better cooked only on the latter. 

Biomass

Another point is about how much biomass is assumed to be lost, when a tree is felled for firewood. The researchers bring in a parameter called ‘fraction of renewable biomass’, or fNRB. To calculate the real damage to forests—and therefore the eligible carbon credits—one should take into account the regeneration of the forests and not simply assume that they are permanently gone.  

The researchers note that a 2012 CDM (Clean Development Mechanism) project declared a fNRB value of 87.9 per cent, assuming that nearly all the harvested wood would not grow back. In contrast, the value calculated by the researchers, using more sophisticated and scientifically accepted methods, is 24.2 per cent. 

Major player

BSE-listed EKI Energy Services, an Indore-based company, is a major player in the carbon market and has sold over a million cookstove credits since 2021. The company buys and sells carbon credits, facilitates securing and sale of credits and generates credits on its own by activities such as growing mangroves and distributing free cookstoves. The company operates under the brand name ‘Enking’. The Climatechangenews.com article notes that Enking’s own as well as the old credits “are highly likely to produce offsets (credits) that do not reflect real cuts in CO2 emissions.” The article says it anchors this observation in Gill-Wiehl’s analysis of EKI Energy’s documentation. The research paper does not mention EKI Energy (or any company.) 

‘Strict alignment’

When asked about the article, Manish Dabkara, Chairman and Managing Director, EKI Energy, told businessline that the article had not taken the company’s responses. He forwarded the statement issued in response to climagechangenews.com article, which says: “Our practices are in strict alignment with prescribed standards and we assert claims solely based on this methodology; which further substantiated during third party verification by registry panelled verifier.”  

It further said, “the idea of inflated figures is unfounded.” 

On February 10, the company’s auditors, Walker Chandiok & Co LLP, said: “...based on our review, we could not obtain sufficient and appropriate evidence regarding satisfaction of performance obligation for delivering the verified carbon units. Accordingly, in our view recognition of revenues together with the corresponding cost to fulfil the performance obligations is not consistent with the accounting principles as stated in Ind-AS 115, Revenue from Contracts with Customers.” 

On August 15, the company intimated to the BSE, that the shareholders had approved in an Extraordinary General Meeting a resolution to remove the auditors. 

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