July 1 (Reuters) - Amazon ( AMZN ) has become the first

company to sidestep a global standard for verifying carbon

offsets that was developed by a non-profit funded largely by the

U.S. technology conglomerate's founder and executive chair, Jeff

Bezos.

Amazon ( AMZN ) is backing the development of a new standard that

could allow the online retailer and cloud-computing provider to

overcome a dearth of supply for quality-labeled offsets,

enabling it to meet its target of cutting its greenhouse-gas

emissions to zero on a net basis by 2040. Critics worry that the

move could lead to market confusion and a compromise in the

standards of carbon offsets.

Companies under pressure to curb their emissions can buy

credits from developers of projects that absorb carbon, such as

through reforestation. The market for offsets has remained small

due to a limited number of projects that can verify their

climate benefits.

Amazon ( AMZN ) told Reuters it has completed work on Abacus, a

framework for verifying the quality of carbon offsets. Amazon ( AMZN )

developed the standard with carbon registry Verra as an

alternative to one developed by the Integrity Council for the

Voluntary Carbon Market (ICVCM), the world's biggest grouping of

private sector and environmental groups dedicated to validating

carbon offsets. Verra first announced it was developing the

standard with Amazon ( AMZN ) in 2022.

Bezos, through his $10-billion Earth Fund that he set up to

tackle climate change, is one of ICVCM's biggest donors, having

plowed at least $11 million into ICVCM and sister organization

Voluntary Carbon Markets Integrity Initiative since their 2021

launch.

Jamey Mulligan, Amazon's ( AMZN ) head of carbon neutralization, said

in an interview that the company evaluated and supported ICVCM's

work, but that it wanted a more ambitious standard.

"We want to ensure that every credit investment has a real,

conservatively quantified and verified impact on emissions,"

Mulligan said. He declined to comment on whether Bezos was

involved in Amazon's ( AMZN ) decision.

Bezos could not be reached for comment.

Alphabet, Meta, Microsoft ( MSFT ) and

Salesforce ( CRM ) have said they plan to buy up to 20 million

metric tons of Abacus-certified credits.

Pedro Martins Barata, co-chair of ICVCM's panel of experts,

said he was worried about development of an alternative standard

and that he hoped that Abacus would eventually be folded into

ICVCM.

"Otherwise, you get again into a confusing state in the

market where each set of companies will find their own standards

they want to support and they will say that they're a particular

type of quality," he said.

Kelley Kizzier, director of corporate action and markets at

Bezos Earth Fund and a member of ICVCM's board, said Abacus is

complementary rather than competitive to ICVCM. She also

declined to comment on Bezos' role.

"What we need to focus on is generating high-integrity

(offsets). There is room for lots of actors to do that," Kizzier

said.

The label will be available within weeks, Verra said.

OFFSET MARKET

The $2-billion market for voluntary carbon offsets has

remained small amid concerns by companies and investors that the

underlying projects may not curb as many emissions as they

claim.

The market accounts for offsetting 300 million metric tons

of emissions annually, according to an Environmental Defense

Fund analysis of data from financial information provider MSCI.

Yet only a fraction of those offsets are verified, with ICVCM's

main quality label, CCP, accounting for 27 million tons.

"My main concern with the strategy remains with the idea

that the purchase of these credits somehow 'neutralizes'

Amazon's ( AMZN ) impact. I don't think it does," said Gilles Dufrasne,

policy lead at environmental non-profit Carbon Market Watch.

Amazon ( AMZN ) generated 71.3 million tons of carbon dioxide

equivalent emissions in 2022, according to its latest

sustainability report, of which 54.98 million tons came from its

supply chain.

It will take two to three years for projects to qualify for

the Abacus label because many rely on trees growing and then

developers proving how much carbon they absorb.

Mulligan said Amazon ( AMZN ) could become one of the biggest

carbon-credit buyers, but that it would not use them in place of

the company's efforts to decarbonise its business.

He added that Amazon ( AMZN ) is currently reviewing more than 70

proposals from developers and expects to restore tens of

thousands of hectares of degraded land.

Any developer can apply for the Abacus label provided they

meet requirements of Verra's methodology, which the Abacus

working group, a team of scientists, non-governmental

organizations and industry specialists helped develop.

Eron Bloomgarden, founder of Emergent, a not-for-profit

organization that mobilises private-sector funding for forest

countries, said Abacus would help grow the carbon-offset market.

"The work of ICVCM is important but it's insufficient for

the growth of the market, because what we are trying to do is

solve big existential challenges like climate change and

biodiversity extinction," he said.