Cafedirect Using Carbon Credits to Fund Green Coffee

by | May 15, 2012

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Cafedirect – the UK’s largest fair trade hot drink supplier – is using the carbon market to fund adaptation projects that, in turn, support the sustainability of its own coffee production.

As one of the four pilot groups of Cafédirect’sAdapCC project, the Peruvian cooperative of Cepicafe began investigating ways the carbon market could be used to help increase the sustainability of local farming, according to a Cafédirect report, Coffee Climate Crisis.

For generations farming in the area that Cepicafe operates has used slash and burn techniques as a way of gathering firewood and creating farmland.  Over time this has led to a shortage of shade trees on both the land used to grow coffee and further up mountains, where subsistence farmers of other crops live.

The lack of trees further up the hills has led to increased rainwater runoff, washing away the coffee plants’ soil and nutrients, and in extreme cases leading to mudslides. These processes actually decrease the amount of water available to the coffee plants in drier periods.

Simply adding more shade trees to the area used for growing coffee would not have provided enough trees to be useful in the carbon markets, so a deal had to be struck with the villagers of Choco who live and work further up the mountain.

Through the AdapCC project, farmers are now reforesting the degraded grasslands at higher elevations to increase the nutrients and water available for the lower-level coffee plants, and to provide a sustainable source for firewood, while gaining income from the carbon market.

Once the planted trees have been certified to the CarbonFix standard, the carbon credits will be sold and 10 percent of the income will go to Cepicafe.

The carbon credits from the newly planted forests will ideally be sold to buyers within the same coffee supply chain. Cafédirect, for example, is pre-paying funds to purchase credits, which helps the project get up and running.

In 2010, Nestle announced plans to invest CHF 500 million ($487 million at 2010 rates) to address responsible farming, sourcing and consumption across its coffee supply chain. Nestle purchases around 780,000 tons of green coffee a year or 10 percent of the world’s supply.

Nestle planned to double the amount of coffee it buys directly from farmers to 180,000 tons by 2015. In addition, 90,000 tons of Nescafé coffee will be sourced according to the Rainforest Alliance and Sustainable Agriculture Network principles by 2020, according to the plan.

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