GenZero to review carbon credit deal after fraud charges

Temasek-owned investment firm GenZero said it is reviewing its involvement in a South-east Asian carbon credit programme after US federal prosecutors filed fraud charges against a senior figure behind the company running the programme.

- David Fogarty

Former C-Quest Capital (CQC) chief executive officer Kenneth Newcombe, who stepped down from the role in February, was indicted on Oct 2 in New York on wire fraud and securities and commodities fraud charges.

Under Newcombe, the US-based CQC ramped up its programme from 2021 to roll out more efficient cookstoves to local communities, mainly in Africa and Asia. The stoves are said to burn less fuel and produce less pollution. Carbon credits can be claimed for each tonne of carbon dioxide (CO2) emission avoided.

Newcombe and some of his ex-colleagues were charged over fraudulently exaggerating the amount of emissions avoided and duping investors in a case that risks further damaging the already tarnished image of the global voluntary carbon market.

The 77-year-old Newcombe, a pioneer of the carbon credit market, denies any wrongdoing, Bloomberg reported, quoting a statement from him.

GenZero said in a statement to The Straits Times on Oct 3: “As a partner in C-Quest Capital's South-east Asia Clean Cookstove Programme, we are assessing the implications on the integrity and impact of the current outcomes on the programme.

“We take allegations of wrongdoing by our programme partners seriously, particularly when those actions impact the credibility of carbon markets.”

In a deal announced in 2022, GenZero and Pavilion Energy – until recently a wholly owned subsidiary of Temasek – invested US$14 million (S$18.3 million) in the South-east Asia cookstove programme.

Pavilion Energy told ST on Oct 4 it has fully exited the CQC project and has no further comment.