Feb. 20, 2008 - The British government has formalized its recommendations for businesses seeking to offset their carbon footprint with renewable-energy credits. The new Code of Best Practice is limited, however, to carbon offset projects currently registered under the Kyoto Protocol, Reuters reports.

Critics of carbon offsets say the largely unregulated market is ripe for manipulation by unscrupulous providers who may be double-counting credits. To counteract this criticism, environmental groups have worked to develop new quality assurance schemes such as the Voluntary Carbon Standard, launched in London last November.

In the U.S., California and nine states recently sent a letter to the Federal Trade Commission (FTC) requesting that the regulatory agency tighten its restrictions on carbon offset providers.

Some marketwatchers are voicing concern that the U.K.'s new best practices code may unfairly exclude high-quality carbon offset projects that lack funds to cover the hefty administrative fees commanded by the Kyoto Protocol. "We recognize that credits from the unregulated market may be innovative and of a very high standard," U.K. Environment Secretary Hilary Benn said in a statement.

Unregulated carbon-reduction credits could be added to the Code of Best Practice after the business community agrees on and implements a single standard of quality, government officials say. The British government will release its own quality benchmark for carbon offsets later this year.