Global oil company Shell is under fire for deceiving the public about its carbon pollution and using greenwashing in its marketing.
What's happening?
For a period of two years, Shell shipped liquefied natural gas to buyers as part of a promotional campaign and claimed that it was carbon-neutral.
But according to a new report from Climate Home News and Dialogue Earth, no successful action was taken to reduce the carbon pollution that results from LNG production. Instead, Shell used millions of "phantom" carbon credits to cancel out the emissions on paper.
The company pledged to cut down on the release of methane gas from rice paddies in eastern China by introducing an improved crop irrigation method. This would offset the carbon pollution from Shell's LNG. But these rice cultivation projects failed to work as intended or were never implemented in the first place.
Through interviews with local farmers and authorities, Climate Home and Dialogue Earth discovered "a string of failures in their implementation" and that Shell has not followed through on its plans to reduce its pollution.
"Clearly there's a major problem when projects actively manipulate data, which a supposedly rigorous audit process fails to detect, thereby erroneously generating millions of phantom credits for Shell to greenwash its LNG," Jonathan Crook, a policy expert at Carbon Market Watch, told Climate Home.
Why is it concerning?
As a fuel source, liquefied natural gas produces a larger carbon footprint than coal, emitting dangerous levels of carbon dioxide and methane.
Some of the LNG shipped to buyers as a part of this campaign was sold with a "net-zero solution" claim under Shell's "green" label. This greenwashing was harmful and misleading to the public.
Shell has also recently been accused of using greenwashing in advertising in the United Kingdom. For tips on spotting these tactics taken by corporations, review resources such as TCD's guide on greenwashing.
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Yes — everywhere 👏 What's being done about it?
Verra, a carbon credit registry, has reviewed Shell's actions for verification. In 2024, Verra said it found issues and failures with the rice farming projects and suspended them. Verra said it would impose "significant sanctions" against those involved.
Climate Home and Dialogue Earth raised concern over this because Verra approved the projects and let them continue for two years before taking action. This could harm Verra's reputation and credibility, especially since it oversees thousands of other carbon credit projects.
"By the time Verra cancelled the Chinese rice projects, more than 1.6 million credits generated by the projects had been used to offset the equivalent of the annual CO2 emissions of four gas-powered plants," Climate Home said.
"This is yet another example showing that we really cannot trust the industry to make sure that those carbon credits are actually reducing emissions, and, instead, we should force them to address their pollution at source, by curtailing their fossil fuel production and sales," Laurie van der Burg, global public finance manager for Oil Change International, told Climate Home.
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