Fossil fuel companies are aiming to profit from a new United Nations’ carbon market by selling carbon credits linked to gas-fired power plants they have already built.
At the Cop28 climate summit last December, governments agreed to set up a new global carbon credit market under Article 6.4 of the Paris Agreement – and a host of fossil fuel firms and their middlemen are now trying to cash in by making their projects eligible for trading.
Developers applied for thousands of projects to be transferred over from the old discredited Clean Development Mechanism (CDM) to the new market that will be established, before the deadline of January 1 this year.
Most of these projects are for renewable energy – which, while good for the climate, have stirred debate. Critics argue that they do not need additional funding from selling carbon credits because they are profitable without it.
However, more controversial are ten projects Climate Home News has identified, based largely in Asia, which backed the construction of power plants that run on natural gas, one of the fossil fuels governments agreed to transition away from at Cop28.
If approved by their host nations, the projects would transfer more than 10 million old gas-linked credits – equivalent to the reduction of 10 million tonnes of carbon dioxide (CO2) emissions a year – to the new Paris carbon market.
“These projects are entirely inappropriate,” said Carbon Market Watch researcher Jonathan Crook. “Some were registered as far back as 2009. It’s unreasonable to assume they expected to rely on revenue from a new market mechanism in 2024 – not to mention that these projects may lock in fossil fuel emissions and infrastructure for years to come, among other issues.”
Clean, cheap or fair – which countries should pump the last oil and gas?
The Integrity Council for the Voluntary Carbon Market was set up in 2021 in a bid to ensure that carbon credits deliver on the emissions reductions they have promised and have a positive impact for the climate. In its categorisation of different types of carbon credit, offsets issued for gas-fired power plants are given the worst ranking.
Similarly, BeZero, a ratings agency for carbon credit projects, looked at three of the CDM gas projects that have applied for transfer to the new market. It gave them a ‘C’ grade, meaning they “provide a very low likelihood” of reducing emissions by as much as they claim.
It cited the “minimal impact” of carbon credit revenues on the project’s overall financial situation and the risk of methane leaks from gas infrastructure that would make the projects more polluting than asserted.
Chinese gas-fired plant
The biggest project is a gas-fired power plant built by China’s state-owned oil and gas company CNOOC and Japanese conglomerate Mitsubishi in 2010 in the province of Fujian, China, just across the sea from Taiwan.
To fire the plant’s four turbines, CNOOC and Mitsubishi imported gas from an Indonesian gas field called Tangguh, which they both had stakes in, through the CNOOC-owned Fujian gas import terminal.
In addition to the income they received from selling the gas, importing it through the terminal and then selling the electricity it produced, they also submitted an application to the CDM to develop and sell carbon credits linked to the plant.
By their own calculations, the plant would emit 2.3 million tonnes of CO2 a year when fully operational. But if they didn’t build it, they said the electricity would come from coal, emitting over 5.3 million tonnes of CO2 a year. So they claimed credits for reducing the amount of CO2 that would have entered the atmosphere by an annual 3 million tonnes.
Justifying this assumption, they said that oil was too expensive and zero-carbon alternatives were not viable as an alternative. Most of Fujian’s hydropower potential had already been tapped, while wind power was “just start-up” and “of seasonal nature”, they added. They did not even mention solar power – now the cheapest electricity source.
However, coal’s main competitors in the province are not gas but nuclear and hydro, power sources that do not emit greenhouse gases. Wind power has also grown rapidly in the province since the gas-fired plant was built.
Lauri Myllyvirta, a senior fellow with the Asia Society Policy Institute, told Climate Home: “The premise that power generation growth would come from coal if a new fossil gas plant wasn’t built was never true and certainly is not true today.”
Mitsubishi withdrew from the carbon credit project in 2022. While CNOOC remains involved, the main project participant is now a company called Europe New Energy Investment Capital, run by a Chinese citizen called Dongquan Yang.
A spokesperson for CNOOC said the project “is out of the scope of CNOOC Limited’s business operations”. Asked how that was compatible with CNOOC Fujian Gas Power Co., Ltd being listed as an authorised participant, the spokesperson did not reply.
Indian carbon-credit developer
Fossil fuel firms are not the only ones trying to monetise carbon offsets from existing gas power plants. Documents show that Indian company EnKing – which has since changed its name to EKI Energy Services Ltd and claims to be the world’s biggest developer of carbon credits – is involved in three of the Indian gas power projects identified.
Last August, Climate Home revealed that EnKing vastly overestimated the benefits of carbon offsets linked to cookstoves in rural India and helped sell those junk credits to oil and gas giant Shell.
Cooking the books: cookstove offsets produce millions of fake emission cuts
Working with fossil fuel companies, EnKing used a methodology (AM0025), under the old Clean Development Mechanism, to derive credits from the building of gas-fired power plants in India.
The successor to this methodology is still technically up and running – but Verra, one of the main international carbon credit verifiers, has declared it inactive due to lack of use.
According to Crook of Carbon Market Watch, it is “extremely unlikely” that this type of methodology will be applicable under Article 6.4, which will govern the new UN carbon market when it launches. EnKing did not reply to a request for comment.
‘Not good practice’
To oversee the new carbon market, governments have agreed to set up an Article 6.4 supervisory body, made up of government climate negotiators. But the rules agreed for it so far offer little power to reject old CDM credits from gas-fired power plants.
The host countries of those projects – including China and India – could refuse to authorise them, but they could still be sold, branded as “mitigation contribution units” under Article 6.4.
These are a lower class of carbon credit agreed at Cop27 which do not require authorisation by the host country as it does not need to do a “corresponding adjustment” for them, which means wiping the credits’ emissions reductions from its accounts.
Carbon credits talks collapse at Cop28 over integrity concerns
Mitigation contribution units cannot be counted towards national emissions goals set under the UN climate process, but they can be bought by companies and used for other purposes. That means the firms trying to sell carbon credits from old gas power stations just need to find buyers to make a profit.
Crook said such deals “wouldn’t be good practice”. “Retiring these credits paradoxically rewards fossil fuel companies for locking in emissions,” he added.
The post Fossil fuel firms seek UN carbon market cash for old gas plants appeared first on Climate Home News.
Fossil fuel firms seek UN carbon market cash for old gas plants
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Climate Change
DeBriefed 19 June 2026: Bonn talks end in ‘gridlock’ | Energy’s ‘new era’ | Oceans in climate negotiations
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Bonn talks close
‘SIDE-STEPPING AND STALLING’: UN climate talks in Bonn have ended in “gridlock”, according to Climate Home News. The outlet reported on the failure to balance developing countries’ need for climate-adaptation finance with “richer nations’ desire to move forward” on emissions cuts. It added that both topics were subject to “rule 16”, meaning no agreement could be reached and work will be pushed to the COP31 summit in Turkey. Inside Climate News quoted UN climate executive secretary Simon Stiell, who said the talks had seen “side-stepping and stalling”.
JUST TRANSITION: One “glimmer of hope” came from negotiations on achieving a “just transition”, reported Euronews. The news outlet said negotiators “made headway on operationalising the Belém-Antalya mechanism”, intended to support people in the shift to a low-carbon economy. However, Politico concluded that much of the focus in Bonn had “shift[ed] to efforts outside diplomatic talks – raising questions about the future of global climate negotiations”.
‘ATTACKING SCIENCE’: Agence France-Presse reported on the EU, Switzerland and “dozens of developing nations” warning of “attacks on science” by a “small group of fossil-fuels interests” in Bonn. Table Briefings explained that “the 1.5C target is increasingly being challenged” and the role of the UN climate-science panel – the Intergovernmental Panel on Climate Change (IPCC) – in an upcoming assessment of global climate progress “remains controversial”. See Carbon Brief’s full write-up of the talks for more detail.
US-Iran deal
PRICE DROP: The US and Iran announced that they have reached an interim agreement to halt the war and reopen the strait of Hormuz, reported Bloomberg. Oil prices have fallen, as the “long-awaited deal” began the process of “eas[ing]” the global energy crisis triggered by the conflict, according to the New York Times. The Associated Press noted that high fuel prices will “likely outlast the Iran war”.
‘OIL GLUT’: The Financial Times reported that the International Energy Agency (IEA) has forecast a “glut of oil” emerging next year, if the peace deal holds. The IEA said this would allow countries to build new strategic reserves, as they “review their energy strategies and policies in response to the crisis”, according to Reuters.
‘NEW ERA’: Agence France-Presse reported that oil and gas companies have “few illusions about a return to normal for the Gulf energy industry after more than three months of blockage”. One analyst told the newswire that the war “showed the oil and gas industry that Hormuz risk is no longer just a geopolitical headline”.
Around the world
- OCEAN MONITOR: The Trump administration is “abandoning its plan” to dismantle a $368m ocean monitoring system key for tracking climate change after a “bipartisan backlash on Capitol Hill”, reported the New York Times.
- CORAL HAVEN: The New York Times covered preliminary research, presented at the Our Ocean Conference in Kenya, suggesting there could be three times as many “coral refugia” – where corals are relatively safe from climate change – than previously thought.
- BAD CREDIT: Down to Earth reported that the first carbon credits issued under the Paris Agreement’s new Article 6.4 mechanism are “facing scrutiny over alleged links to institutions controlled by Myanmar’s military junta”.
- OIL BACKTRACK: Reuters reported that oil-and-gas company Equinor has dropped a renewable-energy target and scaled back clean investments, while another Reuters story noted that Shell is selling off its offshore wind assets.
1.1 billion
The number of children facing “at least three overlapping climate hazards”, according to a new Unicef report covered by Agence France-Presse.
Latest climate research
- Including the “permafrost carbon-climate feedback” in climate models increases the chance of exceeding “tipping elements” – such as the Greenland ice sheets, Atlantic Meridional Overturning Circulation or Amazon rainforest – by up to 50% | Environmental Research Letters
- The intensity of influenza outbreaks could decline in temperate regions, but increase in tropical areas over the next century, as the climate warms | PNAS Nexus
- European snow cover has declined by 20% for December and January since the start of the industrial era, revealing an “unprecedented ongoing shrinkage of European winters” | Communications Earth & Environment
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
The more than 2m battery electric vehicles (BEVs), 1m “plug-in” hybrids (PHEVs) and 100,000 electric vans on UK roads are already saving drivers a total of around £3bn a year, according to new Carbon Brief analysis. This amounts to savings of more than £1,100 a year in fuel costs for each BEV driver in the UK. The analysis comes amid reports in UK media this week that the government is considering “watering down” its EV sales targets.
Spotlight
Oceans rising at UN climate talks
The state of the world’s oceans is inextricably linked to the changing climate – and many delegates at UN climate talks want to see more focus on this issue, reports Carbon Brief.
Oceans are often described as the world’s “greatest ally” against climate change – absorbing 30% of carbon dioxide (CO2) emissions and most of the heat generated by those emissions.
They are also the site of important climate solutions, such as huge offshore windfarms and the shipping industry’s transition to cleaner fuels.
At the same time, the oceans themselves present a growing danger to coastal communities and sea life due to sea level rise, marine heatwaves and ocean acidification.
These diverse issues have led to growing calls within the UN climate process for more focus on oceans. During climate negotiations this week in Bonn – known as SB64 – nations and civil society had a chance to air these views during an “ocean and climate change dialogue”.
‘Elevate action’
Oceans first entered UN climate outcomes in 2019, when the final COP25 negotiated text requested a new “dialogue” on “the ocean and climate change to consider how to strengthen mitigation and adaptation action”.
The following years saw this dialogue established as an annual event. However, the political weight of these discussions has been limited.
COP31 is being co-led by Turkey and Australia, but with Pacific islands playing a supporting role. These small islands sometimes self-identify as “large ocean states”, stressing the ocean’s centrality in their societies.
In Bonn, figures from across the presidency threw their weight behind this issue. Chris Bowen, an Australian minister and incoming COP31 “president of negotiations”, told attendees:
“Australia, Turkey and the Pacific see an important opportunity to elevate ocean-based climate action.”
Strategies and finance
The two-day dialogue in Bonn involved a series of panels, statements and breakout groups.
One of the main topics was how oceans are integrated into national climate plans under the Paris Agreement, known as “nationally determined contributions” (NDCs).
Three-quarters of the latest round of NDCs mention oceans, with conservation of “blue carbon” ecosystems the most frequently described action. (Landscapes such as mangroves can both absorb CO2 and protect coastal areas.)
Delegates also discussed alignment with the UN biodiversity process, as well as ocean finance, which currently makes up less than 1% of all climate finance.
(As discussions were taking place in Bonn, country officials also gathered in Mombasa, Kenya for the 11th Our Ocean Conference. Carbon Brief’s associate editor Giuliana Viglione attended the conference and will publish a full summary shortly.)
Developing countries were clear that many of the ocean-related actions in their NDCs would depend on receiving more financial support.
‘Political momentum’
With the backing of the COP31 presidency, delegates were hopeful about where this year’s dialogue could lead.
Charles Hamilton, an advisor for the Bahamas who spoke for the Alliance of Small Island States (AOSIS) in the dialogue, told Carbon Brief that island representatives “are not traveling thousands of miles to just talk and pat ourselves on the back”. He added:
“A dialogue that just remains a dialogue is just more talk – no action.”
Given that, he said “discussions in the dialogue must move into COP decisions and the decisions must be actioned”, noting the importance of finance.
Marina Corrêa, oceans lead at WWF-Brazil, pointed to an upcoming UN climate change Standing Committee on Finance forum as a space to ramp up pressure on ocean finance.
More broadly, she wanted to see the presidencies translate their support into a “leader-level ocean initiative” that could “mainstream” oceans across negotiations.
“We have a really interesting opportunity, in terms of political momentum,” Corrêa told Carbon Brief.
Watch, read, listen
‘HOTTER THAN HELL’: An episode of the BBC’s Rare Earth podcast titled “hotter than hell” considered the issue of extreme heat, with input from experts and “people facing up to the hottest temperatures on the planet”.
NOT BROKEN?: John Drake, a professor of ecology at the University of Georgia, wrote an essay for Aeon – also re-published as a Guardian “long read” – questioning the framing of ecosystems and climate systems “breaking down”.
ON COURSE: On his Volts podcast, US climate journalist David Roberts interviewed UK climate minister Katie White, quizzing her about whether the UK will “stay the course with its climate plans”.
Coming up
- 20-28 June: London climate action week
- 21 June: Colombia presidential runoff
- 24 June: UK Climate Change Committee progress in reducing emissions 2026 report to parliament
Pick of the jobs
- Mongabay, managing editor – Africa | Salary: Unknown. Location: Global
- Contexte, environment reporter – Brussels | Salary: €45,000-€60,000. Location: Brussels
- Climate 200, communications director | Salary: Unknown. Location: Australia
- Energy Tracker Asia, energy transition correspondent | Salary: $3,000-$4,000 per month. Location: South-east Asia (remote)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 19 June 2026: Bonn talks end in ‘gridlock’ | Energy’s ‘new era’ | Oceans in climate negotiations appeared first on Carbon Brief.
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