Two-thirds of the world’s biggest companies with net-zero targets are using “carbon offsets” to help meet their climate goals, Carbon Brief analysis reveals.

The world’s top fossil-fuel producers, carmakers and tech firms have used tens of millions of carbon credits to claim they have “cancelled out” large chunks of their emissions in recent years, the analysis shows.

Carbon Brief finds that just 34 companies have used credits to offset 38m tonnes of carbon dioxide (MtCO2) during 2020-2022, equivalent to the annual emissions of Ethiopia and Kenya combined.

The top users of carbon credits

– units each representing one tonne of CO2 avoided, reduced or removed – were Shell (9.9m units), Volkswagen (9.6m) and Chevron (6.0m).

In theory, credits represent emissions savings undertaken on behalf of the buyer – typically, by supporting renewable energy

or forest-protection schemes.

In practice, many projects have failed to deliver. Campaigners say the rapidly growing trade is a cheap alternative to real carbon cuts that provides the biggest emitters with a “licence to pollute”.

Carbon Brief’s analysis of the world’s top 50 companies with net-zero targets by market capitalisation sheds new light on the often-opaque world of carbon credits.

Indeed, the analysis shows there is no public information at all on the users of half the credits bought from the top four voluntary offset “registries”.

Other key findings include:

• Fossil-fuel companies and car manufacturers were responsible for more than three-quarters of the offsets used by the top 50 companies.
• Projects in Indonesia (9.2m offset credits), China (6m) and Colombia (5.8m) provided the most offsets.
• The single-largest provider was the Katingan peatland project in Indonesia, which generated 5.4m offsets for these companies – in theory, the equivalent of taking 2m cars off the road.
• Only 8% of the offsets used were from projects that removed CO2 from the atmosphere – predominantly tree-planting.
• Half of the offsets were from REDD+ forest protection projects. A growing body of evidence suggests these projects often overstate their climate impact.

Read the full article on Carbon Brief

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