Verra has used nearly a million “hot air” carbon credits to compensate for bogus offsets generated by rice-paddy projects backed by energy giant Shell in China, Climate Home News can reveal.
In a case described as “shocking” and “deeply alarming” by experts, the leading carbon registry replaced 960,000 credits issued for rice-field methane reduction activities that had been found to overstate emissions cuts with an equivalent number of junk credits from other failed Chinese rice projects, its records show.
“It’s frankly unbelievable that Verra considers it appropriate to compensate for hot air credits with other hot air credits,” said Jonathan Crook, policy lead at Carbon Market Watch. “To pretend this is a satisfactory resolution is both absurd and deeply alarming.”
Shell’s links to bogus offsets
Shell is linked to both sets of projects, which Verra ruled as no longer valid in August 2024 after detecting “unprecedented” failures in their implementation. Last year, an investigation by Climate Home News and Dialogue Earth cast serious doubt on whether any emissions-cutting activities were carried out on the ground at all.
In response to those findings, a Shell spokesperson said “the projects in question are not managed or operated by Shell”. But the oil and gas major was closely involved in 10 rice-farming programmes in China as their “authorised representative” and, as Climate Home News reported last year, partly relied on their worthless carbon offsets to market “carbon-neutral” liquefied natural gas (LNG).
Regulatory filings in the US show that Shell, acting as a broker, last year offered to potential buyers the same carbon credits that have now been used as partial compensation for the 10 projects.
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For more than a year, Verra failed to replace nearly 2 million worthless credits issued by the 10 projects, after the Chinese developers stopped responding to the registry’s communications with them. Shell abandoned the programmes shortly after Verra ordered that the credits should be compensated.
The credits were primarily used by Shell to offset real greenhouse gas emissions created by its vast fossil fuel operations. Other users of the phantom rice-farming offsets include Chinese state-owned fossil fuel firm PetroChina, Singapore-based DBS Bank and UK energy supplier OVO Energy.
In early October this year, updates to Verra’s registry showed that 960,000 excess credits across the 10 projects had been replaced with an equivalent number of credits drawn from four separate rice-cultivation programmes that were also axed at the same time.
Those original credits had not been voided and technically remained available to the account holder, even though Verra scrapped the underlying programmes and unsuccessfully pursued their representatives for redress. The Chinese company behind the four projects failed to respond to Verra’s requests, leaving it unclear whether the credits will ever be replaced.
Verra’s rules in the spotlight
A Verra spokesperson told Climate Home News that the account holder, “which requested to remain anonymous”, asked the registry to cancel those credits and, subsequently, Verra decided to count them towards the compensation process for the other 10 sham projects.
While Climate Home News could not verify the identity of the account holder in question, Shell declared in public filings that, in 2024, it had marketed those 960,000 credits to potential buyers.
Verra said its rules allow any active credits to be used to cover excess issuance elsewhere, even if those credits themselves need to be replaced. Commenting on this specific case involving the sham rice-farming projects, the spokesperson added: “While the source projects have been rejected and must address their own over-issuance, the credits used here were valid at the time of cancellation.”
Grayson Badgley, a research scientist at climate solutions non-profit CarbonPlan, said this sort of logic might allow Verra to balance its credit ledger but does nothing to help the planet’s atmosphere. “This isn’t just about following the rules – it’s about making sure that the carbon market supports meaningful climate action,” he added.
Compensation orders piling up
Carbon market experts told Climate Home News the case raises serious questions about Verra’s ability to safeguard the integrity of its carbon credits at a critical time when a rapidly growing number of bogus offsets require compensation.
Over 10 million worthless credits produced by the discredited Kariba forest protection megaproject in Zimbabwe, and already used by corporations to back up their green claims, need to be replaced after Verra found the threat to the forest had been exaggerated in the project’s original forecast.
Zimbabwe forest carbon megaproject generated millions of junk credits
In a separate development, Verra is now also seeking the compensation of around 4.5 million credits issued by four vast tree-planting schemes in China. The registry axed the projects last Friday after a year-long review failed to confirm they had been approved by government authorities – a key requirement – and that official documentation had not been falsified.
Shell tied to failed tree-planting schemes
While a Chinese company was in charge of the projects’ implementation, official documents show that, for years, Shell had been directly involved as an “authorised representative”. This role, which the energy giant also held in the rice paddy schemes, gave the firm all the “applicable rights and responsibilities” in relation to the activities.
Shell exited all four tree-planting projects in December 2024, a month after Verra informed the firm it would start the investigation that ultimately led to their cancellation last week.
“We purchase and retire a range of Verra-certified credits and were disappointed to learn of the issues Verra identified with these projects and are looking at Verra to replace any credits that were issued under these projects,” a Shell spokesperson told Climate Home News.
For Carbon Market Watch’s Crook, Verra’s unwillingness to deal with “huge loopholes” is not only deeply troubling but also counterproductive as it undermines trust in the registry, while leaving it exposed to future misconduct by unscrupulous actors.
“Rather than take real accountability for this scandal, Verra seems intent on propping up a collapsing house of cards,” he added, referring to the compensation of rice-farming credits.
The post “House of cards”: Verra used junk carbon credits to fix Shell’s offsetting scandal appeared first on Climate Home News.
“House of cards”: Verra used junk carbon credits to fix Shell’s offsetting scandal
Climate Change
Greenpeace organisations to appeal USD $345 million court judgment in Energy Transfer’s intimidation lawsuit
SYDNEY, Saturday 28 February 2026 — Greenpeace International and Greenpeace organisations in the US announce they will seek a new trial and, if necessary, appeal the decision with the North Dakota Supreme Court following a North Dakota District Court judgment today awarding Energy Transfer (ET) USD $345 million.
ET’s SLAPP suit remains a blatant attempt to silence free speech, erase Indigenous leadership of the Standing Rock movement, and punish solidarity with peaceful resistance to the Dakota Access Pipeline. Greenpeace International will also continue to seek damages for ET’s bullying lawsuits under EU anti-SLAPP legislation in the Netherlands.
Mads Christensen, Greenpeace International Executive Director said: “Energy Transfer’s attempts to silence us are failing. Greenpeace International will continue to resist intimidation tactics. We will not be silenced. We will only get louder, joining our voices to those of our allies all around the world against the corporate polluters and billionaire oligarchs who prioritise profits over people and the planet.
“With hard-won freedoms under threat and the climate crisis accelerating, the stakes of this legal fight couldn’t be higher. Through appeals in the US and Greenpeace International’s groundbreaking anti-SLAPP case in the Netherlands, we are exploring every option to hold Energy Transfer accountable for multiple abusive lawsuits and show all power-hungry bullies that their attacks will only result in a stronger people-powered movement.”
The Court’s final judgment today rejects some of the jury verdict delivered in March 2025, but still awards hundreds of millions of dollars to ET without a sound basis in law. The Greenpeace defendants will continue to press their arguments that the US Constitution does not allow liability here, that ET did not present evidence to support its claims, that the Court admitted inflammatory and irrelevant evidence at trial and excluded other evidence supporting the defense, and that the jury pool in Mandan could not be impartial.[1][2]
ET’s back-to-back lawsuits against Greenpeace International and the US organisations Greenpeace USA (Greenpeace Inc.) and Greenpeace Fund are clear-cut examples of SLAPPs — lawsuits attempting to bury nonprofits and activists in legal fees, push them towards bankruptcy and ultimately silence dissent.[3] Greenpeace International, which is based in the Netherlands, is pursuing justice in Europe, with a suit against ET under Dutch law and the European Union’s new anti-SLAPP directive, a landmark test of the new legislation which could help set a powerful precedent against corporate bullying.[4]
Kate Smolski, Program Director at Greenpeace Australia Pacific, said: “This is part of a worrying trend globally: fossil fuel corporations are increasingly using litigation to attack and silence ordinary people and groups using the law to challenge their polluting operations — and we’re not immune to these tactics here in Australia.
“Rulings like this have a chilling effect on democracy and public interest litigation — we must unite against these silencing tactics as bad for Australians and bad for our democracy. Our movement is stronger than any corporate bully, and grows even stronger when under attack.”
Energy Transfer’s SLAPPs are part of a wave of abusive lawsuits filed by Big Oil companies like Shell, Total, and ENI against Greenpeace entities in recent years.[3] A couple of these cases have been successfully stopped in their tracks. This includes Greenpeace France successfully defeating TotalEnergies’ SLAPP on 28 March 2024, and Greenpeace UK and Greenpeace International forcing Shell to back down from its SLAPP on 10 December 2024.
-ENDS-
Images available in Greenpeace Media Library
Notes:
[1] The judgment entered by North Dakota District Court Judge Gion follows a jury verdict finding Greenpeace entities liable for more than US$660 million on March 19, 2025. Judge Gion subsequently threw out several items from the jury’s verdict, reducing the total damages to approximately US$345 million.
[2] Public statements from the independent Trial Monitoring Committee
[3] Energy Transfer’s first lawsuit was filed in federal court in 2017 under the RICO Act – the Racketeer Influenced and Corrupt Organizations Act, a US federal statute designed to prosecute mob activity. The case was dismissed in 2019, with the judge stating the evidence fell “far short” of what was needed to establish a RICO enterprise. The federal court did not decide on Energy Transfer’s claims based on state law, so Energy Transfer promptly filed a new case in a North Dakota state court with these and other state law claims.
[4] Greenpeace International sent a Notice of Liability to Energy Transfer on 23 July 2024, informing the pipeline giant of Greenpeace International’s intention to bring an anti-SLAPP lawsuit against the company in a Dutch Court. After Energy Transfer declined to accept liability on multiple occasions (September 2024, December 2024), Greenpeace International initiated the first test of the European Union’s anti-SLAPP Directive on 11 February 2025 by filing a lawsuit in Dutch court against Energy Transfer. The case was officially registered in the docket of the Court of Amsterdam on 2 July, 2025. Greenpeace International seeks to recover all damages and costs it has suffered as a result of Energy Transfers’s back-to-back, abusive lawsuits demanding hundreds of millions of dollars from Greenpeace International and the Greenpeace organisations in the US. The next hearing in the Court of Amsterdam is scheduled for 16 April, 2026.
Media contact:
Kate O’Callaghan on 0406 231 892 or kate.ocallaghan@greenpeace.org
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