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Shell is linked to both sets of projects, which Verra ruled as no longer valid in August 2024 after detecting “unprecedented” failures in their implementation.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
Large flotilla brings Pacific voices and message to leaders at Pre-COP meeting: Keep 1.5C Alive
NADI, FIJI Wednesday 7 October 2026 — Around 80 people including Pacific and Torres Strait community members, Elders and youth activists travelled as part of a colourful flotilla past the Pre-COP venues with a message for leaders: ‘Keep 1.5°C Alive’.
High res footage and images available here
The large flotilla included traditional Fijian voyaging vessel the Uto Ni Yalo, six 6-person outrigger canoes, and Greenpeace campaigning vessel the Oceania which sailed from Sydney to the Pre-COP in Nadi. On board were Elders, climate-vulnerable communities members from across the Pacific and Torres Strait, youth activists and poets, and campaigners and climate experts from across the region.
Messaging on canoes and banners said ‘Hold the Line at 1.5°C’ and ‘Keep 1.5°C Alive’ — a reminder to leaders that the climate limit established under the Paris Agreement is a non-negotiable survival line.
Shiva Gounden, Head of Pacific at Greenpeace Australia Pacific, said: “People from across the Pacific and Australia have come together today to make sure the voices of our communities are heard by leaders meeting here in Nadi for the Pre-COP climate talks. The Taku Pakasoa Declaration adopted here at Pre-COP means ‘Strength in Unity’, and that’s how we’re coming together today.
“Our message is clear: Hold the Line on 1.5°C and centre those most impacted by the climate crisis in your decision-making. Our children’s futures must not be stolen away so that polluting nations can continue down the fossil-fuel path.
“Limiting global heating to 1.5°C is a non-negotiable survival line for Pacific communities and for humanity. Every cyclone, every storm now blows with the deadly force of accumulated emissions and gives a warning of what is to come as we face a dangerous summer of climate-fuelled extreme weather. Do not ignore our voices.”
On board, Aigagalefili Fepulea’i-Tapua’i, Pacific youth climate advocate and poet from Aotearoa Climate Action Network, said: “To hold the line on 1.5C for our Pacific family, New Zealand, as the only country where the connection between environmental protection and indigenous rights is legally validated by our constitutional document, must protect the rights of Māori.”
ENDS
Media contact: Kate O’Callaghan in Nadi on +61 406 231 892 (Whatsapp/Signal)
Large flotilla brings Pacific voices and message to leaders at Pre-COP meeting: Keep 1.5C Alive
Climate Change
A ‘victory’ for communities as High Court rules climate impacts from coal and gas must be considered even where fossil fuels are exported
SYDNEY, Wednesday 7 October 2026 — In response to the landmark High Court ruling that climate impacts of fossil fuel projects must be considered by NSW planning authorities, the following lines can be attributed to Joe Rafalowicz, Head of Climate and Energy at Greenpeace Australia Pacific
“The High Court decision today is a victory for communities that bear the brunt of the storms, bushfires and extreme weather fuelled by Australian fossil fuel corporations.
“Coal and gas companies have claimed they are not responsible for their pollution because it happens overseas, but today Australia’s highest court sided with common sense and scientific evidence to find that every new coal and gas approval in this country could put us at risk, no matter where it is sold or burnt.
“As leaders meet at the Pre-COP talks in Fiji this week, Pacific communities are reaffirming the importance of the 1.5C temperature limit as a survival line for humanity, and is a scientific, moral and legal obligation as affirmed by the landmark Pacific-led ICJ Advisory Opinion. The highest court in the world, and now in Australia, have been clear: it is legally imperative that all of the pollution from fossil fuel projects be considered before approving a new project.
“Now is the moment for the Australian Government, as COP31 President of Negotiations, to find the courage, leadership and grit our country is known for to chart a new course away from fossil fuels. This begins with showing leadership at home by ending new coal and gas approvals.”
-ENDS-
After witnessing the effects of sea-level rise in the low-lying island nation of Tuvalu, Pacific leaders on Tuesday used the pre-COP31 summit in Fiji to voice their frustration at the difficulties they have experienced in tapping the global climate finance system.
A small group of government leaders, climate negotiators and heads of development banks and climate funds took a trip to Tuvalu’s Funafuti atoll on Tuesday morning, travelling by road over land just 10-20 metres wide to visit a project that is building barriers to keep the sea from the land.
They then flew to Fiji for the pre-COP summit, where several Pacific leaders said they had been let down by the insufficient quantity, bad terms and slow speed of international finance to help them adapt to a warming climate that is bringing higher oceans, drought and more powerful storms to their shores.
“Right now, our islands are like a canoe that has been rammed by a massive foreign ship. Our canoe is taking on water, we are sinking, and what is the world’s response?” asked Palau’s President Surangel Whipps Jr.
“They hand us a tiny patch to cover a gaping hole,” he continued, “but the bureaucratic process just to receive that patch is so slow that the water fills the hole while we wait. Then to rebuild the vessel so that we can survive the next storm, we are offered loans, debt that adds weight to a sinking boat packaged in red tape so thick we can barely access it. And while we wait, the water continues to fill.”
Pacific leaders and Australia called again on governments to invest in the new Pacific Resilience Facility (PRF), which has been designed by the Pacific Islands Forum and is seeking $500 million in investments by COP31 in November.
It has around $180 million so far, but did not receive additional pledges during the UN General Assembly in New York. The PRF aims to invest to generate annual returns which it can give to projects like water tanks for drought-hit communities.
Witnessing sea level rise
The annual pre-COP gathering is usually a low-profile technical meeting of climate negotiators. But this year, Australia – which is the president of negotiations at COP31 – partnered with the Pacific to introduce a “leaders segment” in an attempt to shine a spotlight on climate issues affecting the region.
Fourteen government leaders – from Australia, Timor-Leste, Mauritius and the Pacific – made the trip. They were joined by the European Union’s climate commissioner Wopke Hoekstra, the heads of the Green Climate Fund and the Asian Development Bank and former Australian prime minister Julia Gillard.
On their return to Fiji, Solomon Islands Prime Minister Matthew Wale told the pre-COP leaders roundtable that the sea level rise they had witnessed was personal for him.
“Tuvalu was not just a site visit for me. I saw the story of my own saltwater people,” he said, adding that he, his daughter and his grandfather had lost their houses to sea level rise and that three-quarters of his electorate live on land that will be underwater in the next 30 years.
From the other side of the world, Antigua and Barbuda’s environment minister Michael Joseph said Tuvalu’s problems felt similar to those of his own Caribbean islands. “I saw vulnerable communities… just metres from the sea and people determined to remain on their land, preserve their culture and way of life,” he said.
A group of Fijian schoolchildren told the leaders it was not just sea level rise the Pacific struggles with but also heatwaves, droughts and storms, which worry their families and prevent them from learning.
Climate finance red-tape
Several Pacific leaders criticised the world’s leaders for not doing enough to combat climate change. Cook Islands Prime Minister Mark Brown expressed disappointment that only two non-Pacific leaders had come to the pre-COP, a fact Australian media widely picked up on to label the event a flop and question its A$20 million (US$14m) price tag.
“We’ve heard a lot of numbers these last two days,” Brown said. “Let me share one of my own. More than 50 invitations extended to world leaders… to see for themselves what high emissions are doing to our nations and our ocean – an ocean that covers nearly one-third of the Earth’s surface.”
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He called for more climate finance for the Pacific, asking “if the world is prepared to assess our suitability for climate finance, why is it not equally prepared to scrutinise whether those responsible for delivering it are meeting their obligations?”
Like Palau’s president Whipps, Naoero’s President David Adeang criticised the red tape that is hindering access to climate finance as well as a lack of money, complaining especially about “complicated procedures, heavy reporting, delays in approval and disbursement”.
Adeang added that “the way we assess vulnerability matters”, adding that it should be measured by more than income. Naoero, for example, is classified by the World Bank as high-income, restricting which climate finance it is eligible for.
Action plan to improve access
On Thursday, the Australian government will present a statement and action plan on improving access to climate finance for small island developing states and least developed countries, which it is asking other countries and organisations to endorse.
The statement addresses some of these Pacific complaints as well as acknowledging that progress has already been made on simplifying access by multilateral development banks and climate funds.
In Fiji, Asian Development Bank head Masato Kanda said his institution is “tailoring our finance and operations to island realities” because “your children and their children should be able to grow old in the countries their ancestors have called home for millennia”.
The executive director of the Green Climate Fund (GCF), Mafalda Duarte, said that the GCF-backed coastal adaptation project leaders visited in Tuvalu shows that “climate finance works” although – as the project took eight years to implement – “it takes time, and therefore we have no time to waste”.