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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Shell is linked to both sets of projects, which Verra ruled as no longer valid in August 2024 after detecting “unprecedented” failures in their implementation.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.

    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.

    Shell was informed of an investigation into the projects

    A month later, the energy firm left the projects

    Shell was informed of an investigation into the projects

    A month later, the energy firm left the projects

    “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

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    An Old Well Gushed Waste, Not Oil, in a Small West Texas Town

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    The Railroad Commission of Texas shut down injection wells to control a leak in a church parking lot. But 1.5 million gallons of toxic wastewater still spilled to the surface.

    GRANDFALLS, Texas—An old oil well sprang back to life under the parking lot of the First Baptist Church of Grandfalls in April.

    An Old Well Gushed Waste, Not Oil, in a Small West Texas Town

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    On the Historic Route From Selma to Montgomery, an AI Cloud Looms

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    In this rural Alabama community, some residents can’t flush their toilets. Developers want to build a state-of-the-art data center next door.

    HAYNEVILLE, Ala.—When Alabamians marched from Selma to Montgomery in 1965 to demand voting rights for African Americans, Highway 80 became their path toward freedom.

    On the Historic Route From Selma to Montgomery, an AI Cloud Looms

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    Guest post: How a record-high ‘energy imbalance’ is driving global warming

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    The planet is heating up more quickly than ever before.

    For decades, greenhouse gas emissions caused by human activity have been building up in the atmosphere and trapping ever-higher levels of heat.

    The resulting asymmetry between incoming solar energy and energy radiated back out into space – known as “Earth’s energy imbalance” – provides a direct measure of the extent to which humans are disrupting the Earth’s climate system.

    This imbalance is growing and in 2025 its 10-year average reached a record high, indicating that global temperatures could increase at even higher rates in the future.

    This is among the headline findings of the latest “indicators of global climate change” (IGCC) report, published in the journal Earth System Science Data, which tracks changes in the climate system on an annual basis.

    The report, now in its fourth iteration, has been produced by dozens of scientists from around the world.

    Its findings are designed to fill the gap between Intergovernmental Panel on Climate Change (IPCC) science reports, which are published every 5-7 years.

    In this article, we unpack the IGCC report, which explores how human activity is driving a growing energy imbalance and why monitoring systems to track global climate are so crucial.

    (For more on previous IGCC reports, see Carbon Brief’s coverage in 2023, 2024 and 2025.)

    Greenhouse gas emissions remain at an all-time high

    Global greenhouse gas emissions are continuing to increase, mostly as a result of the use of fossil fuels. However, deforestation, agriculture and industrial processes also play an important role.

    Glossary
    CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2e. For a given amount, different greenhouse gases trap different amounts of heat in the atmosphere, a quantity known as… Read More

    Over the most recent decade (2015-24), emissions stood at the equivalent of 54.6bn tonnes of carbon dioxide equivalent (GtCO2e) per year. In 2024, the most recent year for which we have complete data, emissions reached 56.8GtCO2e.

    As the chart below shows, these emissions have pushed up atmospheric levels of CO2, methane and nitrous oxide. In 2025, concentrations of these gases reached 425.6 parts per million (ppm), 1936.3 parts per billion (ppb) and 339.4ppb, respectively.

    This represents a rise of 3.8%, 3.8% and 2.2%, respectively, since the 2019 levels reported in the IPCC’s sixth assessment report (AR6).

    Atmospheric concentrations of CO2
    Atmospheric concentrations of CO2 (yellow), methane (blue) and nitrous oxide (green) over 2000-25. The grey-shaded region represents continuing changes since AR6. Note the different vertical scales for each gas. Credit: Forster et al. (2026)

    At the same time, declines in emissions of aerosols such as sulphur dioxide, partly as a result of efforts to tackle air pollution, are increasing the Earth’s energy imbalance. This is because aerosols have a cooling effect on the Earth’s climate, counteracting warming from CO2 and other greenhouse gas emissions.

    (Tackling sulphur dioxide, alongside other particulate emissions, remains critical because the immediate health and environmental damage they cause far outweighs their short-term cooling effect on the climate.)

    The Earth’s energy imbalance is rising rapidly

    The Earth’s energy imbalance has long been recognised as a key indicator of how the climate is being affected by human activities.

    However, it is only in the last few decades that scientists have been able to record temperature changes deep enough in the ocean to accurately quantify it.

    Earth’s energy imbalance measures how quickly excess heat is accumulating in every part of the Earth system, primarily in the ocean, but also in land, ice and atmosphere.

    Through this accumulation of heat, the energy imbalance influences the rate of sea level rise and ice melt across the world, as well as increasing the frequency and intensity of extreme weather events, such as storms, floods and droughts.

    Without human influence, the Earth’s energy imbalance would be close to zero.

    But, as greenhouse gas emissions have built up in the atmosphere, the imbalance has been growing since the 1970s. Recent increases to Earth’s energy imbalance have outpaced those projections made by climate models — indicating the planet could see more warming than expected in the future.

    As the right-hand chart below shows, the imbalance is now at a record high, having more than doubled over the past two decades.

    It has increased by around 40% since 2019, from an average 0.79 watts per square metre (Wm2) over 2006-18, according to IPCC AR6, to 1.12Wm2 over 2013-25.

    The left-hand chart shows how heat is accumulating in the ocean (blues), ice (grey), land (orange) and atmosphere (purple).

     Observed changes in the Earth heat inventory
    Left: Observed changes in the Earth heat inventory for the period 1971-2020. Right: Estimates of the Earth energy imbalance for successive overlapping 20-year periods and the most recent decade (right). Shaded regions indicate the very likely range (90-100 % probability), while the stars show the CERES (NASA Clouds and the Earth’s Radiant Energy System) estimates for comparison. Credit: Forster et al. (2026)

    Global temperature rise

    The excess heat building up in the climate system from the energy imbalance is pushing up global temperatures at a record rate of 0.27C per decade.

    We estimate that human-induced warming – the amount of observed global surface

    temperature increase attributable to both the direct and indirect effects of human activities – reached 1.37C in 2025. This has risen from 1.0C in 2017, as reported in IPCC AR6.

    While natural variability in the climate system – such as El Niño or La Niña events – can also influence temperatures year-to-year, the upward temperature trend we are seeing is being driven by the persistent imbalance in energy.

    We now expect global temperatures to exceed the Paris Agreement limit of 1.5C above pre-industrial levels around the year 2030.

    This is significant because 1.5C has been identified as the critical dividing line between manageable climate risks and catastrophic, potentially irreversible damage to global ecosystems and human societies.

    Heat accumulating throughout the Earth system

    While heat is accumulating throughout the Earth system, it is not being distributed evenly around the globe.

    Since the 1970s, around 90% of this heat has been taken up by the ocean, affecting marine ecosystems, ocean circulation patterns, sea level rise and climate extremes.

    For example, the number of marine heatwave days – periods of unusually high sea surface temperatures – has more than tripled globally since the early 1990s. The year 2025 alone saw 65 days of marine heatwaves – meaning they occurred, on average, more than one day a week.

    Meanwhile, the cryosphere – the portion of the Earth made up of frozen water, including glaciers, ice sheets and permafrost – is experiencing widespread ice loss and thawing in response to the growing energy imbalance. This affects ecosystems, sea level rise and infrastructure in polar and high-latitude regions.

    Rapid warming has also resulted in record extreme temperatures over land, with average maximum temperatures for any single day over 2016-25 around 1.92C above pre-industrial levels). This is an increase of almost half a degree compared to the previous decade (2006-15).

    Sea level rise and the energy imbalance

    Sea level rise provides one of the clearest long-term signals of a changing planet.

    It is closely linked to Earth’s energy imbalance. As heat accumulates in the ocean, water expands, raising sea levels. Meanwhile, a warming land and atmosphere means addition of water to the oceans through melting of glaciers and ice sheets, also adding to sea level rise.

    Over the long-term, sea levels have been rising, on average, at a rate of around 1.8mm per year since 1901, totalling a record 23cm in 2025. This is increasing the risk of coastal flooding, erosion and habitat loss in many low-lying areas around the world.

    This rise can be seen in the left-hand chart below, which shows observed global sea level changes from tide gauges (grey and blue dashed lines) and satellites (red dashed lines) since 1901. The solid lines indicate the average across multiple datasets.

    Sea level rise is accelerating consistent with the observed increase in Earth’s energy imbalance. Over 2006-25, sea levels have risen at a rate of 3.67mm per year – more than double the rate of 1.69mm per year seen over 1976-95.

    This increasing rate is shown in the right-hand figure below, which shows four successive overlapping 20-year periods and the most-recent decade.

    (Last year’s transition from El Niño to weak La Niña conditions affected global rainfall patterns and led to a small and temporary fall in global average sea level in 2025. This explains the slight decrease in rate of sea level rise for the most recent decade, which is affected more than the 20-year period 2006-25.)

    Global average sea level rise over 1901-2025
    Left: Global average sea level rise over 1901-2025, relative to a 1995-2014 baseline. Individual timeseries are shown with dashed lines, while the black solid line shows the average (from tide gauges and satellites) used in AR6 and the solid red line shows the 1993-2025 average from satellites. Right: Global mean sea-level rates (in mm per year) for four successive overlapping 20-year periods and the most-recent decade. The shading indicates the very likely range. Credit: Forster et al. (2026)

    The bigger picture

    Despite greenhouse gas emissions not increasing as rapidly as in the 2000s, this year’s IGCC findings continue to show how far and how fast the climate is changing due to human activity.

    A significant increase in decarbonisation efforts in the second half of this decade is required to slow down the rate of human-caused warming and limit the escalation of climate risks and impacts.

    These findings, like many others produced by scientists across the globe, rely on international expertise, partnership and the maintenance and availability of global climate datasets and the global observing programmes that underpin them.

    This year’s edition of IGCC used more than 40 global datasets produced by research teams around the world, including the NASA satellite record of the Earth’s energy imbalance and the ARGO deep ocean float network.

    However, a number of long-term monitoring programmes could be threatened by funding decisions made by governments around the world, most notably the Trump administration in the US.

    Local meteorological data and weather balloon measurement programmes in many countries have declined in recent years, especially in Africa, the west Pacific and South America. This reduces scientists’ ability to monitor and understand key indicators of climate change.

    This is not just an issue for climate science. Many of these observations are key to weather forecasts and systems that provide early warning for extreme weather. For example, media reports have suggested that recent reductions in weather balloon measurements in Alaska led to a lack of warnings for a recent winter storm.

    The continuity and integrity of the climate observations that scientists use to understand how the climate is changing depends on effective and sustained coordination by international organisations, such as the Global Climate Observing System, the World Meteorological Organization and World Climate Research Programme.

    Without this data and its coordination, future assessments will be much more difficult at a time when urgent climate action is needed.

    The post Guest post: How a record-high ‘energy imbalance’ is driving global warming appeared first on Carbon Brief.

    Guest post: How a record-high ‘energy imbalance’ is driving global warming

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