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Shell is linked to both sets of projects, which Verra ruled as no longer valid in August 2024 after detecting “unprecedented” failures in their implementation.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.
“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
UK imports of “green” jet fuel linked to Amazon deforestation
A US biofuels producer that exports “green” aviation fuel to Britain and the European Union has purchased beef tallow from a Brazilian supply chain tied to illegal deforestation in the Amazon, shipping data and a court document show.
Diamond Green Diesel (DGD), a major provider of sustainable aviation fuel (SAF) and renewable diesel, has sourced hundreds of thousands of tonnes of beef tallow from Brazil, alongside waste fats from other sources, over the last three years, as global demand for biofuel feedstocks soars.
Reporting by Unearthed and nonprofit investigative outlet Repórter Brasil reveals DGD’s connection to a rendering plant that has sourced supplies from a meatpacker fined for buying cattle from an illegally deforested Amazon reserve. A previous investigation by Reuters and Repórter Brasil found DGD had bought animal fat from two other rendering factories linked to supplies of cattle from illegal ranches.
The newly identified factory, Pacífico Indústria e Comércio de Óleos e Proteínas Ltda, which is based in Cacoal, a small city in the far-western Amazon state of Rondônia, has been supplied by Rondônia meatpacker DistriBoi, a 2022 court document shows.
DistriBoi was fined two years ago for illegally purchasing cattle from the state’s Jaci-Paraná conservation reserve, which has been ravaged by illegal ranching.
There is no suggestion that the companies involved were aware of deforestation at farm level. But the findings suggest a traceability gap in the supply chain of feedstocks for sustainable fuels, where cattle by-products are subject to less oversight than the primary commodities of the cattle industry, such as meat and leather.


Pristine rainforest blanketed the Jaci-Paraná reserve when it was created 30 years ago to protect traditional forest activities such as rubber tapping and nut harvesting.
Today, illegal ranching has devoured nearly 80% of its forest cover and it has become a notorious example of the devastation wrought by land grabbers in the world’s largest rainforest.
“The damage to biodiversity has been devastating,” said local Indigenous activist Neidinha Suruí, who featured in the 2025 Emmy Award-winning documentary “O Território”.
“It is sad to see what has been lost,” she said.
Greener air travel?
The “renewable diesel” and sustainable aviation fuel (SAF) that are being exported by DGD – a joint venture between US oil refiner Valero Energy Corp and Texas-based Darling Ingredients – are classed as “green” because they are made from feedstocks classified as waste, including tallow, which consists of fat separated from cattle carcasses.
Many governments and airlines are pinning their hopes for greener flying on SAF made with organic waste materials, including Britain which introduced a compulsory blending requirement last year.
Top green jet fuel producer linked to suspect waste-oil supply chain
Air travel accounts for about 2.5% of global carbon emissions and in contrast to other transport sectors that can be electrified, shrinking aviation’s carbon footprint is much more difficult.
Waste products such as beef tallow and used cooking oil (UCO) are considered the greenest of viable SAF feedstocks on the grounds that they do not create competition with foodstuffs such as soy oil or palm oil, nor increase deforestation pressure.


But there is concern that the global rush to ramp up SAF use could indirectly exacerbate deforestation pressure by increasing demand for feedstocks such as tallow and UCO.
That could increase the profit margins of cattle ranches – including illegal ones – and have other unintended consequences, such as encouraging fraud in supply chains, as Climate Home News has reported.
An investigation published in March by Climate Home News and Swedish broadcaster SVT found that Finnish biofuels giant Neste is sourcing key ingredients for its SAF from an opaque supply chain that enables fresh palm oil to be passed off as used, waste oil.
Because tallow is classified as waste by regulators in markets including the UK and EU, the green fuel industry’s most widely used certification scheme – International Sustainability and Carbon Certification (ISCC) – does not assess whether forests were cleared to rear the cattle that produced it in the first place.
This allows tallow from cattle to qualify as a sustainable feedstock for green fuels, even if they were raised on illegally deforested land.
“There is clearly an oversight within the rules if the products, in this case animal tallow, are originally coming from deforested land,” said Cian Delaney, a campaign coordinator at the clean transport and energy advocacy group Transport & Environment.
That means government SAF mandates aimed at stemming air travel emissions could help boost the earnings of cattle ranchers linked to illegal deforestation in Brazil, where ranching and other forms of agriculture have been the main driver of forest loss.
Land grabbers clear way for ranchers
Once covered by an unbroken rainforest canopy, Rondônia’s Jaci-Paraná reserve has been decimated by illegal deforestation driven by cattle ranching – a major cause of tree loss in the Amazon.
Land-grabbers have seized – often violently – and cleared more than three-quarters of its forest for pasture, as ranching has steadily advanced into the southern Amazon.
Suruí, the local Indigenous activist, said companies that buy products derived from illegal activities perpetuate environmental crimes in the rainforest.
“If there were no meat processors buying illegally sourced cattle, there would be no land grabbing and no deforestation,” Suruí told Repórter Brasil, which partnered on the new investigation with Unearthed, and a team of journalists supported by JournalismFund Europe.
Lawsuits and linked supply chains
Brazilian President Luiz Inácio Lula da Silva has pledged to end all deforestation in the country by 2030, in part by strengthening environmental enforcement in the world’s biggest rainforest.
In Rondônia, authorities have launched more than 50 lawsuits related to land-grabbing and deforestation in the Jaci-Paraná reserve alone. Local slaughterhouse DistriBoi is named in 31 of the lawsuits, including the 2024 case in which it was fined.
According to the 2022 court document, which concerned an unrelated labour dispute, lawyers for Pacífico refer to DistriBoi as the rendering plant’s “largest supplier of raw materials”.
US-based DGD received almost 15,000 tonnes of tallow from Pacífico from 2023 to 2025 at its Texas refinery, as well as used cooking oil from various countries and sources, according to trade database Panjiva.


Darling Ingredients is also a parent company of Pacífico since its 2022 acquisition of Brazilian rendering company FASA Group.
A spokesperson for Darling Ingredients denied that Pacífico had sourced beef residues from DistriBoi’s Ji-Paraná slaughterhouse – one of two that the meatpacker operates in Rondônia.
“The rendering plant Pacífico does not source any materials from the slaughterhouse Distriboi in Ji-Paraná,” the spokesperson said in an emailed response, without providing evidence or commenting directly on the content of the 2022 court document.
Darling did not respond to a follow-up question about Distriboi’s other slaughterhouse in the region, which, according to cattle transfer documents, has also bought from a farm that has illegally cleared forest within the extractive reserve.
“Our relationships are typically with the slaughterhouse, several levels removed from cattle ranchers. Regardless, we are committed to ensuring our raw materials are deforestation free. We expect our raw material suppliers to abide by our supplier code of conduct. In addition, we are in the process of requiring all [the] raw materials to attest that their material is deforestation free,” the spokesperson said in a statement.
DistriBoi said in an apparent reference to the pending Jaci-Paraná lawsuits that “the matters mentioned … are already under review, including by higher courts”. It has previously denied wrongdoing. The company’s statement did not address a question about its commercial ties to Pacífico.
Valero Energy, the major refiner that co-owns DGD with Darling Ingredients, did not respond to requests for comment, nor did DGD itself.
From slaughterhouse to SAF
In an effort to rein in carbon emissions from air travel, regulators in Britain and the EU have mandated progressively increasing SAF blending quotas in the years ahead, creating a new market for feedstocks including beef tallow.
Brazil’s exports of tallow to the US have risen sharply in recent years, up from less than 10,000 tonnes in 2021 to almost 400,000 tonnes last year, according to Panjiva, reflecting growing demand for biofuels like SAF.
In the UK, Europe’s biggest aviation market by seat capacity, jet fuel was required to contain 2% SAF by the end of 2025, rising to 10% by 2030 and 22% by 2040.
DGD shipped 134,000 tonnes of SAF worth nearly $90 million from Texas to the UK in 2025, according to trade data from Panjiva. The company also exported smaller amounts of renewable diesel to Britain.
The EU received biofuels, including small quantities of SAF, worth over $1.1 billion from DGD’s Texas refinery last year, figures show.
Is the world’s big idea for greener air travel a flight of fancy?
Unearthed’s investigation could not identify which airlines or airports buy DGD’s SAF once it arrives in Britain.
Valero, DGD’s other parent company, is positioning itself as a key player in the transition to lower-carbon fuels in the UK, where it markets its renewable diesel under the Texaco brand.
It has been an active participant in SAF policy discussions and has criticised the government’s planned cap on waste fat sources in SAF, calling them “the world’s most cost-effective production route for SAF” in a submission to parliament.
Helping to cut emissions?
Even tighter oversight over SAF feedstocks is crucial to ensure that blending mandates such as Britain’s are effectively lowering emissions, said Anna Krajinska, a director at Transport & Environment UK.
Forests store vast amounts of carbon; when they are cut down or burned this carbon is released into the atmosphere.
“If there’s tallow coming from land that’s been deforested, then those emissions might be so high that you might not be getting to the greenhouse gas reduction threshold,” Krajinska said.


But as the world’s appetite for flying keeps on growing, some experts say SAF is the only viable means to reduce aviation emissions at present.
Referring to the deforestation links identified in Unearthed’s investigation, Wouter Dewulf, an aviation economist at Belgium’s University of Antwerp, said it “would be important to assess how large this infraction is”.
“I’m quite sure you have aberrations,” Dewulf added. “But biofuels are the best alternative for the moment.”
T&E’s Delaney said there needs to be less opacity and better oversight from regulatory authorities. “Right now, there are just too many blindspots,” he added.
The post UK imports of “green” jet fuel linked to Amazon deforestation appeared first on Climate Home News.
UK imports of “green” jet fuel linked to Amazon deforestation
Climate Change
Is the Keystone XL Pipeline Back?
A company has proposed to build a crude oil pipeline crossing the Canadian border near where the long-contested project would have entered the United States.
No project better embodies the nation’s wild swings in climate and energy policy than the Keystone XL pipeline.
Climate Change
Meeting Climate Targets Requires Humanity to Reorient Its Relationship With Nature, New Study Says
A team including scientists, Indigenous people and conservationists point to the ecosystem connecting Yellowstone and the Yukon as an example of a region where humans and nature are flourishing together.
Governments cannot reach their climate goals without rethinking humanity’s relationship to the Earth.
Meeting Climate Targets Requires Humanity to Reorient Its Relationship With Nature, New Study Says
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