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Since 2022, Shell has sold more than 20 cargoes of liquefied natural gas (LNG) as “carbon neutral” under a new industry-led standard. Climate Home News and Dialogue Earth can now reveal that this scheme has relied in part on “phantom” carbon credits that failed to cut emissions as claimed.

The energy giant shipped the fossil fuel to buyers in East Asia and beyond, some of whom in turn pitched the gas as a “net zero solution” to their customers thanks to Shell’s ‘green’ label. 

Throughout its life-cycle – from extraction through transport and final use – LNG produces vast amounts of planet-heating carbon dioxide and methane emissions. But, using nearly 5 million carbon credits, Shell claimed to have cancelled out – on paper – the total carbon footprint of at least 23 of its LNG shipments delivered up to the end of 2023. 

The projects propping up the oil and gas giant’s “carbon neutral” marketing drive included six that claimed to slash releases of methane gas from rice paddies across eastern China. 

The emissions – purportedly avoided by introducing an improved crop irrigation method in the region – were meant to offset an equivalent amount of greenhouse gases caused by Shell’s LNG operations. 

But earlier this year it became clear that the rice cultivation projects had not delivered the promised climate benefits. Leading carbon credit registry Verra axed them – along with 31 other similar schemes – in August after finding a string of failures in their implementation. 

Now, new evidence gathered by Climate Home and Dialogue Earth casts serious doubt on whether any emissions-cutting activities were carried out on the ground at all.

Shell used phantom carbon credits to greenwash carbon neutral LNG

Chinese local authorities meant to have played a crucial role in the schemes either denied their involvement or said no such efforts had taken place, according to statements made in response to disclosure requests submitted by a risk analysis firm and seen by Climate Home. 

In addition, Dialogue Earth interviewed three rice farmers based in some of the project areas in China who said they had never heard of the carbon offset programmes and contradicted the project developers’ claims that new irrigation techniques had been rolled out there. 

Recurring scandals

The findings raise questions about Verra’s broader ability to verify claims made by offset developers and to ensure the integrity of the thousands of projects issuing carbon credits on its platform, especially as the registry cuts back its workforce

Jonathan Crook, a policy expert at Carbon Market Watch, an independent research group, said the “recurrence of such scandals in the market point to systemic and persistent issues”. 

“Clearly there’s a major problem when projects actively manipulate data, which a supposedly rigorous audit process fails to detect, thereby erroneously generating millions of phantom credits for Shell to greenwash its LNG,” he told Climate Home.


A spokesperson for Verra said it had taken “decisive action at every level at which concerns were identified” with the rice farming projects. “Verra is committed to continual improvement, particularly as we address issues arising from inappropriate conduct,” they added. 

Shell did not answer specific questions about Climate Home and Dialogue Earth’s findings in China, nor about its use of the suspect credits to deliver “carbon neutral” LNG. “We carefully source and screen the credits we purchase and retire from the market,” a spokesperson said, commenting more generally. “We’ve always been clear that carbon credits should have a verifiable carbon benefit and also deliver positive ecosystem and community impacts.”

Plan to curb methane from paddies

China’s eastern province of Anhui, a network of plains and hills traversed by the Yangtze River, is one of the country’s main rice-producing areas. Growing paddy crops provides a vital income for local farmers and strengthens the country’s food security. 

But rice cultivation also has a significant negative impact on the climate. The flooding of paddies during growing seasons encourages the formation of bacteria. As the microbes feed on the organic matter abundant in the fields, they emit vast quantities of methane – a potent greenhouse gas. 

To combat this problem, scientists came up with a relatively simple solution capable of cutting emissions by up to a half: instead of keeping the paddies flooded at all times, farmers could drain the fields periodically and, as a result, curtail the methane-releasing activity of the bacteria. 

Farmers till rice fields and transplant rice seedlings in Anqing city, Anhui province, China, June 4, 2023. In recent years, Anqing has been increasing the planting and management of high mountain varieties of rice, improving product quality, promoting farmers' income and helping rural revitalization.

Farmers till rice fields and transplant rice seedlings in Anqing city, Anhui province, China, June 4, 2023. (Photo by CFOTO/Sipa USA)

In 2017, a Chinese agricultural technology company called Hefei Luyu launched a venture to roll out this climate-friendly irrigation method across Anhui province. It partnered with Shanghai-based consultancy Libra (now known as Search CO2), an early pioneer of China’s carbon market, and together they devised a plan to sell carbon credits from at least 10 rice cultivation projects. 

Starting in late 2021, Shell got involved and gained what was described as “full agency” over the projects, becoming a broker of the credits generated by the activities after striking a series of deals with the developers. 

Climate Home first revealed Shell’s role in the rice farming schemes in March 2023, alongside their risk of generating worthless offsets due to integrity problems such as over-counting emissions reductions and questionable practices used in their development.

Farmers deny involvement

One of the projects is located in the city of Tongcheng, where farmers were informed of the benefits of intermittent flooding and of the carbon credit scheme funding the innovation, according to documents submitted by Libra in 2021 when the developers registered the projects with Verra. Over 16,000 local farmers signed up to the scheme, Libra said. 

But one farmer based in the project area told Dialogue Earth he had never heard of the carbon credit programme. He said local authorities did promote intermittent paddy flooding, alongside the rollout of a drought-resistant strain of rice, but the aim was simply to cope with limited access to water. 

”No one mentioned emissions reduction or trading ever,” the farmer said, adding that the new method had not caught on widely in the area because of the lower rice yields it produces. Climate Home and Dialogue Earth granted anonymity to the farmers interviewed for this story due to the sensitive nature of the topic. 

Experts quit carbon market watchdog in row over quality label for forest credits

In addition, the developers of the carbon credit scheme said cement ditches and reservoirs needed for the new irrigation method had been built in Tongcheng by early 2018, when the carbon crediting period started. But the farmer told Dialogue Earth that was not the case and the government hardened the channels only five years later, in 2023.

In nearby Yatan Town, which falls under a separate project linked to Shell, a different farmer said his village still uses traditional mud channels, despite the project documents claiming cement ditches were in operation there since 2017.

Government rejects developers’ claims

In all the project areas, developers including Hefei Luyu said they worked closely with local government bodies to sign up farmers to the initiative, provide training on the new irrigation technique and build key infrastructure, among other things.

Agricultural bureaus – an influential part of China’s state machinery – acted as the “main manager” in the construction phase of the different projects, according to near-identical documents submitted by Libra for the schemes. 

But, when local authorities were asked about their involvement, a very different picture emerged. Ecoptima, an AI-driven risk intelligence agency, contacted more than 70 government authorities across China after its data analysis identified anomalies with the projects.

One of the responses sent by Chinese local government authorities

In written responses obtained by Ecoptima and seen by Climate Home, some local government agencies denied their involvement in the rice cultivation projects registered with Verra, while others said they had no knowledge of them. 

Tongcheng’s Bureau of Agriculture and Rural Affairs said in July 2024 that it was “not currently included in this project, nor had authorisation been granted for the development of related enterprises”. It added that it held no records about the scheme. 

The agricultural office for Wangjiang County, which has jurisdiction over Yatan Town, said it had “not carried out carbon reduction and measurement work related to rice production, and [had] not authorised enterprises to develop” any project. 

Verra imposes sanctions

The evidence gathered by Climate Home and Dialogue Earth contrasts not only with the information supplied to Verra by the project developers, but also with assessments made by auditors responsible for verifying that the information provided is true and in compliance with the carbon standard’s rules. 

Four auditing firms greenlit a total of 37 rice cultivation projects – including the Shell-linked ones – through to February 2023, when Verra suspended the schemes and started a review after becoming aware of concerns with how the rules were being applied.

More than 200 additional Chinese rice farming projects had also sought registration with Verra, but had not completed the process before Verra took action on those that had already been approved. 

A farmer works on transplanting rice seedlings following days of heavy rainfall in China. REUTERS/Tingshu Wang

A Verra spokesperson told Climate Home that its subsequent 17-month investigation had brought to light an “unprecedented situation”. The carbon standard identified a long string of “serious issues”, including concerns about the accuracy of the baseline used to calculate emissions reductions and about the project activities claimed to have been implemented. 

Verra also found weaknesses in the audits of the projects, with the companies that carried them out unable to fully explain how they had verified “independently and objectively” the credibility of the information provided by the project proponents. 

The failures were so grave that, at the end of August this year, Verra revoked all the rice cultivation projects and announced “significant sanctions” against the project developers and the auditing firms involved. 

The Verra spokesperson told Climate Home that if the auditors do not put “sufficient plans in place to prevent recurrence of these issues”, it may suspend them from conducting audits of other projects.

“Flawed” carbon market

Commenting on the case, Chauncey Wang, co-founder of Ecoptima, said it exposes “critical weaknesses” in the current system and pointed to the failure of auditors as “symptomatic of a deeper, persistent market flaw”. 

“We’ve placed our trust in supposedly independent parties only to find that true independence is elusive in this market,” he told Climate Home. 

Wang added that Ecoptima’s investigation into the rice projects revealed implementation challenges that could have been addressed through early detection.

Verra axing of Shell’s rice-farming carbon credits in China fuels integrity fears

Lambert Schneider, research coordinator for international climate policy at Germany’s Oeko-Institut, said the “limited oversight” of auditors is a “key concern” in the voluntary carbon market. Verification bodies are currently hired and paid directly by the project developers. 

“Naturally, auditors do not want to lose their clients and this creates a conflict of interest,” Schneider told Climate Home. To tackle this, he suggested that carbon standards could themselves hire the auditors and the costs could be covered by project developers through carbon credit registration and issuance fees. 

Greenwashing Shell’s emissions

By the time Verra cancelled the Chinese rice projects, more than 1.6 million credits generated by the projects had been used to offset the equivalent of the annual CO2 emissions of four gas-powered plants, according to a calculator provided by the US Environmental Protection Agency. 

Shell emerged as the largest single user of the credits. In January, while Verra’s investigation was ongoing, the oil and gas major quietly retired over a million credits issued by the troubled projects. A carbon credit is retired when its owner declares that it has been used to mitigate emissions.

At least half of those retired credits helped prop up the company’s “carbon neutral” LNG campaign, according to a document published in June by Shell, which stated that the carbon credits “represent genuine and additional GHG [greenhouse gas] emissions reductions”. 

Laurie van der Burg, global public finance manager for advocacy group Oil Change International, said it is “misleading” to claim LNG activities are “carbon neutral” by using carbon offsets. “It is simply an act of greenwashing,” she added. 

President Biden sets US emissions goal for 2035 in the shadow of Trump

Other users of the phantom rice farming credits include Chinese state-owned fossil fuel firm PetroChina, Singapore-based DBS Bank and UK energy supplier OVO Energy. 

A spokesperson for Verra said it had requested “full compensation” from developers for “all issued credits” from the revoked projects. Some compensation has already been “completed”, they added, without giving further details. 

In response to a request for comment from Climate Home, Shell repeated a statement it first made in August, which said the company was “disappointed to learn of the issues Verra identified with these projects during their recent review” and indicated it would “continue to work closely with Verra to understand the impact of their findings”.

Industry ‘can’t be trusted’

Shell was not simply a final user of the sham credits but also had a direct stake in the projects. Starting in late 2021, the firm took on the role of “authorised representative” for the 10 schemes in Anhui, meaning it acquired all “applicable rights and responsibilities” equivalent to those of the project proponent, according to contracts seen by Climate Home. 

But, in mid-October this year, nearly two months after Verra’s decision to cancel the credits, Chinese agritech firm Hefei Luyu sent a letter to the carbon standard notifying it of the “termination” of Shell’s role in the projects.  

Shell has publicly signalled a broader intention to pull back from its direct involvement in carbon credit projects. Bloomberg reported last month that the company is looking to sell the majority of its carbon offsets business.

Failure of Busan talks exposes fossil fuel barrier to UN plastics pact

Experts told Climate Home this latest scandal further undermined the carbon market’s credibility as a way of offsetting still-rising emissions from the extraction and consumption of fossil fuels.   

Van der Burg of Oil Change said Shell had been caught out using “what in essence are fake carbon offsets” as “dangerous escape hatches” to justify the growth of its LNG business. 

“This is yet another example showing that we really cannot trust the industry to make sure that those carbon credits are actually reducing emissions, and, instead, we should force them to address their pollution at source, by curtailing their fossil fuel production and sales,” she added.

This story was published in partnership with Dialogue Earth. Additional reporting was done by Shi Yi and Yuhan Niu.

(Reporting by Matteo Civillini; editing by Sebastián Rodríguez and Megan Rowling)

The post How Shell greenwashed gas with sham Chinese carbon credits appeared first on Climate Home News.

How Shell greenwashed gas with sham Chinese carbon credits

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DeBriefed 15 August 2025: Raging wildfires; Xi’s priorities; Factchecking the Trump climate report

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Welcome to Carbon Brief’s DeBriefed. 
An essential guide to the week’s key developments relating to climate change.

This week

Blazing heat hits Europe

FANNING THE FLAMES: Wildfires “fanned by a heatwave and strong winds” caused havoc across southern Europe, Reuters reported. It added: “Fire has affected nearly 440,000 hectares (1,700 square miles) in the eurozone so far in 2025, double the average for the same period of the year since 2006.” Extreme heat is “breaking temperature records across Europe”, the Guardian said, with several countries reporting readings of around 40C.

HUMAN TOLL: At least three people have died in the wildfires erupting across Spain, Turkey and Albania, France24 said, adding that the fires have “displaced thousands in Greece and Albania”. Le Monde reported that a child in Italy “died of heatstroke”, while thousands were evacuated from Spain and firefighters “battled three large wildfires” in Portugal.

UK WILDFIRE RISK: The UK saw temperatures as high as 33.4C this week as England “entered its fourth heatwave”, BBC News said. The high heat is causing “nationally significant” water shortfalls, it added, “hitting farms, damaging wildlife and increasing wildfires”. The Daily Mirror noted that these conditions “could last until mid-autumn”. Scientists warn the UK faces possible “firewaves” due to climate change, BBC News also reported.

Around the world

  • GRID PRESSURES: Iraq suffered a “near nationwide blackout” as elevated power demand – due to extreme temperatures of around 50C – triggered a transmission line failure, Bloomberg reported.
  • ‘DIRE’ DOWN UNDER: The Australian government is keeping a climate risk assessment that contains “dire” implications for the continent “under wraps”, the Australian Financial Review said.
  • EXTREME RAINFALL: Mexico City is “seeing one of its heaviest rainy seasons in years”, the Washington Post said. Downpours in the Japanese island of Kyushu “caused flooding and mudslides”, according to Politico. In Kashmir, flash floods killed 56 and left “scores missing”, the Associated Press said.
  • SOUTH-SOUTH COOPERATION: China and Brazil agreed to “ensure the success” of COP30 in a recent phone call, Chinese state news agency Xinhua reported.
  • PLASTIC ‘DEADLOCK’: Talks on a plastic pollution treaty have failed again at a summit in Geneva, according to the Guardian, with countries “deadlocked” on whether it should include “curbs on production and toxic chemicals”.

15

The number of times by which the most ethnically-diverse areas in England are more likely to experience extreme heat than its “least diverse” areas, according to new analysis by Carbon Brief.


Latest climate research

  • As many as 13 minerals critical for low-carbon energy may face shortages under 2C pathways | Nature Climate Change
  • A “scoping review” examined the impact of climate change on poor sexual and reproductive health and rights in sub-Saharan Africa | PLOS One
  • A UK university cut the carbon footprint of its weekly canteen menu by 31% “without students noticing” | Nature Food

(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)

Captured

Factchecking Trump’s climate report

A report commissioned by the US government to justify rolling back climate regulations contains “at least 100 false or misleading statements”, according to a Carbon Brief factcheck involving dozens of leading climate scientists. The report, compiled in two months by five hand-picked researchers, inaccurately claims that “CO2-induced warming might be less damaging economically than commonly believed” and misleadingly states that “excessively aggressive [emissions] mitigation policies could prove more detrimental than beneficial”80

Spotlight

Does Xi Jinping care about climate change?

This week, Carbon Brief unpacks new research on Chinese president Xi Jinping’s policy priorities.

On this day in 2005, Xi Jinping, a local official in eastern China, made an unplanned speech when touring a small village – a rare occurrence in China’s highly-choreographed political culture.

In it, he observed that “lucid waters and lush mountains are mountains of silver and gold” – that is, the environment cannot be sacrificed for the sake of growth.

(The full text of the speech is not available, although Xi discussed the concept in a brief newspaper column – see below – a few days later.)

In a time where most government officials were laser-focused on delivering economic growth, this message was highly unusual.

Forward-thinking on environment

As a local official in the early 2000s, Xi endorsed the concept of “green GDP”, which integrates the value of natural resources and the environment into GDP calculations.

He also penned a regular newspaper column, 22 of which discussed environmental protection – although “climate change” was never mentioned.

This focus carried over to China’s national agenda when Xi became president.

New research from the Asia Society Policy Institute tracked policies in which Xi is reported by state media to have “personally” taken action.

It found that environmental protection is one of six topics in which he is often said to have directly steered policymaking.

Such policies include guidelines to build a “Beautiful China”, the creation of an environmental protection inspection team and the “three-north shelterbelt” afforestation programme.

“It’s important to know what Xi’s priorities are because the top leader wields outsized influence in the Chinese political system,” Neil Thomas, Asia Society Policy Institute fellow and report co-author, told Carbon Brief.

Local policymakers are “more likely” to invest resources in addressing policies they know have Xi’s attention, to increase their chances for promotion, he added.

What about climate and energy?

However, the research noted, climate and energy policies have not been publicised as bearing Xi’s personal touch.

“I think Xi prioritises environmental protection more than climate change because reducing pollution is an issue of social stability,” Thomas said, noting that “smoggy skies and polluted rivers” were more visible and more likely to trigger civil society pushback than gradual temperature increases.

The paper also said topics might not be linked to Xi personally when they are “too technical” or “politically sensitive”.

For example, Xi’s landmark decision for China to achieve carbon neutrality by 2060 is widely reported as having only been made after climate modelling – facilitated by former climate envoy Xie Zhenhua – showed that this goal was achievable.

Prior to this, Xi had never spoken publicly about carbon neutrality.

Prof Alex Wang, a University of California, Los Angeles professor of law not involved in the research, noted that emphasising Xi’s personal attention may signal “top” political priorities, but not necessarily Xi’s “personal interests”.

By not emphasising climate, he said, Xi may be trying to avoid “pushing the system to overprioritise climate to the exclusion of the other priorities”.

There are other ways to know where climate ranks on the policy agenda, Thomas noted:

“Climate watchers should look at what Xi says, what Xi does and what policies Xi authorises in the name of the ‘central committee’. Is Xi talking more about climate? Is Xi establishing institutions and convening meetings that focus on climate? Is climate becoming a more prominent theme in top-level documents?”

Watch, read, listen

TRUMP EFFECT: The Columbia Energy Exchange podcast examined how pressure from US tariffs could affect India’s clean energy transition.

NAMIBIAN ‘DESTRUCTION’: The National Observer investigated the failure to address “human rights abuses and environmental destruction” claims against a Canadian oil company in Namibia.

‘RED AI’: The Network for the Digital Economy and the Environment studied the state of current research on “Red AI”, or the “negative environmental implications of AI”.

Coming up

Pick of the jobs

DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.

This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.

The post DeBriefed 15 August 2025: Raging wildfires; Xi’s priorities; Factchecking the Trump climate report appeared first on Carbon Brief.

DeBriefed 15 August 2025: Raging wildfires; Xi’s priorities; Factchecking the Trump climate report

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New York Already Denied Permits to These Gas Pipelines. Under Trump, They Could Get Greenlit

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The specter of a “gas-for-wind” compromise between the governor and the White House is drawing the ire of residents as a deadline looms.

Hundreds of New Yorkers rallied against new natural gas pipelines in their state as a deadline loomed for the public to comment on a revived proposal to expand the gas pipeline that supplies downstate New York.

New York Already Denied Permits to These Gas Pipelines. Under Trump, They Could Get Greenlit

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Factcheck: Trump’s climate report includes more than 100 false or misleading claims

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A “critical assessment” report commissioned by the Trump administration to justify a rollback of US climate regulations contains at least 100 false or misleading statements, according to a Carbon Brief factcheck involving dozens of leading climate scientists.

The report – “A critical review of impacts of greenhouse gas emissions on the US climate” – was published by the US Department of Energy (DoE) on 23 July, just days before the government laid out plans to revoke a scientific finding used as the legal basis for emissions regulation.

The executive summary of the controversial report inaccurately claims that “CO2-induced warming might be less damaging economically than commonly believed”.

It also states misleadingly that “excessively aggressive [emissions] mitigation policies could prove more detrimental than beneficial”.

Compiled in just two months by five “independent” researchers hand-selected by the climate-sceptic US secretary of energy Chris Wright, the document has sparked fierce criticism from climate scientists, who have pointed to factual errors, misrepresentation of research, messy citations and the cherry-picking of data.

Experts have also noted the authors’ track record of promoting views at odds with the mainstream understanding of climate science.

Wright’s department claims the report – which is currently open to public comment as part of a 30-day review – underwent an “internal peer-review period amongst [the] DoE’s scientific research community”.

The report is designed to provide a scientific underpinning to one flank of the Trump administration’s plans to rescind a finding that serves as the legal prerequisite for federal emissions regulation. (The second flank is about legal authority to regulate emissions.)

The “endangerment finding” – enacted by the Obama administration in 2009 – states that six greenhouse gases are contributing to the net-negative impacts of climate change and, thus, put the public in danger.

In a press release on 29 July, the US Environmental Protection Agency said “updated studies and information” set out in the new report would “challenge the assumptions” of the 2009 finding.

Carbon Brief asked a wide range of climate scientists, including those cited in the “critical review” itself, to factcheck the report’s various claims and statements.

The post Factcheck: Trump’s climate report includes more than 100 false or misleading claims appeared first on Carbon Brief.

https://www.carbonbrief.org/factcheck-trumps-climate-report-includes-more-than-100-false-or-misleading-claims/

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