Oil and gas giant Shell is counting discredited carbon credits towards its climate goals, drawing accusations of “bad faith” and “malintent”.
Last month, Shell used rice farming carbon credits to offset a chunk of its annual emissions, claiming to reduce the “carbon intensity” of its fossil fuel products.
But experts have long argued that the sellers of these offsets are over-counting their emissions reductions and using accounting tricks to evade checks, as a Climate Home investigation showed last year.
These accusations led leading carbon standard Verra to suspend the projects early last year and launch an investigation. Shell took them off its website as a result.
But, although Verra’s review continues, on January 9 Shell quietly retired over a million credits produced by the suspended projects, meaning it counts the claimed emissions reductions towards its climate targets.
Rachel Rose Jackson, director of climate policy at Corporate Accountability, said Shell’s actions were “shameful, dubious and reckless against the backdrop of a deadly climate emergency”.
“To retire over one million offsets from projects actively under investigation reeks of bad faith and malintent”, she added.
Carbon Market Watch’s Jonathan Crook said Shell should have at least waited until Verra’s review had ended to see if there were problems with the offsets.
If the offsets do have problems then, he added, they “have no value from a climate perspective and using them towards net carbon intensity targets is totally inappropriate”.
Shell did not reply to detailed questions on these particular offsets. But a spokesperson said that the credits the company buys are “certified in accordance with independent standards and further screened through our due diligence process”.
Claiming to lower rice emissions
The idea behind the projects is that emitters like Shell pay for Chinese rice farmers to take measures to reduce their emissions that they wouldn’t otherwise be able to afford.
Rice is traditionally grown in flooded fields known as paddies. These have more bacteria than dry fields and the bacteria breaks down decaying plants, turning them into a potent greenhouse gas called methane.
To reduce the damage to the climate and save water, the project developers claimed they would pay farmers to periodically drain their fields. With less standing water, there are fewer bacteria and less methane.
A rice field irrigated with alternate wetting and drying methods
But opinions from experts and scientific literature suggest that lots of farmers already employ this technique across China, encouraged by the central government. So they do not need incentives from carbon credit to do so.
Carbon credit rating agency BeZero Carbon has given a Chinese rice cultivation project similar to Shell’s its lowest possible score.
Its assessment says there is a “significant risk” that the emissions reduction measures are not additional to what would happen without the carbon credit money “due to the high level of government support for the project activities”.
A Climate Home investigation last year found that the project developers artificially divided up fields across several projects to pass them off as small-scale and avoid stricter checks.
Quality issues
These activities were initially given the green light by leading carbon standard Verra. But early last year, in response to concerns, it identified “quality issues”, launched a review and stopped the projects from producing any more credits.
But the suspension did not prevent offsets already in circulation from being sold or used to offset emissions.
When Climate Home approached Shell last year, the company said it was aware of Verra’s review and “would look carefully at the results when they are published”.
The company took the offsets off a webpage dedicated to its portfolio of carbon credits offered to external clients, with a spokesperson saying this was “pending Verra’s review”.
Nearly a year later, the results of the review have still not been published and the projects remain on hold. But Shell retired 1.23 million carbon credits issued by those projects, offsetting emissions equivalent to three gas-fired power plants running for a year.
A Shell spokesperson said the company had “recently retired a number of carbon credits as part of our net carbon intensity target”.
Finding a way out
Shell’s involvement in these projects is not just as a buyer. The schemes were originally set up by a Chinese firm but four years later Shell signed a series of agreements to become its exclusive agent.
The role granted Shell the right to either claim the credits against its emissions or sell them to other companies, potentially profiting from their sale.
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Before Verra suspended the projects, only a quarter of the credits issued by the projects had been used, primarily by Chinese state-owned oil company PetroChina.
Shell retired the vast majority of the remaining credits on January 9. Carbon Market Watch’s Crook says it would appear Shell “had sunk money into the projects and had these credits sitting on their books”.
“Perhaps they have not been able to find any buyers since the projects were put on hold”, he added. “Or perhaps they are doubting that the review will be positive and it will be difficult to sell or trade any of these credits in the future. So they went ahead and used them themselves”.
Shell involved in rule-making
While Verra probes the credits, it has taken the rare step of banning any further use of the rice farming methodology under which the projects were developed.
The register is now working on a new rulebook for future rice farming offsets. It says it will allow project developers “to credibly achieve emission reductions and generate high-quality credits”.
To advise them on this, Verra has appointed an Indian company which is part of Shell, raising concerns about conflict of interests.
Crook described this as a “recurring issue” in the carbon credit world. He said: “You have actors who wear all these different hats. They can sometimes develop methodologies, transact carbon credits and/or use them towards their own targets, potentially based on rules they helped develop. It raises real questions around conflicts of interest and integrity.”
A Shell petrol station. Photo credit: Tomcat MTL/Flickr
A Verra spokesperson told Climate Home it “takes potential and actual conflicts of interest very seriously” and that methodologies “undergo an extensive review process before they are finalised” and at each stage “all stakeholders, including the public, have an opportunity to evaluate and comment”.
They said: “This process is designed to promptly identify any issues with the methodology, including the opportunity to identify any perceived conflicts of interest”.
Investigation ongoing
The spokesperson said Verra does not comment on specific projects under review to avoid influencing the outcome of the investigation.
“The steps in a review, as well as the timeline for completing the review, depend on the underlying facts and circumstances, the complexity of the issues, the cooperation of third parties and other factors”, they said.
“A review may take several weeks or months to complete,” they added, “while every review is different, Verra aims to conduct an appropriately scoped review as expeditiously as possible.”
A spokesperson for Shell said: “We retire credits to compensate emissions, including those associated with the energy our customers use in transport, homes, producing goods and providing services. This approach complements our activities to avoid and reduce emissions from our own operations”.
The post “Shameful”: Shell uses carbon credits under investigation to meet climate targets appeared first on Climate Home News.
“Shameful”: Shell uses carbon credits under investigation to meet climate targets
The country’s most valuable utility didn’t like offshore wind. But a proposed merger with Dominion would include a $11.4 billion project in Coastal Virginia.
A utility megamerger announced this week would mean that the largest offshore wind project in the United States would be owned by the same company that already is the nation’s leading developer of renewables and battery storage.
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Australia’s new environmental standards are supposed to protect wildlife. Right now, they don’t.
We have one of the worst mammal extinction rates in the world. We’ve already lost 39 species, including the Christmas Island Shrew and the desert rat-kangaroo, while iconic species like the Hairy-Nosed Wombat, Pygmy blue whale and Swift Parrot continue to slide towards extinction. Forests are still being bulldozed at an alarming rate. Rivers and reefs are under serious pressure.
Fixing this sorry state of affairs was why the Federal Government promised to fix Australia’s broken national nature laws—a promise that culminated in the nature law reforms passed late last year.
A big part of these reforms is the creation of new “National Environmental Standards” — rules intended to guide decisions on projects that could damage nature.
But the Government’s latest draft standards—open for consultation until May 29th—fall dangerously short.
Instead of setting clear environmental guardrails, the draft rules risk making it easier for damaging projects to get approved, while nature continues to decline. Legal experts are warning that unless the standards are changed, they could weaken protections rather than strengthen them.
So what are these standards, exactly?
The new standards are a centrepiece of major reforms to the Environment Protection and Biodiversity Conservation Act (EPBC Act), which were passed late last year and are designed to fix a broken environmental regulatory system. They are meant to set clear rules for what environmental protection should actually look like.
In simple terms, they’re supposed to answer questions like:
- What measures should developers be made to put in place to protect threatened species?
- How do we ensure the most important habitats and natural places are not hacked away, “death-by-a-thousand-cuts”-style, from ongoing development proposals?
- When should a project simply not go ahead?
- What rules should states follow if they’re in charge of assessing development projects?
- How do we make sure nature is actually improving, not just declining more slowly?
If designed and implemented properly, these standards could become the backbone of strong, effective reformed nature laws.
But right now, they leave huge loopholes open.
The biggest problem: process over outcomes
The biggest problem with the draft standards is that they focus too heavily on whether companies follow a process—not whether nature is genuinely protected in the end. That might sound technical, but it has real-world consequences.
Imagine a company wants to clear critical habitat for a threatened species. Under a strong system, the key question should be: Will this project cause unacceptable or significant environmental harm?
But under the current draft standards, if the company follows the required steps and paperwork, the project could still be considered acceptable — even if the damage to nature is clear.
This is deeply ineffective. Destruction that checks bureaucratic check-boxes is still destruction. The standards should enforce the protection of nature—not just the ticking of procedural boxes.
A smaller definition of habitat could leave wildlife exposed
Another alarming change in the draft standards is the narrowing of how “habitat” is defined, which could have serious consequences for wildlife protection.
Habitat is more than just the exact spot where an animal is seen sleeping, nesting or feeding today; we need to think more holistically about habitat as a connected network of ecosystems that species may rely on to survive, including breeding grounds, migration corridors, areas used during drought or fire, and places they may need to move to as the climate changes.
But the draft standards effectively shrink the areas considered important enough to protect by defining habitat as only very small areas that if destroyed would certainly send the species extinct, rather than habitat which maintains and restores healthy populations able to thrive well into the future.
For animals already under pressure from habitat destruction and climate change, protecting only the bare minimum is a dangerous approach. In practice, that could mean that places which are essential for threatened species to recover and survive long term are destroyed just because they are not classified under the standards as ‘habitat’—a lose-lose outcome for biodiversity and the Australian government’s nature protection goals.
Offsets are still doing too much heavy lifting
Australians have heard the promise before: “Yes, this area will be damaged — but it’ll be offset somewhere else.” In practice, environmental offsets have severely failed to replace what was lost.
You can’t instantly recreate a centuries-old forest. You can’t quickly rebuild complex wildlife habitat. And some ecosystems simply cannot be replaced once destroyed. Yet the draft standards still rely heavily on offsets rather than prioritising avoiding harm in the first place.
The standards must reduce their reliance on offsets, and instead prioritise actual habitat protection. Because once extinction happens, there’s no offset for it.
Australia cannot afford another backwards step on nature
The Albanese Government came to office promising to end Australia’s extinction crisis and repair national nature laws. But this will be a broken promise if the huge loopholes in the National Environmental Standards aren’t addressed.
Right now, Australia is losing wildlife and ecosystems faster than they can recover. Scientists have warned for years that incremental change is no longer enough.
Strong standards could help turn things around by:
- stopping destruction in critical habitat,
- setting firm limits on environmental harm,
- requiring genuine recovery for nature,
- and making decision-makers accountable for real outcomes rather than process.
If the Government locks in rules that prioritise process over protection, Australia risks entrenching the very system that caused the crisis in the first place.
What needs to change?
The Government still has time to fix the draft standards before they are finalised over the next month.
Greenpeace Australia Pacific is calling on the government to:
- ensure decisions are based on outcomes, not just process
- ensure that all important habitat is protected, not just narrow areas
- ensuring that death-by-a-thousand-cuts is avoided by considering the “cumulative impacts” of multiple projects in a region
- ensuring offsets are only used as an absolute last resort
Australians were promised stronger nature laws—not more loopholes. Australia’s wildlife cannot afford another missed opportunity.You can help ensure the Federal Government’s final standards put to parliament are as strong as possible by putting in a quick submission here.
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