Shell’s “Carbon Neutral” LNG Campaign Exposed: Phantom Carbon Credits Used to Offset Emissions

Shell has been under scrutiny for its use of rice-farming offsets in its “carbon neutral” LNG campaign. The energy giant sold more than 20 cargoes of liquefied natural gas (LNG) as “carbon neutral” using nearly 5 million carbon credits. These credits were meant to offset the carbon footprint of at least 23 LNG shipments, but recent investigations have revealed that the projects supporting these claims did not deliver the promised climate benefits.

The projects, which aimed to reduce methane emissions from rice paddies in eastern China, were found to be ineffective in cutting emissions. Verra, a leading carbon credit registry, revoked these projects in August after finding failures in their implementation. Local authorities in China denied their involvement in the projects, and rice farmers in the project areas contradicted claims made by project developers about the implementation of new irrigation techniques.

The investigation also raised questions about Verra’s ability to verify claims made by offset developers and ensure the integrity of carbon credits. Auditors responsible for verifying the projects were found to have weaknesses in their audits, leading to the revocation of all rice cultivation projects approved by Verra.

Shell, the largest user of the credits, quietly retired over a million credits issued by the troubled projects. Other users of these credits included PetroChina, DBS Bank, and OVO Energy. Verra has requested full compensation from developers for the issued credits, and some compensation has already been completed.

Experts have criticized Shell for using fake carbon offsets to justify the growth of its LNG business. They argue that the industry cannot be trusted to ensure that carbon credits are actually reducing emissions and call for a focus on curbing fossil fuel production and sales.

Shell has indicated its intention to sell the majority of its carbon offsets business, signaling a potential shift away from direct involvement in carbon credit projects. This latest scandal has further eroded the credibility of the carbon market as a way of offsetting emissions from fossil fuel extraction and consumption.