FIFA, the World Cup, Saudi Arabia, Big Polluters, and junk carbon credits

Oh, and DelAgua, yet another carbon trading company incorporated in a tax haven.

On 31 October 2024, FIFA announced that the Kingdom of Saudi Arabia was the sole bidder for the 2034 World Cup. On the same day, Gianni Infantino, FIFA’s president stated on his Instagram account that the 2034 World Cup is “set to be hosted” in Saudi Arabia — even though the official vote was more than a year away.

On 25 April 2024, FIFA announced its biggest sponsorship deal ever: US$100 million per year, with Aramco, the Saudi Arabia state-owned oil and gas corporation. The company is the main source of funding for Saudi Arabia’s absolute monarchy that restricts almost all political rights and civil liberties in the country.

On 11 December 2024, FIFA formally announced that the host nation for the 2034 World Cup will be Saudi Arabia.

The decision to host the World Cup in Saudi Arabia and the sponsorship deal with Aramco follow the disastrous decision to hold the 2022 World Cup in Qatar.

Saudi Arabia is proposing to build 11 new stadiums, more than 185,000 new hotel rooms, and major infrastructure projects including transport connections for the World Cup. The Guardian estimates that thousands of migrant workers died during the construction of seven new stadiums before the World Cup in Qatar. The situation in Saudi Arabia is likely to be just as bad.

Then there’s the environmental impact of the new stadiums, which are unlikely to be used after the World Cup. While Saudi Arabia’s football clubs have spent huge sums of money on famous footballers recently (including Cristiano Ronaldo, Karim Benzema, and Neymar), the average attendance for the Saudi Pro League in 2023-24 was just 8,158.

The Aramco sponsorship deal

FIFA has a “Sustainable Sourcing Code” that also covers sponsorship deals. The deal with Aramco is blatantly in breach of the Code, which requires, for example, adherence to the UN Framework Convention on Climate Change.

Aramco is the world’s largest oil and gas producer and is expanding its fossil fuel extraction. Carbon Majors states that, “Aramco advocates against the energy transition and continues to promote the role of fossil fuels in the future energy mix”.

In 2021, ClientEarth filed a legal complaint with the UN accusing Aramco of “committing the largest ever climate-related breach of human rights law by a business”. UN experts responded in June 2023 with a warning that Aramco’s operations “appear to be contrary to the goals, obligations and commitments under the Paris Agreement”.

The website Play the Game recently published an article looking into the Aramco sponsorship deal and Aramco’s “dismal record on carbon emissions”. Written by Andy Brown, Philippe Auclair, Jack Kerr, Samindra Kunti, and Steve Menary, the article states that “Aramco’s claims of green credentials are based on a combination of carbon offsetting and carbon capture technology.”

The Regional Voluntary Carbon Market Company

In October 2022, Saudi Arabia launched the Regional Voluntary Carbon Market Company (RVCMC). The RVCMC is 80% owned by the Public Investment Fund (Saudi Arabia’s sovereign wealth fund) and 20% by the Saudi Tadawul Group Holding Company (which is 60% owned by the Public Investment Fund).

Play the Game notes that “there are significant overlaps between the owners and directors of PIF, Aramco, and the RVCMC”:

• Yasir Othman Al-Rumayyan is governor of the PIF and chairman of Aramco.

• Riham ElGizy is CEO of the RVCMC. She previously worked for the PIF, Aramco, and BP.

• Rania Nashar is chairwoman of the RVCMC. In 2021, she joined the PIF as an advisor to Al-Rumayyan and is a board member of the Tadawul Group.

On 12 November 2024, the RVCMC launched its voluntary carbon market exchange platform. The launch came the day after Article 6.4, the carbon trading mechanism under the Paris Agreement, was agreed at COP29 in Baku.

To mark the launch, the RVCMC auctioned 2.5 million carbon credits at a price of US$10 each. Aramco was among the companies buying carbon credits. In the two previous RVCMC auctions, Aramco bought the most carbon credits.

Aramco is using its carbon credits to justify shipping more oil. Aramco’s 2024 second quarter financial results states that,

Aramco seeks to mitigate GHG emissions through lower-carbon emissions solutions. The Company delivered its first independently-verified carbon offset crude cargo through a pilot shipment of two million barrels of Arabian Light crude oil. . . . Contributing to the lower carbon intensity of the shipment were emissions reduction initiatives across relevant facilities and the use of offsets for residual emissions sourced from the Saudi-based Regional Voluntary Carbon Market.

Junk carbon credits

Play the Game partnered with Aria, a non-profit research organisation, to investigate the credibility of the projects generating the carbon credits sold at the RVCMC’s June 2023 auction, where 2.2 million carbon credits were sold.

They concluded that “the majority of carbon credits purchased by Aramco to offset its emissions are connected to projects in which the effectiveness of carbon removal was overstated or discredited”.

A list published on the RVCMC website (but now removed) reveals that 13 projects were involved. Three are cookstove project, three are large-scale wind power projects, and two are large-scale solar projects. Large-scale wind and solar projects are often not additional — the projects would have gone ahead regardless of sales of carbon credits from the project.

Almost half of the carbon credits sold in the June 2023 auction came from cookstove projects.

More than 740,000 carbon credits came from the DelAgua Clean Cooking Grouped Project in Rwanda, the biggest cookstove project in the world. The project is verified by the Washington DC-based carbon certifying company Verra.

In cookstove projects, the fraction of non-renewable biomass (fNRB) represents the percentage of wood used for cooking that is unsustainably harvested. If this figure is inflated, it increases the number of carbon credits that can be issued by the project.

The DelAgua project in Rwanda has a fNRB value of 91%.

Play the Game spoke to Barbara Haya, project director of the Berkeley Carbon Trading Project at the University of California, Berkeley. Haya is a co-author of a study published in January 2024 in Nature Sustainability titled, “Pervasive over-crediting from cookstove offset methodologies”. The study found that the “project sample is over-credited 9.2 times”.

Haya told Play the Game that a more realistic fNRB value for Rwanda would be 29%.

The project developer (and Verra’s auditors) assumed that 100% of cookstoves were used. “The academic literature shows that adoption rates are, on average, 58%,” Haya tells Play the Game.

DelAgua Group

DelAgua did not respond to Play the Game’s questions. Aramco, the RVCMC, and Saudi Arabia do not appear on DelAgua’s customer list. And there is no mention of the RVCMC on DelAgua’s website.

Here’s how Neil McDougall, DelAgua Group’s Chairman explains how the company was formed:

I worked with Surrey University in partnership with Oxfam to develop a water testing kit. This was the genesis of DelAgua Group and we continue to sell the kits worldwide today. The next step was the development of a household water filter which we took to Rwanda. The Government was also keen to provide clean cookstoves alongside the filters and in 2014 we distributed both to the poorest rural households. It became apparent that the stoves were utilized daily and provided a broad range of co-benefits, including constant access to clean boiled water, so my focus became the stoves. The biggest challenge was how to provide a stove to the rural poor most in need, but for whom a stove is unaffordable. The answer lay in carbon financing and DelAgua was one of the first stoves projects to adopt this innovative approach which has enabled us to operate at scale and for the long term in the way that grant and philanthropically funded projects are unable to.

According to the project documents, the company carrying out the cookstove project in Rwanda is called DelAgua Health Rwanda (Voluntary) Limited, with an address in Kigali, Rwanda. This company is not listed on OpenCorporates.

However, several other companies with very similar names are listed:

• DelAgua Health Rwanda (Implementation) Limited — incorporated in the Bahamas.

• DelAgua Health Rwanda (Implementation) Limited — incorporated in Rwanda on 18 September 2012.

• DelAgua Health Rwanda Implementation (Korea) Limited — incorporated in the Bahamas.

• DelAgua Group Limited — incorporated in the Bahamas.

• DelAgua Health Limited — incorporated in the Bahamas.

• DelAgua Health Rwanda Limited — incorporated in the Bahamas.

In addition, there are several related companies incorporated in the UK:

• DelAgua Water Testing Limited — incorporated on 20 September 2006.

• Test Technologies Holdings Limited — incorporated on 28 January 2008.

• Quick-Test Technologies Limited — incorporated on 28 January 2008.

DelAgua Water Testing Limited’s most recent accounts (December 2023) explains that, “The ultimate controlling party is N McDougall, by virtue of his majority shareholding in the ultimate parent company DelAgua Group Limited (a company incorporated in The Bahamas.”

DelAgua, then, is yet another carbon trading company incorporated in a tax haven. In this case, The Bahamas.