Yet more evidence that Big Polluters are using junk offsets to avoid climate action

Corporate Accountability’s research reveals that companies’ emissions reductions and carbon neutral claims are dubious at best.

A recent article in The Guardian quotes Erika Lennon, senior attorney at the Centre for International Environmental Law, as saying that,

“Racking up carbon credits doesn’t make you a climate leader. Cutting fossil fuels does. We can’t offset our way to a safe climate future. For all the talk about carbon credits accelerating climate action, they are actually greenwashing climate destruction.”

Lennon is commenting on recent research by Corporate Accountability that found that some of the world’s Big Polluters have invested in carbon offsets that are “probably junk”. These companies include ExxonMobil, Delta, easyJet, Volkswagen, Disney, Gucci, and Nestlé.

In its research, Corporate Accountability found that for 33 of the top 50 corporate buyers, more than one-third of the carbon credits they had bought are “likely junk”. That means that these companies’ claims about “carbon neutrality” and “emission reductions” are almost certainly exaggerated.

The “likely junk” rating is a result of emission cuts that would have happened anyway, such as with large hydroelectric dams, or the emissions were just shifted outside the project area, as often happens with forestry offset projects.

Erika Lennon’s comment is worth repeating. Whether or not carbon offsets are junk, meaningful climate action means leaving fossil fuels in the ground. Even if Big Polluters managed to buy carbon offsets that were “high integrity” (and let’s face it, that is an extremely big “if”), we cannot offset our way out of the climate crisis.

Rachel Rose Jackson, director of research at Corporate Accountability, told The Guardian, that,

“These findings add to the mounting evidence that peels back the greenwashed facade of the voluntary carbon market and lays bare the ways it dangerously distracts from the real, lasting action the world’s largest corporations and polluters need to be taking.”

Corporate Accountability looked at the 50 most popular carbon offsetting projects in the world. These include forestry projects, hydroelectric dams, solar and wind farms, waste disposal, and greener household appliance projects. The data was obtained from AlliedOffsets, which runs the most comprehensive carbon trading database. The top 50 projects account for almost one-third of the global voluntary carbon market.

ExxonMobil

Corporate Accountability found that the fossil fuel industry is by far the largest investor in these projects. And at least 43% of the 81 million carbon offsets bought by fossil fuel corporations have at least one fundamental flaw and are “probably junk”.

Almost half of the 3.7 million carbon credits that ExxonMobil bought are from two projects that are classified as likely junk or worthless.

The transport industry also relies heavily of carbon offsets. Corporate Accountability found that 42% of the carbon offsets bought by airlines, and 38% of those bought by car manufactures from the top 50 projects were likely worthless in terms of reducing emissions.

Delta and easyJet

More than 35% of the 41 million carbon offsets that Delta bought were from 11 offset projects that are likely worthless or junk, according to Corporate Accountability’s analysis.

In 2023, a civil class-action alleged that Delta had misrepresented itself as carbon neutral as a result of buying carbon credits. In April 2024, the judge reduced the scope of the lawsuit after Delta filed a motion to dismiss. The case continues.

A spokesperson for Delta told The Guardian that, “We have shifted away from carbon neutrality and offsets.”

In 2022, easyJet also announced that it was going to stop buying carbon offsets. But EasyJet’s proposals for biofuels are also deeply problematic.

Corporate Accountability found that more than 70% of the 11 million carbon offsets that easyJet bought were from projects classified as likely junk.

An easyJet spokesperson told The Guardian that,

“In the short period we did offset customer emissions, we had robust due diligence processes in place, with all projects recommended by expert partners and all required to meet the highest standards available.”

But easyJet’s “robust due diligence” did not prevent the company from buying carbon offsets from the Madre de Dios Amazon REDD project in Peru — which is quite possibly the worst REDD project on the planet. It involves two logging companies and overlaps with the territory of Indigenous People living in voluntary isolation.

Volkswagen, Disney, and Gucci

Volkswagen has bought 11 million carbon offsets from the top 50 projects. Of these 46% were likely junk. The Guardian reports that,

The German carmaker recently announced a joint venture to develop its own carbon credit projects and said they increasingly rely on on-site inspections, due diligence and audit processes to verify projects.

More than 60% of Disney’s 5.8 million carbon offsets are from two offset projects that Corporate Accountability classified as likely junk or worthless.

One of the projects that Disney has bought carbon offsets from is the Alto Mayo REDD project in Peru.

The carbon certifying company Verra describes the project as “a good example of countless other projects that leverage carbon finance to provide a lifeline to communities living in and around those forests”. But the reality is that this is an extremely controversial project. Local people have been violently evicted from the project area, the number of carbon offsets from the project has been grossly exaggerated, and the project relies on a model of fortress conservation backed by heavily armed forest rangers.

Gucci has bought 4.4 million carbon offsets, of which 75% are from projects that Corporate Accountability classified as likely junk. In 2023, Gucci dropped its carbon neutral claim — not least because 60% of Gucci’s carbon offsets came from the notorious Kariba REDD project in Zimbabwe.

Nestlé

Nestlé is the world’s biggest food and beverage company. It’s the most boycotted company in the UK, and the fourth most boycotted worldwide. More than one-third of Nestlé’s 2.2 million carbon offset were from five offset projects that Corporate Accountability classified as likely junk.

Nestlé told The Guardian that it stopped purchasing credits from these projects in 2021/2022:

“Reaching net zero emissions at Nestlé does not involve using offsetting: we focus on GHG emissions reductions and removals within our value chain to reach our net zero ambition.”

Verra’s response?

Corporate Accountability’s new analysis builds on a joint investigation with The Guardian published in September 2023. That investigation found that:

• A total of 39 of the top 50 emission offset projects, or 78% of them, were categorised as likely junk or worthless due to one or more fundamental failing that undermines its promised emission cuts.

• Eight others (16%) look problematic, with evidence suggesting they may have at least one fundamental failing and are potentially junk, according to the classification system applied.

• The efficacy of the remaining three projects (6%) could not be determined definitively as there was insufficient public, independent information to adequately assess the quality of the credits and/or accuracy of their claimed climate benefits.

• Overall, $1.16bn (£937m) of carbon credits have been traded so far from the projects classified by the investigation as likely junk or worthless; a further $400m of credits bought and sold were potentially junk.

After The Guardian published the findings of that report, Verra put out a statement describing the research as an “attack” and a “broadside against several project on the Verra Registry, based on little or no detailed analysis that they were willing to share with us”.

Rather than addressing the serious problems that the research exposes in Verra’s certification system, Verra accused The Guardian of “extensive one-sided reporting” and of leaving “its reading ill informed and unprepared to help stop the worst impacts of climate change”.

This time around Verra has said nothing publicly in response to The Guardian article.

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