SINGAPORE (Reuters) – Major oil and gas corporations in China, including PetroChina and CNOOC Gas and Power, have come under scrutiny for utilizing subpar carbon offsets, thereby engaging in what environmental group Greenpeace deems as “greenwashing.” Greenpeace asserted on Monday that these companies are obscuring their insufficient emissions reduction commitments by relying on “forest offsets” to balance out carbon emissions in their imports of natural gas.
Under long-term contracts with Shell, firms like PetroChina and CNOOC Gas and Power have committed to purchasing “carbon-neutral” liquefied natural gas (LNG). Greenpeace, an organization that has consistently opposed the practice of fossil fuel producers using carbon offsets toward their emissions reduction targets, argues that the “carbon-neutral” label is misleading to the public.
Li Jiatong, project leader with Greenpeace in Beijing, commented, “For oil and gas companies in particular, carbon offsets are a smokescreen to obscure their continued, redoubled carbon emissions.”
Despite a request for comment, PetroChina did not respond. CNOOC Oil and Gas’s parent company clarified that it was not directly involved in LNG purchases. Shell, the supplier in question, declined to offer a response to Greenpeace’s report.
Greenpeace’s investigation revealed that many of these carbon offsets were inconsistently measured and, in some cases, subjected to double counting. Additionally, certain forests associated with offset schemes were identified as being susceptible to fires, potentially transforming them from carbon sinks to carbon sources.
The report highlighted that credits from 15 forestry carbon sink projects in China, involving companies such as Shell, PetroChina, and CNOOC, have already been secured. However, 80% of these projects involved trees at medium to high risk of burning down.
The surge in demand for “carbon-neutral” LNG, driven by a notable increase in gas demand, particularly in Asia, has caught the attention of environmental watchdogs. Greenpeace noted that approximately 85% of carbon-neutral cargoes have been sold to Asian buyers.
With China’s gas consumption expected to reach 250 billion cubic meters by 2026, accounting for nearly half of the new global demand, these concerns about the use of “carbon-neutral” gas are likely to be discussed during the upcoming COP28 talks, set to begin this week, according to Polly Hemming, director of the Climate and Energy Program at the Australia Institute.
While gas is considered a cleaner alternative to coal and is often viewed as a “bridge fuel” in the global energy transition, anti-fossil fuel groups oppose any new gas projects. Hemming criticized the practice of linking offsets to fossil fuels, stating, “Stapling those offsets to fossil fuels and claiming that they are net zero – it’s bonkers.”