Fossil fuel producers are buying large stakes in carbon companies and land to run their own carbon offset projects. Experts and insiders want it banned.
Large fossil fuel companies are making multi-million dollar investments in carbon companies and offset projects, raising concerns among industry insiders and experts the sector is funding lowest-cost and lower-quality emission offsets, rather than tackling climate change as was intended.
Corporate Carbon managing director Gary Wyatt said Shell converted an investment in its Queensland offset projects into the shareholding which allowed Shell to nominate one board director.Wyatt, who previously ran ANZ Bank’s energy trading desk, said carbon credits “fill a small bridging role” in climate policy and called for greater government regulation to reduce emissions across the broader economy. He said the fossil fuel industry should not be blamed for emissions.
A spokesperson for Woodside said its carbon business was established in 2018 to “better manage the cost and integrity of our carbon credits” and it was “open to considering an investment in a carbon developer but is pleased with our carbon business’s capability today”.However, Woodside’s decarbonisation strategy has been routinely rejected by investors as undermining international climate agreements.
The staff member questioned the company’s leadership about the new investors and was told Mitsui helped Climate Friendly by establishing connections with fossil fuel industry customers, both in Australia and abroad. Climate Friendly co-executive officers Skye Glenday and Josh Harris released a joint statement saying the company’s purpose had not changed from “profit-for-purpose” and “tackling climate change” through supporting carbon farming.
This masthead can also reveal the Australian Academy of Sciences raised concerns with the CER in 2022 that the $4.5 billion taxpayer-backed Emissions Reduction Fund had become too focused on supporting the growing carbon industry rather than abating emissions. Killin said these projects dominate the market because they were cheap to run, reducing costs for polluters while boosting profits for the carbon “gatekeepers” that own most projects and make money from trading credits.
Killin called for a “complete overhaul” to address the “market failure” where vested interests had suppressed the price of carbon and resulted in low transparency for participants and poor quality projects.
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