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Carbon camouflaging: How corporations are misusing carbon removals to mask their climate inaction

Carbon removals are not meant as a tool for corporate greenwashing or climate inaction. They should only be used to reduce the concentration of greenhouse gases in the atmosphere.

The 2023 edition of the Corporate Climate Responsibility Monitor (CCRM) ​assesses the transparency and quality of the climate strategies of 24 major global corporations. Only one company received a reasonable integrity rating, while all the others ranged between moderate, low and very low integrity. 

One central finding of the report was that almost all these corporate climate plans rely to some extent on offsetting, meaning that companies plan to “compensate” for their continued emissions instead of reducing them. For more than half the companies covered, carbon removals play a pivotal role in their offsetting plans.

® is for removals

According to the data collected in the CCRM, at least 14 of the 24 assessed corporation plan to use carbon removals to offset their continued greenhouse gas emissions: Ahold Delhaize, Amazon, American Airlines, Apple, Google, H&M, Holcim, Zara (Inditex), Maersk, Microsoft, Nestle, PepsiCo, Stellantis and Volkswagen. The rest simply do not disclose detailed information regarding their offsetting plans, so the number of companies depending on carbon removals could actually be higher. 

This is very troubling because carbon removals should only be used to reduce the concentration of greenhouse gases in the atmosphere and, as a last resort, to counterbalance those so-called residual emissions that cannot be eliminated in vital sectors where complete decarbonisation is very expensive if not impossible. This is because deployment of carbon removals is inherently limited due to technological constraints, energy requirements and the supply of land. There are also potential negative effects associated with some carbon removals methods, such as land grabbing and deforestation. That is why removals should be treated as a valuable and scarce resource rather than a corporate greenwashing tool.

While a common definition for residual emissions does not yet exist, thresholds today range between 5% and 10%  of total emissions. The truth is, most companies plan to use offsets (many of which are based on removals) for a much bigger share of their emissions in order to appear to achieve a vague net zero or climate neutrality target that will not significantly shrink their carbon footprints. 

Together, the corporations analysed in the CCRM plan to offset between 23% and 45% of their combined 2019 carbon footprint. The picture changes widely if we look at the businesses individually: Google, for example, plans to offset 67% of its emissions by 2030 without clarifying the project types which will be used, while Apple intends to offset 37% of its 2019 emissions by 2030 entirely with nature-based carbon removals. 

Cheap for corporations, costly for the climate

Not surprisingly, virtually all companies assessed in the CCRM that claim to use removals to neutralise their emissions rely on forestry and land-use offsets. These are the worst types of removals available on the market because they do not lead to real reductions in atmospheric concentrations of greenhouse gases. The main reason why corporations use them is because land-based removals are way cheaper than the most permanent, often technology-based, ones (prices can range from a few euros per tonne of CO2 for land-based projects to over €1,000 per tonne for direct air capture and storage).  

The removal and storage of CO2 through vegetation and soils has numerous drawbacks. First, these techniques do not lead to permanent storage, as they are vulnerable to human or natural disturbances and the continuously exacerbating impacts of climate change, and can thus easily release carbon back into the atmosphere. Second, it can take a long time for some land-based removal methods (such as reforestation and rewetting peatland) to absorb carbon from the atmosphere, time we simply do not have in the context of the unfolding climate breakdown. Third, they are more difficult to monitor and verify and, so, cannot be considered real removals. 

Insetting: Worse than offsetting

Another problematic trend is the use of the term ‘insetting’ to refer to the financing of removals or other climate-related projects within a company’s own value chain as an alternative to offsetting. While the two concepts are different in name, they are, in practice, the same thing. 

Even worse, by choosing the insetting approach, companies may decide not to seek independent measurement and verification of the removals projects, resulting in completely unregulated offsetting. Nestlé and PepsiCo made insetting a significant component of their medium- and long-term pledges through non-permanent land-related carbon removals.

(Mis)leading by example

Despite professing themselves “climate leaders”, the companies assessed are not really leading by example. With a combined revenue of over €3 trillion and responsible together for some 4% of global emissions, they should be made accountable for solving the climate crisis they contributed to creating and from which they make profits. One solution is for companies to finance permanent or land-based removals projects (the latter having at least other environmental benefits) inside or outside their value chain without claiming to neutralise their emissions (using so-called contribution claims) in parallel to deep and sustained emissions reductions. 

So far, only a few companies do so. The findings of the CCRM show that, left to their own devices, most companies will not make the best use of the scarce resource that is carbon removals. Separating removal and emission reduction targets is needed if we are to achieve our collective climate goals. Companies can help reach those separate targets but should not be able to claim net zero or climate neutrality in the process.

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