Net-zero pipe dreams: Why fossil fuels cannot be carbon neutral
With fossil fuels being branded “carbon neutral” left and right, this Carbon Market Watch investigative report analyses 18 recent carbon neutrality claims in detail, uncovering that they amount to brazen greenwashing.
These “carbon neutral” fossil fuel claims primarily concern liquefied natural gas (LNG) cargoes, with two relating to oil and condensate shipments. The claims were made by oil and gas majors, such as Shell, BP, Total, Gazprom, Eni, Petronas, PetroChina, CNOOC, Cheniere and Occidental. They also involved major financial groups and traders like Macquarie, Mitsui & Co., Trafigura, Reliance Industries, and Diamond Gas International (a subsidiary of Mitsubishi).
These firms expect the outside world to unquestioningly accept that their continued production and burning of fossil fuels is climate-compatible as long as they stick a “carbon neutral” fig leaf over it.
After analysing these 18 claims against six criteria for transparency and environmental integrity, Carbon Market Watch has definitively found that each claim amounts to greenwashing. Our key findings are as follows:
- No firm respects the most basic requirements to begin to even consider calling a product, let alone a fossil fuel, “carbon neutral”. The firms ignore mitigation measures they must take and instead buy carbon credits to purportedly undo their damage.
- Even the logic of such “compensation” is fatally flawed for ignoring longevity. Burning fossil fuels, which have been buried in the ground for ages and will emit greenhouse gases affecting the atmosphere for centuries, cannot be offset with temporary storage in living ecosystems or with credits not delivering additional GHG reductions.
- The firms never disclose full details about the source of credits, obstructing third-party review to gauge quality. This lack of transparency is highly problematic as they already erroneously consider that buying credits is sufficient to claim “carbon neutrality”.
- No firm publicly discloses the price paid for their credits, raising concerns these are extremely cheap transactions that are almost certainly at prices well below what is needed for the firm to actually reduce its own value chain emissions.
- No firm publicly discloses, in its claim, an estimate of lifecycle emissions for the specific fossil fuel cargo it is calling “carbon neutral”. One-third of claims do not even factor in Scope 3 emissions (related to the final combustion of the fossil fuels), despite the fact that these represent the vast majority of total lifecycle emissions.
Ultimately, these greenwashing claims may help clean up the image of oil and gas firms at minimal cost but they do nothing to clean up the sector’s climate-wrecking emissions and undermine the ‘polluter pays’ principle.
25 Oct 2021