Oil and gas majors and their affiliated trade associations have striven behind the scenes to negatively influence government regulation on carbon credits in the United States. This report builds on our first Oil Spill report, and highlights how the fossil fuel sector’s influence is exrercised both at the federal level, with the Commodity Futures Trading Commission (CFTC), and at the state level, where some fossil fuel interests have spent $273 million dollars in lobbying California climate legislation over two decades between 2005 and 2026.
To sate their voracious appetite for greenwashing offsets, major fossil fuel companies have invested considerable resources and effort to lobby, both directly and indirectly, to weaken carbon market federal regulations in the United States and state regulations in California, concludes a new Carbon Market Watch investigation.
Despite belonging to the highly polluting fossil fuel sector, major oil and gas companies are not only among the largest buyers of carbon credits, they are also heavily invested in seeking to shape the voluntary carbon market. This report zooms in this outsized role. It focuses on how oil supermajors employ greenwashing strategies, including offsetting their emissions and using carbon credits to give the illusion of meaningful progress towards reaching their climate targets. Driven by a desire to safeguard the supply of cheap and low-quality carbon credits, some fossil fuel companies have also been engaging with policy and governance processes through both formal and informal channels.
Oil and gas interests pollute the carbon crediting rulebook and invest heavily in a marketplace flush with low-quality carbon credits. A new Carbon Market Watch report demonstrates how some of the world’s biggest fossil fuel companies use their oversized leverage to influence major decision-making bodies in the voluntary carbon market.
CMW commissioned research to analyse the rigour of Verra’s methodologies for the retirement of coal-fired power plants. In Carbon Market Watch’s view, the results of this research demonstrate weaknesses in Verra’s coal crediting methodology that could seriously undermine its ability to deliver credible, additional, and environmentally sound carbon credits.
The fruits of voluntary carbon market projects are rarely shared fairly with local communities and indigenous peoples. A project in Sierra Leone has come up with a more equitable benefit sharing formula. Other countries and project developers should follow suit.
This research finds that climate impact funds support varying mitigation actions, with most funds conducting their own due diligence and encouraging companies to adopt a BVCM approach without misleading compensation claims.
A vacuum of evidence exists to prove the claims of market actors that carbon credits purchased on the voluntary carbon market accelerate corporate internal decarbonisation. An examination of reality shows that market confidence may be driven by noise, rather than a clear signal.
Carbon markets continued to feature prominently and often worryingly at COP30. Carbon Market Watch witnessed a stark contrast between the optimism championed by the many initiatives promoting “high quality” carbon markets and the negotiation rooms where concerted efforts were made to water down Article 6 rules.
