Shell dominated the $1.4bn global market for carbon credits last year as oil and gas companies scaled back their spending on clean energy and relied more heavily on offsets to reach their climate targets than any other sector.
The voluntary carbon market runs alongside larger and more expensive trading systems run by governments, including the EU’s Emissions Trading System under which polluters trade permits giving them the right to emit.
Shell uses credits to help keep some of its climate promises, including a target to cut emissions per unit of energy sold by 15 to 20% by the end of the decade compared with 2016.
To be used as offsets, credits must first be “retired”, meaning they cannot be traded further so the saving can only be counted once.
Voluntary carbon markets outside the jurisdiction of governments have been rocked by accusations of fraud, double-counting, abuse of indigenous communities and flawed methodologies.
The fossil fuel sector overall was responsible for more than four in 10 credits used last year.