UN opposes companies using carbon credits to meet climate targets

The United Nations (UN) has expressed opposition to companies using carbon credits to offset their carbon dioxide emissions, creating potential conflict with major oil and technology firms.

News platform Financial Times has reported seeing a draft document prepared by a task force convened by UN Secretary-General António Guterres, which states that companies should not use carbon credits to offset emissions outside of state-regulated schemes. Instead, the UN advocates for companies to invest in reducing their own emissions, rather than relying on the carbon trading market.

Big polluters like Chevron and ExxonMobil, as well as tech companies like Microsoft and Apple, have included carbon offsetting in their climate plans. Carbon-intensive industries like steel and cement also use carbon credits to meet net-zero targets.

The proceeds of each credit funds a project that makes a cut or saving of CO₂ from the atmosphere, which could mean protecting an area of rainforest from deforestation or capturing and storing CO₂ underground. However, many schemes have been criticised because the amount of carbon removed or avoided is unverifiable or not permanent.

Jeff Swartz, vice-president at BP’s trading and shipping arm and a board member at the Integrity Council for the Voluntary Carbon Market told the Financial Times, “I would hope and I would expect that serious organisations that are committed to protecting ecosystems . . . don’t shut down an avenue for channeling that carbon finance.”

Swartz, also a board member at industry body the Integrity Council for the Voluntary Carbon Market, said many of these ecosystems could be “at risk today of failing if they don’t get the sufficient level of climate finance”.

Industry experts predict growth in the carbon credit market, with Boston Consulting Group in partnership with Shell last year publishing last year an estimate suggesting it could reach $10bn to $40bn annually by the end of the decade. However, the market’s value dropped to $900mn last year from $1.4bn in 2022 as per data provider AlliedOffsets.

Guterres has previously criticised the reliance on carbon credits in a speech last year, urging businesses and investors to focus on cutting their own emissions and avoiding dubious offsets.

According to the Financial Times, the UN draft document prepared by the UN task force on global carbon markets, a group convened by the UN secretary-general’s climate action team, said: “Carbon credits used cannot be counted as their [polluters’] own emission reductions” when purchased in voluntary markets outside of government-regulated schemes in which companies can trade permits giving them the right to pollute.

The task force had input from leading UN agencies including the UN Framework Convention on Climate Change, which oversees the co-ordination of global efforts on climate issues, including at COP, the annual international climate gathering, where the development of carbon markets is a focus of attention.

Previous Article

Terex to acquire Environmental Solutions Group in $2Bn

Next Article

Paris 2024 aims to become greenest Olympic: Organisers




Related News
ESG Post mobile view









    ESG Post mobile view

    ESG Post mobile view
    Sign Up for Our Newsletter