30 July 2024
Carbon offsets often ineffective for cutting corporate emissions, new evidence reveals
BERLIN, 30 July 2024 – The Science Based Targets initiative (SBTi), a leading authority in corporate sustainability standards, has released the results of a call for evidence concerning the use of environmental attribute certificates, notably offsetting, in corporate climate goals. The results indicate that carbon credits are ineffective in delivering emission reductions [1].
“Today’s findings align with numerous studies showing that carbon offsets are an ineffective tool for cutting emissions. The problem becomes clearer when examining the case of Amazon. The company claims to have achieved 100% renewable energy across its operations, including its power-hungry data centres, through the purchase of renewable energy credits. Yet its carbon footprint has increased by 34% since it launched its Climate Pledge in 2019. The SBTi should retract its plan to allow offsets in corporate climate targets, or it risks becoming a tool for precisely this kind of greenwashing,” said Jill McArdle, International Corporate Campaigner at Beyond Fossil Fuels.
The report’s release follows a period of controversy sparked by the SBTi Board of Trustees’ decision to include environmental attribute certificates, including carbon credits, in corporate climate targets to address scope 3 emissions – emissions that result from activities from assets not owned or controlled by the reporting organisation [2]. This move prompted significant opposition from SBTi staff [3], advisory group members, NGOs [4], academics, and business leaders, who argue that relying on offsets could delay meaningful emissions reductions, as companies can purchase credits rather than make substantive changes in their operations.
Today’s findings not only challenge the SBTi’s Board of Trustees plan to introduce offsetting as an option for scope 3 emissions but also cast doubt on the standards already set by the Greenhouse Gas Protocol (GHGP) – another leader in the corporate sustainability standards sector – which currently allows certified renewable energy projects around the world to issue credits that companies can purchase to offset their own emissions.
“As the Greenhouse Gas Protocol undergoes its own review, it is crucial that it ensures corporate climate accounting is rigorous, scientifically sound, and focused on achieving actual emission reductions, rather than relying on credits that do not deliver real-world climate benefits,” McArdle added.
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Contacts:
Jill McArdle, International Corporate Campaigner, Beyond Fossil Fuels [email protected], +32 456 723 993
Julia Pazos, Communications Officer, Beyond Fossil Fuels [email protected], +13109949692
Notes:
- The synthesis report of the evidence on carbon credits found that ‘The empirical and observational evidence in Tiers A and B (those with less risk of bias or irrelevance) suggests that various types of carbon credits are ineffective in delivering their intended mitigation outcomes.’ It also noted that ‘The evidence submitted to the SBTi generally suggests that there could be clear risks to corporate use of carbon credits for the purpose of offsetting. This includes potential unintended effects of hindering the net-zero transformation and/or reducing climate finance.’ https://sciencebasedtargets.org/resources/files/Evidence-Synthesis-Report-Part-1-Carbon-Credits.pdf
- Statement from the SBTi Board of Trustees on the use of Environmental Attribute Certificates (EACs), including carbon markets, against scope 3 emission reduction targets: https://sciencebasedtargets.org/news/statement-from-the-sbti-board-of-trustees-on-use-of-environmental-attribute-certificates-including-but-not-limited-to-voluntary-carbon-markets-for-abatement-purposes-limited-to-scope-3
- SBTi staff response to SBTi Board of Trustees’ statement on the use of Environmental Attribute Certificates (EACs), including carbon markets, against scope 3 emission reduction targets: https://www.dropbox.com/scl/fi/gvjkqr4k4cdtt57qit9s6/SBTi-Staff-Response-to-the-Board-of-Trustees-April-9-Statement.pdf?rlkey=o38yubknqezjqzim44wjtk5fb&e=4&dl=0
- Joint statement issued by 80 NGOs, calling for scientific and credible rules on carbon accounting and corporate climate target setting, and for the exclusion of offsetting from voluntary and regulatory frameworks on climate transition planning:
https://beyondfossilfuels.org/wp-content/uploads/2024/07/Joint-CSO-Statement-Offsetting.pdf - The Greenhouse Gas Protocol is updating its standards for emissions reporting. Feedback from a recent public consultation will guide these updates. Draft guidelines will be shared for review in 2025:
https://ghgprotocol.org/ghg-protocol-corporate-suite-standards-and-guidance-update-process - Amazon is spearheading an initiative which could weaken accounting standards by allowing companies to offset their real-time fossil fuel reliance. The Emissions First Partnership, set up by Amazon, seeks to make it easier for companies to buy cheap credits rather than take steps to ensure their actual real-time supply of electricity is from renewable energy: https://www.emissionsfirst.com/
- Amazon’s carbon footprint has increased by 34% since it launched its Climate Pledge in 2019: https://www.forbes.com/sites/siladityaray/2024/07/10/amazon-claims-it-achieved-100-renewable-energy-target-in-2023-heres-what-it-means/
- Scientific literature on carbon credits has shown significant quality issues with carbon crediting including:
- the likelihood that credits are not additional, i.e. that any reduction in emissions would likely have occurred whether it issued the carbon credit or not;
- the difficulty to set meaningful baselines, i.e. establish what would have happened in the absence of the project, and the temptation to set unrealistic baselines that allow for the generation of more carbon credits;
- the potential for leakage or rebound effects, for example, by shifting emissions rather than preventing them;
- non-permanent carbon removal where stored carbon can be re-released due to reasons beyond the project owner’s control and which is often falsely equated with the permanent reduction of emissions;
- social and environmental harms showing that projects have been imposed without local consent or violated the land rights of Indigenous Peoples and local communities. About: Beyond Fossil Fuels is a collective civil society campaign committed to ensuring all of Europe’s electricity is generated from fossil-free, renewable energy by 2035. It expands and builds upon the Europe Beyond Coal campaign, and its goal of a coal-free Europe in power and heat by 2030 at the latest. www.beyondfossilfuels.org