What's wrong with Shell's plan to offset your carbon emissions – Quartz

Shell wants to make fossil fuels more enjoyable for the environmentally conscious consumer.

From April 17 in the Netherlands (and later in other countries), the oil giant will give customers to the fuel pump the opportunity to add € 0.01 per liter of fuel, which the company will then use to "offset" carbon emissions. of this essence. According to a Shell press release, this money will be used to buy carbon credits from "nature-based" projects.

This is not the first oil company to resort to this type of scheme. In recent years, BP has been operating Target Neutral, a platform for anyone to buy carbon credits. BP claims to have offset some 3 million tonnes of carbon dioxide. In terms of context, global annual carbon emissions are about 40 billion metric tons. Last month, the Italian oil company Eni announced a reforestation plan to offset some of its emissions.

Shell says its plan is bigger and bolder. It invests $ 300 million over three years. Simple calculations show that it is likely that these emissions will offset 60 million tonnes of carbon emissions. Most importantly, he says that paying a small extra for fuel will allow drivers to drive "carbon neutral".

These types of carbon offsets may work in theory but, in practice, their viability depends on the specificities of the project. (And it's worth noting that offsets just fight carbon emissions – gasoline cars still release harmful pollution from the particles in the air we breathe.)

A newly planted tree, for example, can take up to 20 years to capture the amount of CO2 promised by a carbon offsetting program. On the other hand, direct capture in the air removes CO2 directly from the air and buries it underground, providing almost instant carbon offsets.

These two types of offsets (among many others), however, result in extremely different costs. Planting trees and letting them grow to capture carbon dioxide can cost as little as $ 5 per metric tonne of carbon dioxide captured. Direct capture technology in the air is expected to reach $ 250 per tonne.

The best way to think about Shell's program is to consider it a voluntary carbon price of € 0.01 per liter of gasoline. And if you look closely at the numbers, they do not add up.

When a car consumes a liter of gasoline, it emits about 2 kg of carbon dioxide. This means that to avoid a ton of CO2, you will have to pay an extra $ 5 ($ 5.6) for every 500 liters of fuel you use. It's far too little. The most conservative estimate of future economic damage from CO2 emissions is $ 31 per tonne.

Maarten Wetselaar, Shell's director of gas and new energy, admits that the market for carbon offsets is immature. "We think that for this market to really develop, big players need to get involved," he told the Financial Times (Paywall).

Since oil companies have stopped denying climate change and accepted the facts, they have all supported publicly supported carbon pricing. (In practice, however, many lobbies continue to fund pressure groups opposed to carbon pricing.) In the past year, Shell committed to reducing emissions by 3%, including from fossil fuels it sells, by 2021. total emissions by 50% by 2050. It has even linked the executive pay to the achievement of these emission reduction targets.

And, like other companies in its sector, Shell has had to face shareholder activism that forces it to align with the goals of the Paris climate agreement (or at least to believe the efforts).

But, in reality, Shell's compensated price – borne by its customers – is not about to compensate for the likely damage caused by the use of its fossil fuels. That's why some see Shell's compensation plan as little more than public relations. "The Shell initiative is an excellent story," says Charlie Kronick, Senior Consultant at Greenpeace UK. "But 95% of Shell's capital expenditures are still related to fossil fuel extraction."

Carbon offsets should only be used as a last resort, said Gilles Dufranse, policy manager at Carbon Market Watch, a nonprofit advocacy group. The first step should be to reduce emissions. In this respect, most oil companies are far from the goals set in the Paris climate agreement.

That said, concedes Kronick, "politics is nevertheless a welcome change."

"To be fair, Shell is the leader among other oil companies," he adds. Dutch activist Follow This, who has led many campaigns on Shell's climate goals in the past, says Shell has become an industry leader in setting emissions targets and will focus on other oil companies. This is why, this year, Follow This has withdrawn a resolution that would have forced the company to set even stricter climate targets.