20th June 2025
One of the low carbon products that Shell – and other companies – deal in are carbon credits. Shell presents these as part of a cascade to reduce emissions:-
- Avoid creating emissions
- Reduce emissions
- Compensate for remaining emissions through the use of carbon credits as not all industries can decarbonise at the same rate, with heavy industry and transport often utilising carbon credits to achieve net-zero goals.
We actively participate in carbon markets, and have a diverse portfolio of high-quality carbon credits to help our customers reduce their carbon footprint (1)
“Carbon credits essentially represent metric tons of carbon. Simply put, one carbon credit allows or offsets one metric ton of carbon emissions.
The carbon market is where carbon credits are bought and sold. There are two kinds of carbon markets: Compliance Carbon Markets (otherwise known as Regulatory Markets) and Voluntary Carbon Markets (VCM). While carbon credits for the compliance market are government regulated, carbon offsets for the VCM are not. That doesn’t mean that they’re not vetted – simply that they’re just verified by third parties…Third-party entities are non-profit organizations that ensure that customers receive what they are paying for. They measure the amount of carbon offset through an environmental project and interpret the data, giving any offset project with their seal a green light for approval.” (2)
There are three basic types of carbon credits:
- Those from reduced emissions (typically energy efficiency measures)
- Removed emissions (carbon capture and planting forests)
- And avoided emissions (for example refraining from cutting down rainforests).(3)
Examples of the first can include capturing methane from landfill and agricultural waste and using g it as a biofuel. Or they might include providing disadvantaged families with more fuel efficient cooking or lighting equipment.
Example of the second might include reforestation, restoring peat bogs and wetlands.
Examples of the third might include making payments to farmers not to cut down prime forest but to maintain its carbon absorbing integrity, or paying for farmers to use methods such as no-till.
Shell is one of the biggest investors in carbon credits – these carbon credits are the main way in which they aim to achieve net zero by 2050. Shell can provide (at an appropriate price) their customers with carbon credits that, for example, match the carbon emissions of the fuel they buy from Shell.
The flaw seems to be that carbon credits are being used not to make good those ‘impossible to avoid’ carbon emissions such as in cement production, but as cover to allow the continued production of fossil fuels whose use can be avoided.
(2) https://carboncredits.com/how-do-you-get-carbon-credits/
(3) https://www.weforum.org/stories/2020/11/carbon-credits-what-how-fight-climate-change/
The Green Tau 