“Criticism Surrounds Shell’s Sale of Phantom Carbon Credits”
Shell has come under scrutiny after a recent report by Greenpeace Canada revealed that the company sold millions of carbon credits for reductions in greenhouse gas emissions that were never actually achieved. This allowed Shell to profit from its carbon capture and storage project, known as Quest, located near Edmonton, Alberta.
Quest’s Phantom Credits
Under an agreement with the Alberta government, Shell was awarded emissions reduction credits for each tonne of carbon captured and stored underground at its Quest plant. This subsidy program, geared towards carbon capture, utilisation, and storage projects, allowed Shell to sell 5.7 million tonnes of what Greenpeace calls “phantom” credits, bringing in over $200 million in revenue.
Hidden Subsidies and Public Funding
The sale of these phantom credits, while not illegal, raised concerns about the effectiveness of industrial carbon pricing. Greenpeace highlighted that taxpayers had covered 93% of the costs of Shell’s Quest project, totaling $777 million from federal and provincial governments, and $406 million from carbon offsets.
To Subsidize or Not to Subsidize
Carbon capture projects like Quest are intended to reduce emissions from the oil and gas sector and combat climate change. However, as Pierre-Olivier Pineau, an energy policy expert, points out, these projects often rely heavily on subsidies, raising questions about the real impact on reducing emissions.
Alberta’s Response
In response to the report, Alberta’s Environment Minister Rebecca Schulz’s spokesperson, Ryan Fournier, dismissed the findings as a “smear job.” While acknowledging the previous support for CCUS projects, Fournier defended the subsidies as essential for driving investments in unproven technologies.
The Way Forward
As the federal government prepares to set emissions caps on the oil and gas sector, the criticism surrounding Shell’s carbon credits sale raises important questions about the effectiveness of current carbon pricing systems. Ensuring that subsidies are not creating loopholes and that real emissions reductions are achieved will be crucial in the fight against climate change.
In conclusion, the controversy surrounding Shell’s sale of phantom carbon credits sheds light on the complexities of incentivizing carbon capture projects. While these initiatives hold promise for reducing emissions, ensuring transparency, accountability, and real impact will be key in navigating the transition towards a more sustainable future.
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