According to Trove Research, 5% of all carbon credits purchased this year were used to offset fossil fuel shipments – an increase from years past.
Trove found a “surge in the use of carbon credits for hydrocarbon products,” often marketed as being “carbon neutral.” 4.6 million units were used to offset hydrocarbon shipments in 2021, compared with 1.2 million in 2020.
Companies using offsets include Royal Dutch Shell, BP, and Total.
The carbon credit industry has expanded this past year. In 2018 it was valued at $300 million. It is now on track to reach $100 billion by 2030. Some experts believe it could even reach $22 trillion by 2050.
If you aren’t familiar with carbon credits, the premise is quite simple. Every carbon credit represents one metric ton of carbon. That metric ton of carbon is then “offset” through an environmental project that will remove one ton of carbon from the atmosphere through an environmental project, such as reforestation.
Some critics feel that while the carbon credit industry makes many promises, it fails to deliver.
Jonathan Crook of Carbon Market Watch said that offsets are “nothing more than a desperate and shameless attempt by oil and gas majors to keep business-as-usual activities and hoodwink the public.”
While some concerns are fair – such as the need for better oversight and verification – the offset industry is improving. High-quality offsets are being generated, and the tools used to measure them are advancing. Governments and companies alike recognize their value, which is a significant reason behind the industry’s growth.
When used in conjunction with technological advances and increased regulation, carbon offsets play an important role in the fight against climate change.
Currently, the volume of Liquified Natural Gas (LNG) shipped with a carbon-neutral claim is about 0.4% worldwide.