Greenpeace accuses China oil and gas firms of 'greenwashing' LNG purchases

Big oil and gas corporations in China and elsewhere are utilising low-quality carbon offsets to “greenwash” their natural gas imports while failing to make meaningful emissions-cutting promises, according to the environmental group Greenpeace.

PetroChina and CNOOC Gas and Power have inked long-term contracts with Shell to purchase “carbon neutral” liquefied natural gas (LNG) that employs “forest offsets” to offset carbon emissions.

Greenpeace, which has long opposed fossil fuel companies using carbon offsets to meet emissions reduction targets, claimed the “carbon neutral” label misled the public.

“For oil and gas companies in particular, carbon offsets are a smokescreen to obscure their continued, redoubled carbon emissions,” said Li Jiatong, project leader with Greenpeace in Beijing.

A request for comment was not returned by PetroChina. The parent business of CNOOC Oil and Gas stated that it was not participating in LNG acquisitions. Shell did not respond to Greenpeace’s findings.

Greenpeace said that many of the offsets were not being measured consistently and were sometimes being double tallied. Furthermore, some woods associated with offset programmes were prone to fires, which might transform them into a carbon source rather than a carbon sink.

According to Greenpeace, credits from 15 forestry carbon sink projects in China including Shell, PetroChina, CNOOC, and other firms have already been banked, but 80% of the projects planted trees that are at medium- to high-risk of being burned down.

Rising sales of “carbon neutral” LNG are being driven by a surge in gas demand, particularly in Asia. Around 85% of carbon neutral cargoes have been sold to Asian buyers, Greenpeace said.

China’s gas consumption is expected to reach 250 billion cubic metres by 2026, up from 216 bcm last year, accounting for almost half of new global demand over the period, the International Energy Agency said.

The idea of “carbon neutral” gas is likely to be on the agenda during COP28 talks starting this week, said Polly Hemming, director of the Climate and Energy Program at the Australia Institute.

While it is still a major source of greenhouse gas emissions, gas is cleaner than coal and has been described as a “bridge fuel” in the global energy transition, but anti-fossil fuel groups oppose any new gas projects.

“Stapling those offsets to fossil fuels and claiming that they are net zero – it’s bonkers,” said Hemming.