For several years now, oil companies have been able to offset their emissions with climate projects abroad. Now the public prosecutor’s office is investigating because some of the projects probably never existed.
Companies do not necessarily have to buy expensive climate certificates to improve their carbon footprint. They can also offset their emissions through their own climate projects abroad. But the idea of the former Merkel government probably falls into the category of “nice idea, poorly executed”: In several cases, oil companies have apparently cheated and lied together with inspection bodies.
How could this happen? And why didn’t the German authorities take a closer look?
What are the fraud allegations about?
Mineral oil companies are said to have falsified emissions projects in China and thus embellished their climate balance. The Federal Environment Agency (Uba) says it received the first indications of the fraud at the end of August 2023. A Chinese company finally provided concrete evidence more than half a year later, the agency reports to the starAccording to the report, the company was named as the project sponsor in company documents, although it had nothing to do with the project. The ZDF magazine “Frontal21” was the first to report on the allegations.
What kind of projects are these?
Since 2007, oil companies have been obliged to reduce the CO2 emissions of their fuels, for example by using sustainable biofuels, green hydrogen or e-fuels, by providing electricity for electric vehicles or by recycling emissions. The so-called greenhouse gas reduction quota (GHG quota) regulates how much CO2 a company must save. In 2020, the then Merkel government decided that companies could also have climate protection projects abroad credited towards achieving the targets. This so-called upstream emission reduction (UER/emission reduction projects) primarily serves gas and oil companies to save carbon. The projects are checked by accredited bodies and then approved by the Uba.
The authority counts 79 such projects worldwide, 67 of them in China. However, the German authorities suspect trickery behind 40 of these projects. It is possible that the companies have repeatedly claimed climate protection contributions that never existed because the plants do not exist. The Uba has examined the projects using satellite images and found that in some places only steppes or chicken coops can be seen instead of plants. If the suspicion is confirmed, the climate balance of the German transport sector would be significantly worse than assumed.
Are there any implications for consumers?
That is not entirely clear. Companies can pass the costs of reducing emissions on to consumers via fuel prices. The “Neue Zürcher Zeitung” reports that the German mineral oil industry and motorists had to pay 4.5 billion euros in this way. German media report a good billion euros. Uba and the Ministry of the Environment, however, assure that the fraud did not harm consumers financially. Unlike with sustainable fuels, the UER projects are not reflected in the prices at the petrol stations. Tax revenues were also not used: “The federal government has not invested any money in promoting these projects,” the Ministry of the Environment stresses.
The allegedly fake projects were therefore particularly harmful to the environment and the climate.
Why did Uba not examine the projects more closely?
German authorities have no sovereign rights in China, as the Uba stated when asked. For on-site visits, state auditors are dependent on permits from Chinese authorities – but these were apparently not granted. Instead, external, independent bodies, so-called validators, examined the projects. On this basis, the Uba then approved the projects and recognized the climate contributions.
The Uba now assumes that both the oil companies and external auditors are suspected of having committed fraud. The authority is working with an international law firm based in China that specializes in economic fraud to investigate the case.
What do the testing bodies concerned say about the allegations?
The companies involved in the fraud allegations are staying at star-Request was covered. The auditing organization Verico SE said it was investigating the allegations internally. The company avoided questions about accreditation. The consulting firm Müller BBM also said it was conducting a “detailed review” and therefore did not wish to comment further at this time.
The German Accreditation Body (DAkkS) has also come under criticism. Testing bodies that test and certify projects in the field of greenhouse gases must be accredited by the body. UER projects are exempt from this, however, the DAkkS told the star There is no nationwide testing center for China projects.
How does the Ministry of the Environment react?
Environment and Development Minister Steffi Lemke is under massive pressure following the fraud scandal. The CDU and SPD demanded that the case be resolved quickly. SPD environmental politician Daniel Rinkert criticized the Uba for having “substantially neglected” the control of the projects and blamed Lemke for this. The environmental policy spokeswoman for the Union faction, Anja Weisgerber, also complained that Lemke was avoiding the questions of the Environment Committee.
The Green politician is trying to deflect attention from herself and is putting the blame on her predecessors in the grand coalition. They had introduced a system that was susceptible to fraud and which made this “serious environmental crime” possible in the first place. In a written statement to the star Lemke’s ministry criticized the control options in particular as “absolutely inadequate”. The ministry, however, did not answer why the fraud loopholes were not closed earlier under the traffic light government.
How does it go from here?
In May, the Federal Environment Agency reported the fraud cases to the Berlin public prosecutor’s office. The office is now investigating 17 people, including the management of the companies concerned and employees of the testing centers. They are suspected of having provided the German Emissions Trading Authority with false data. During a search of the companies in Kerpen, Cologne and Langebach, the police confiscated numerous documents.
The Uba has now released an employee from the German Emissions Trading Authority responsible for the UER projects for several months. In addition, all 79 foreign projects – including those outside China – are being reviewed. “If there are any errors, these projects will be reversed,” the Uba announced. This has already happened for two projects, and two applications are currently being stopped. However, there are indications that other projects could be affected.
The Ministry of the Environment has also drawn consequences: since July 1, oil companies can no longer have climate protection projects from abroad credited to their accounts. A draft of the amended regulation was already circulating in February. UER projects that are still ongoing will be recognized this year and in exceptional cases until 2025. But then it will be over at the latest. Companies can only improve their GHG quota through renewable energies in Germany.
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Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
