German supermarket Aldi buys carbon offsets from monoculture eucalyptus plantations in Uruguay in order to claim that its milk is “carbon neutral”

By Chris Lang

Last month, German television channel ZDF broadcast a programme about Aldi, one of Europe’s largest food supermarkets, and its claims of carbon neutral products. “Carbon neutral” milk, for example.

The programme is available here with English subtitles:

Aldi’s milk comes from the Molkerei Gropper GmbH & Co. KG. The milk is produced in an industrial dairy operation in Bissingen, Bavaria. ZDF reports that since 2020, Aldi’s milk production has emitted 55,000 tons of carbon – from the cow to the supermarket shelf. Aldi claims that the milk is “carbon neutral” because it buys carbon offsets.

Manuel Wiemann of Foodwatch tells ZDF that this is deeply problematic:

Manufacturers suggest with the term “climate neutral” that the product would not harm the climate. That is false and therefore misleading.

Unfortunately, the ZDF programme doesn’t go into any detail about the problems with drinking cows’ milk: the environmental issues, the impact on the climate, and the animal rights issues. Neither does it put forward any of the arguments in favour of a vegan diet.

But at least ZDF shows a clip of the cages in which the cows live:

The ZDF programme looks at three of Aldi’s offsetting projects: tree planting in Germany; an industrial tree plantation in Uruguay; and an efficient cook stoves project in Ghana.

Industrial tree plantations in Uruguay

This post focusses on the industrial tree plantation project in Uruguay. The project title on the Verra protect database is “‘Guanaré’ forest plantations on degraded grasslands under extensive grazing”.

The project consists of more than 21,000 hectares of eucalyptus monocultures. The project was set up by Guanaré AS, a Uruguayan forestry investment firm founded by Peter Lyford Pyke. The industrial forestry operations on the ground are carried out by Agroempresa Forestal, a Uruguayan company. The timber is harvested and shipped to India and China.

ZDF interviews Dan Guapura, Country Manager of Agroempresa Forestal Uruguay, who says that,

“The high-quality wood is used as plywood or veneer in contrast to wood with knotholes, which can be used as carcassing timber or as construction timber.”

Simon Counsell, former director of Rainforest Foundation UK, tells ZDF that,

“The problem with these kinds of products is that they have a very short life cycle, they probably end up being burnt or thrown into landfills, which is the worst option, because they then degrade into methane which is an even more potent gas than carbon dioxide. Greenhouse gas emissions can in fact get worse rather than better.”

Meanwhile Aldi states that “The aim of the reforestation project in Uruguay is the sustainable production of wood . . . only high-quality logs are produced and no pulp.”

But workers in the plantations told ZDF something different. They pointed out some tree trunks that will end up in a pulp mill. Agroempresa Forestal’s Dan Guapura also contradicts Aldi:

“In reality, when you talk about this forest [sic], one of the goals is cellulose production. Another part of the trees is used as biomas for renewable energy. But the crown of the tree usually ends up in the pulp mill.”

Additionality, or carbon finance as another subsidy for the plantation industry?

ZDF raises the issue of additionality. Would the plantation project have gone ahead without carbon finance? As Simon Counsell points out, timber production is a profitable industry. “That would strongly suggest,” he says, “that the project is not actually additional and does not require carbon funding. The carbon credits may bring additional profit but that does not satisfy the criteria of additionality.”

Aldi refers ZDF to ClimatePartner, whose other clients include supermarkets Rewe, Lidl, and Edeka. ClimatePartner declined to be interviewed but stated that “Additionality is an essential characteristic of climate protection projects, and in the Guanaré reforestation [sic] project in Uruguay, this is fully and demonstrably the case.”

ZDF asks Guapura what percentage of the turnover comes from sales of carbon credits. He laughs and says,

“You can ask questions! I can’t say at the moment.

“Because the sale of carbon credits is not an ongoing business like the sale of timber. The carbon credits, or the CO₂ are an additional business for our investors and an additional motivation to invest.”
 

ZDF concludes that “additional” means not saving the climate, but making a profit.

Predictably enough, Verra backs industrial tree plantations

In a response, Verra states that the project documents explain the rationale behind the project and list the relevant methodologies. Verra is keen to defend a corporation selling carbon offsets, rather than look at the implication for the climate of selling “hot air” offsets.

Verra even describes Guanaré’s industrial tree plantations as “sustainable forest management”. In doing so, Verra is backing the forest industry’s argument that plantations are forests. The argument is ludicrous. Plantations exist so that the timber industry or the pulp and paper industry can extract profit from the land. Forests, obviously, are something else altogether: ecosystems, habitats for countless animals, and homes to millions of Indigenous Peoples and local communities. (Although once the timber industry gets its hands on the forest it also sees forests as a means to extract profit.)

Verra argues that carbon finance supported a “staggering” 94% of the timber plantations established in Uruguay between 2006 and 2011, and that ZDF dismisses the risks involved in setting up industrial tree plantations. But Verra is dismissing the role that subsidies play in creating plantations. Carbon finance is just one more subsidy that the industry is more than happy to pocket.

In Uruguay, industrial tree plantations were promoted by a series of “aid” projects over decades. Here’s a sample:

• 1951: a UN Food and Agriculture mission together with the World Bank.
• Mid-1980s: The Japanese International Cooperation Agency funded a feasibility study of building a pulp mill in Uruguay.
• 1988: Uruguay’s National Forestry Plan is based on a JICA study of establishing tree plantations in Uruguay.

This was followed by a World Bank forestry loan that the Uruguayan government used to set up a series of subsidies to the plantation industry, including tax exemptions, partial refund of plantation costs, long-term soft loans, reduced duty on machinery and vehicle imports, construction of roads and bridges and equal benefits for foreign investors.

The World Rainforest Movement calculates that between 1988 and 2000 the Uruguayan government handed over more than US$414 million in direct and indirect subsidies to the plantation industry.

Carbon finance is just another subsidy. And of course the plantation industry has taken the subsidy and argued that they couldn’t possibly survive without it. And of course Verra believes the industry’s stories.

As Foodwatch’s Manuel Wiemann tells ZDF,

“If we want to protect the climate, it is important to reduce emissions significantly here in Germany. If we rely instead on bogus solutions, such as questionable projects in the Global South, where there is no guarantee they will actually protect the climate, then this will not help us at all. And we don’t have time to lie to ourselves.”