Shell loses appeal against Dutch advertising watchdog. The claim that offsets “compensate” emissions is misleading

By Chris Lang

Shell lost its appeal against the Dutch advertising watchdog’s ruling that its carbon “compensation” adverts were misleading and must be withdrawn.

In June 2022, the Netherland’s Advertising Code Commission ruled (for the fourth time in 2022!) that Shell’s adverts were misleading. The adverts explain that customers can pay extra when they buy petrol and claim that this will “compensate” for the greenhouse gases emitted when the petrol is burned.

This most recent advertising campaign is a re-design of a “CO₂ neutral” campaign that the Advertising Code Commission also ruled was misleading.

In August 2021, the Dutch advertising watchdog ruled that Shell’s “CO₂ neutral” adverts were misleading. The Advertising Code Commission ruled that Shell could not prove that it is fully offsetting the greenhouse gas emissions from driving.

In a June 2022 statement, the Advertising Code Committee said that,

Just like CO₂ neutral, CO₂ compensation is an absolute environmental claim, and absolute environmental claims are subject to a strict burden of proof. Shell has no way of demonstrating that CO₂ compensation by protecting forests or planting trees eliminates the climate damage of petrol.

Shell appealed the decision. And lost. Following the most recent ruling, the Advertising Code Committee said that,

There is no or insufficient evidence that the forest projects in which Shell invests are actually capable of realizing the carbon credits’ converted absorption of CO2 in a way that fully offsets the CO₂ emissions of Shell’s fossil fuel.

Shell’s REDD offsetting projects include, among others, Cordillera Azul National Park REDD+ Project in Peru, Southern Cardamon REDD+ Project in Cambodia, and Katingan Peatland Restoration and Conservation Project in Indonesia.

In addition to the fact that Shell is buying carbon offsets from these projects in order to greenwash its ongoing pollution, all of these projects are problematic. The first two projects fail to respect the rights of the Indigenous People and local communities whose forests the projects are using to sell to oil corporations. Both projects are a type of fortress conservation.

The third project, like all offsetting projects, relies on a counterfactual baseline – a story of what would have happened in the absence of the project. Like all counterfactual baselines this story cannot be verified, because the project did go ahead.

In June 2022, Kichwa Indigenous communities put out a statement opposing the sale of carbon offsets from the Cordillera Azul National Park to oil companies. The Kichwa communities were not consulted when the National Park was created, and they were not consulted when the Park started selling carbon offsets.

The NGO running the Southern Cardamom REDD+ Project, Wildlife Alliance, has been involved in violently evicting people living in the forest. “We always were very agressive,” an ex-adviser to Wildlife Alliance told the Phnom Penh Post. He said that Wildlife Alliance sent complete families on the road, burned their house with all their belongings. “The few things they have, for us is nothing, but for them it’s everything,” he said.

Since 2017, the Katingan REDD project has sold 30 million carbon offsets, according to a report by Nikkei Asia, with an estimated value of US$210 million. Nikkei estimates that the project’s counterfactual baseline resulted in the project issuing credits “up to three times more than the amount of carbon dioxide it is likely to absorb”. Predictably enough, Verra jumped to the defence of the project developer, and describes Nikkei Asia‘s reporting on REDD as “journalistically lazy, morally reprehensible, and materially irresponsible to your stakeholders”. Which is hilarious coming from Verra, an organisation that makes its money from peddling carbon offsets.

It’s almost as if Verra is unaware that the companies buying a very large proportion of these carbon offsets are oil companies and other Big Polluters. Or that they are doing so in order to continue polluting.

Of course, if Verra were to admit this, they would also be forced to admit that they are part of the problem, and a key part of the distraction from the need to leave fossil fuels in the ground.