Researchers have discovered that the 20 companies that have retired the most carbon offsets from the voluntary carbon market (VCM) over the last four years predominantly relied on low-quality, inexpensive credits. These companies span various industries, including major oil firms, airlines, aerospace manufacturers, automotive industries, logistics companies, and more.
Claims made by large corporations about reducing carbon emissions — or even claiming carbon neutrality — may not stand up to scrutiny.
A recent study published in Nature Communications by researchers from Kyoto University reveals that the top 20 companies retiring the most offsets in the voluntary carbon market (VCM) have primarily used low-quality, low-cost credits. Notably, this group includes leading oil corporations, airline companies, aircraft manufacturers, automotive industries, logistics providers, among others.
“There is growing concern that a significant number of projects generating carbon credits in the VCM lack quality and do not deliver the emissions reductions they claim,” stated Gregory Trencher, lead author from KyotoU’s Graduate School of Global Environmental Studies. These companies represent over 20% of all offsets retired from global offset registries.
This research utilizes an original dataset that is publicly accessible, tracking offset retirements from 2020 to 2023 and covering the three biggest offset registries in the VCM: Verra’s Verified Carbon Standard, the United Nations’ Clean Development Mechanism, and Gold Standard. The study involved collaboration with co-authors from EPFL in Switzerland and the University of Hamburg.
The analysis conducted by the team showed that none of the 20 companies could assert that a significant percentage of their retired offsets complied with established quality standards in the VCM. Furthermore, it revealed that many of these companies intentionally sought out inexpensive offsets, most of which originate from projects developed a decade or longer ago. This suggests that a majority of their investments in offsets have not catalyzed new initiatives in climate action.
“This implies that the quality issues plaguing the VCM are not solely due to supply, but also stem from demand factors, especially the purchasing choices made by individual companies,” Trencher added.
These findings raise alarms, particularly as all but one of the 20 companies have set net-zero climate goals, with many also promoting services labeled as “climate neutral.” This further intensifies perceptions that numerous firms are engaging in “greenwashing.”
“Current offsetting practices in the VCM cannot replace the need for strong government policies that require real changes to the energy technologies, supply chains, and business operations of large polluters,” Trencher emphasized.
