German environment minister promises better fraud prevention in wake of fake climate projects in China

Germany's environment minister has promised better precautions to prevent fraud in emissions reduction schemes abroad after a special session in parliament to discuss recently surfaced fake climate projects in China, reports news agency dpa in an article published by the WirtschaftsWoche. During the special session, minister Steffi Lemke told the parliament's environment committee that the alleged cases of fraud in so-called Upstream Emission Reduction (UER) projects had undermined confidence in such regulations and the achievement of climate targets. As such, new UER projects can no longer be registered and the UER crediting system was terminated with effect on July 1. UER projects are measures to help reduce carbon emissions from fuels in the upstream sector, meaning before the crude oil is processed in the refinery.

The fake UER projects may have been used to help German oil companies balance their carbon emissions, though the Federal Environment Agency (UBA) says it is unlikely that the companies themselves knew the projects were fake, reports dpa. In addition to its own investigations and those of the Berlin public prosecutor's office, the UBA has called in an international law firm to help work through the alleged cases of fraud. Green Party minister Lemke blamed the previous government for creating a system “that was structurally non-transparent and susceptible to fraud.”

Public broadcaster ZDF estimated at the start of June that the value of the allegedly fraudulent UER projects was more than 600 million euros. The German government gave oil companies a chance to use UER projects to meet climate protection targets in the transport sector, with the cost of UER certificates borne by consumers when they fill up their petrol tank, for example.