Investigating fraudulent climate projects in China “highest priority” – German govt agency

The Federal Environment Agency (UBA) has said that it is fully focused on investigating fraudulent emissions reduction projects in China, which oil companies have used to fulfil climate protection requirements in Germany, reports energy policy newsletter Tagesspiegel Background. "Full clarification is our top priority," UBA head Dirk Messner told the news service. The agency is currently examining 40 of the 60 projects it permitted in China, he said, adding that it had reached out to authorities in the country, aiming for a joint mission on the ground – which China would have to greenlight.

With the idea of so-called upstream emission reduction projects (UER), Germany in 2020 gave oil companies an additional opportunity to fulfil climate protection targets in the transport sector, reported public broadcaster ZDF. It found that many projects only existed on paper and a large part should not have been permitted. Most projects aim to reduce CO2 emissions during oil production. Companies receive a certificate for each kilogramme of CO2 saved this way, which can be used to fulfil the greenhouse gas reduction quota in Germany. In total, the projects in China are worth at least 1.7 billion euros, said ZDF. The cost of UER certificates is borne by consumers when they fill up their petrol tank or buy heating oil, because oil companies add the cost of the certificates from these projects to the price of petrol.

The German government has decided to end the option to use UER projects as part of the emissions quota by the end of this year, reported Tagesspiegel Background. Opposition lawmakers have heavily criticised the government for not reacting immediately when information about the fraud first surfaced.