Germany suspects ‘serious environmental crime’ in Chinese CO2 reduction projects - env minister

German environment minister Steffi Lemke is demanding clarification from the Federal Environment Agency (UBA) following allegations of fraudulent emission reduction projects in China used by fossil fuel giants like Shell and TotalEnergies to fulfil climate protection requirements in Germany, public broadcaster ZDF reported. "It is possible that we are dealing with a case of serious environmental crime here," said Lemke. The UBA is currently examining 40 out of a total of 69 projects that it approved in China and that had been validated and verified by German inspection bodies, but possibly based on false information. ZDF claims that more than a quarter of the so-called upstream emission reduction projects (UER) are fake, and has estimated the value of the allegedly fraudulent schemes at more than 600 million euros.

The UBA has commissioned an international law firm that also operates in China to carry out an on-site inspection. It has also filed a criminal complaint with the Berlin public prosecutor's office, which has launched an initial investigation. Oil companies can use UER certificates to fulfil greenhouse gas reduction quotas in Germany by reducing CO2 emissions during oil production. While the government has shut down the UER system due to inadequate controls, trading of UER certificates continues and cannot be stopped, according to the environment t ministry. Companies involved in trading have to take into account that acquired UER certificates could turn out to be fake, however. The UBA has in the wake of the fraud allegations also suspended a senior employee who was responsible for the approval of the UER projects.