Chinese Company Snagged German Govt In $1 Billion Carbon Credit Scam; Agency Outsourced Auditing Of Projects
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Together with German public broadcaster ZDF, DW's investigative unit dug into this alleged fraud, sifted through hundreds of auditing reports, compared satellite images and talked to industry insiders. What we found was likely a criminal plot that has generated carbon credits worth roughly €1 billion ($1.05 billion) since its implementation in 2020 until it was shut down this year. Dozens of projects in China were approved in Germany, although they did not meet the legal requirements of a specialized carbon scheme set up for the fossil fuel industry.
While projects could be set up in nearly any country in the world, the carbon credits were issued by the German Environment Agency and could only be used to meet the climate targets of oil companies in Germany. Many of the industry's big players, we found, invested in the credits, including Shell , Exxon, Total and BP. But Verbio's Schreiber was the only investor willing to talk to us. The project Schreiber purchased credits from was supposed to save more than 120.000 tons of carbon by collecting gas from an oil extraction site in China's Xinjiang Region. The gas would have otherwise been released into the atmosphere or flared – both of which are a major contributor to global warming.
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But, DW and ZDF found that preexisting projects were, in fact, approved. Such was the case with Verbio's project. According to the documents submitted to the German authorities, construction started in September 2020. Satellite images of the site, however, clearly show that the facility had already been built in 2019, including the huge gas tanks referenced as new in the reports. "This project should never have been approved," said Axel Michaelowa, a leading expert in carbon trading at the University of Zurich. And yet, it was. By officials who never actually visited the site: The German Environment Agency, which issues the credits, does not inspect them.
"We have three employees who deal with these projects," Dirk Messner, the agency's president, told us. He said those employees don't have the capacity to review all the projects. Instead, the work is outsourced to private auditing companies. The approval is based on the paperwork provided by these companies. It's a relatively common procedure in carbon certification. But this time, it provided the opportunity for a billion-euro fraud. In total, the German Environment Agency approved 66 projects in China. Project documents obtained by DW allowed us to identify at least 16 projects that were, in all likelihood, fraudulent. Almost all of them followed a similar pattern: An existing installation was submitted as if it were new. At first glance, they all seem to have been submitted by different companies. But, we found that almost all seem to have close links to one company: Beijing Karbon. That company is a consultancy specializing in carbon reduction and certification. According to its website, it provides services to businesses that want to reduce their carbon footprint and helps Chinese firms invest abroad.
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https://www.dw.com/en/how-a-chinese-firm-ran-a-billion-euro-carbon-credit-scam/a-71010148