A new report by Greenpeace Canada reveals that Shell sold millions of carbon credits for reductions in greenhouse gas emissions that were never actually achieved. This allowed the company to profit from its carbon capture and storage project, despite not meeting the intended targets.
Between 2015 and 2021, Shell received emissions reduction credits under an agreement with the Alberta government, where it was awarded two tonnes’ worth of credits for every tonne of carbon captured and stored at its Quest plant near Edmonton. These credits were then sold on the Alberta carbon market, generating over $200 million in revenue for Shell.
While such sales were not illegal, Greenpeace describes them as a “hidden subsidy” within the program, undermining the effectiveness of industrial carbon pricing. Taxpayer funding covered a significant portion of the project’s costs, with Shell receiving $777 million from federal and provincial governments, and $406 million from carbon offsets.
The Quest project, touted as a solution to pollution in the oilsands, stored nine million tonnes of CO2 since 2015. However, this falls short compared to the total emissions from the oil and gas sector, which exceeded 158 million tonnes in 2022.
Responding to the report, Shell Canada emphasized the importance of carbon capture technology in achieving climate targets, highlighting the capture of nine million tonnes of CO2 at the Quest facility. The company did not deny the sale of extra credits.
Critics argue that carbon capture projects heavily rely on subsidies and are not economically viable without them. Pierre-Olivier Pineau, an energy policy expert, emphasizes the need for higher carbon pricing to incentivize such projects effectively.
The report comes amidst concerns about loopholes in carbon pricing systems and the need for stricter regulations to ensure genuine emissions reductions. The federal government is expected to announce details of its emissions cap on the oil and gas sector, aiming to strengthen long-term competitiveness while reducing carbon pollution.
