English translation (Deepl)
Climate protection projects worth millions run by oil companies in China apparently only exist on paper, according to research by ZDF frontal. Consumers are paying for it anyway.
It might be one of the biggest cases of fraud in the German mineral oil industry. It involves so-called UER certificates valued at over 1 billion euros. Oil companies use these certificates to satisfy German legal climate protection requirements. Consumers pay for these certificates at the petrol station or when buying heating oil, as the cost of these UER certificates is added to the price.
Research by ZDF frontal now shows that many of these UER certificates should not have been authorised at all. This concerns at least ten projects worth more than 350 million euros. These projects alone were intended to save around 1.5 million tonnes of CO2 emissions.
The Swiss scientist Axel Michaelowa has been involved with international carbon markets for 30 years, and for him the cases represent an unprecedented dimension of fraud:
The fraud cases are extremely serious. There have never been fictitious projects in the international market mechanisms.
—Axel Michaelowa, University of Zurich
Companies such as Shell, Rosneft and OMV are involved in the scandal - the oil multinationals allegedly had brand new plants built in China to reduce CO2 emissions during oil production there. Most of these projects were built on the oil and gas fields in the province of Xinjiang.
A lucrative business: for every tonne of CO2 allegedly saved in China, oil companies were initially able to collect more than 400 euros in Germany - making a single UER project of this kind worth 20 million euros or more. The problem: according to research by ZDF frontal, many of these UER projects were only faked and only exist on paper. This is also confirmed by a letter from a Chinese company that ZDF frontal has received.
The Chinese oil and gas technology group was reported as the operator of five UER projects in Germany without being aware of it. The letter states: "We have never been directly involved in the development of German UER projects." And further:
We suspect that there is a high probability that documents have been falsified and we urgently request that your authority investigate this.
—Chinese company in a letter to the German Federal Environment Agency (UBA)
According to the letter, German test centres are said to have changed the data of some of the Chinese company's plants and used them without approval in order to claim the highest possible CO2 savings in Germany. In total, these apparently fictitious projects alone involved almost one million tonnes of CO2 that were allegedly saved - with a market value of at least 180 million euros.
One of these projects was developed in partnership with Shell. The company commented on this when asked by ZDF frontal:
Shell always acts in accordance with the relevant laws and regulations and demands the same in full from its business partners.
—Statement from Shell Germany in response to an enquiry from ZDF frontal
Nevertheless, the oil company now wants to investigate the allegations following the ZDF enquiry. OMV stated that it had discontinued its UER activities in Germany in 2022. Rosneft did not respond to enquiries.
All of these projects were authorised by the Federal Environment Agency (UBA). According to information from ZDF, the federal authority received the first indications of irregularities as early as the end of August 2023. The UBA is currently reviewing seven UER projects, one of which has been cancelled, the agency explained when asked. However, the authority does not want to talk about fake projects, as this cannot be proven so far.
In view of the continuing allegations, the UBA is planning to monitor ongoing projects with the involvement of the relevant Chinese authorities.
—Statement from the Federal Environment Agency at the request of ZDF frontal
The Federal Environment Agency has been criticised in the industry. Elmar Baumann, Managing Director of the Association of the German Biofuels Industry, fears that the credibility of the certification of green products is suffering as a result of the "naive and inadequate" audit. Apparently, "not even a minimum of initiative has been shown" to properly scrutinise projects "which were clear from the outset that they would be susceptible to fraud". "That's frightening," says Baumann.
ZDF frontal was able to analyse satellite images. These show that at some of the alleged sites in China, no new plants were built in the surrounding area. In other cases, the allegedly newly built climate protection projects had already existed for a long time. They would therefore not be authorised as UER projects under German law from the outset.
For example, the project with the identifier BZIA. According to the project documents, it was built in September 2020, but a satellite image obtained by ZDF shows that the plant was already completed in March 2019.
"This means that the project should never have been validated. It is not additional, it should not have issued a single emission credit," says Axel Michaelowa from the University of Zurich.
Another project bears the abbreviation NNZF, supposedly newly built in 2021 - the date has been confirmed by a German testing institute. The only strange thing is that the information board at the entrance to the plant on site reads in Chinese: "The plant officially started operation and production in December 2015."
This means that the plant was already in operation many years before the start of construction stated in the project documents, which was checked and confirmed by an on-site testing institute.
The German government now wants to put a stop to new UER projects - the end is to come in 2025, one year earlier than planned. The Federal Cabinet intends to make a decision on this at the end of May.
The opposition is calling for consequences: "We're talking about several billion euros," says Christian Hirte (CDU), member of the Bundestag's Environment Committee.
In the end, you have to think about whether this isn't such a blatant failure on the part of the authorities and whether there won't be parliamentary repercussions.
—Christian Hirte, CDU
The UBA reports to the Federal Environment Ministry. The case will occupy the Green Minister Steffi Lemke. On Tuesday, she spoke in Berlin about how important climate protection is for the survival of plants and animals - she was talking about German moors and their rewetting. It was not about China.
The minister did not have time for an interview with ZDF frontal on the multi-million euro fraud allegation. If this is substantiated, consumers will be left to pay for the damage: They would then have paid - not for more climate protection, but for profitable projects on paper.
Fwiw, the CDU party was, of course, part of the government until fall 2021 (although they didn't hold the Environment Ministry). The saber rattling about repercussions against the new minister from Greens is just a tad disingenuous.
What exactly is the rationale behind sending essentially a carbon tax paid by German citizens to the opposite end of the world? Other than potential for oversights and fraud, obviously. Instead of funding renewables in Germany, the money is used to "reduce CO2 emissions" during fossil fuel extraction, what the fuck?
The EU Fuel Quality Directive has certain rules regarding fuel emissions and one of the options is to buy these Upstream Emission Certificates to show that the fuel was pumped out of the ground with relativly low emissions. Since EU oil production is low, this means production somewhere else has to be cleaner.
The smart move would be to ban those certificates and force them to use direct air capture or e-fuels instead.
Thanks for the context. I still don't really trust the efforts to decarbonize oil, and I'd rather see it downsized or replaced (with e-fuels for example), than building new plants that are more efficient. Except we're so reliant on oil we can't just use less of it, so the options are limited.
Nobody trusts those efforts. They exist because politicians felt they had to do something and lobbyists told them this was something and so it was done.
(Electrifying transport on land will go a long way towards reducing oil use though.)