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China Oil, Gas Giants Accused of ‘Greenwashing’ LNG Purchases

Greenpeace says firms like PetroChina and CNOOC Gas and Power are buying misleadingly labelled “carbon neutral” liquefied natural gas

Chinese energy officials say total gas demand is likely to fall 1% this year, which would be the first annual decline since at least 2002.
LNG storage tanks are seen at PetroChina's terminal in Dalian, Liaoning province, July 16, 2018. File photo: Aizhu Chen, Reuters.


Greenpeace has accused China’s big oil and gas companies of using low-quality carbon offsets to “greenwash” their imports of natural gas.

Firms like PetroChina and CNOOC Gas and Power have signed long-term contracts with Shell to buy “carbon neutral” liquefied natural gas (LNG), which uses “forest offsets” to balance out carbon emissions, the environmental pressure group said on Monday.

But Greenpeace, which has long opposed fossil fuel producers counting carbon offsets toward their emissions reduction goals, said the “carbon neutral” branding was misleading the public.

“For oil and gas companies in particular, carbon offsets are a smokescreen to obscure their continued, redoubled carbon emissions,” said Li Jiatong, project leader with Greenpeace in Beijing.

PetroChina didn’t respond to a request for comment. CNOOC Oil and Gas’s parent company said it was not itself involved in LNG purchases. Shell declined to comment on Greenpeace’s report.


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Many of the offsets were not being measured consistently and sometimes were being double counted, Greenpeace said. And some forests tied to offset schemes were vulnerable to fires that could turn them into a carbon source, rather than a carbon sink.

Greenpeace said credits from 15 forestry carbon sink projects in China, involving Shell, PetroChina, CNOOC and other companies, have already been banked, but 80% of the projects planted trees that are at medium- to high-risk of burning down.

Rising sales of “carbon neutral” LNG are being driven by a surge in gas demand, particularly in Asia. Around 85% of carbon neutral cargoes have been sold to Asian buyers, Greenpeace said.

China’s gas consumption is expected to reach 250 billion cubic metres (bcm) by 2026, up from 216 bcm last year, accounting for almost half of new global demand over the period, the International Energy Agency said.

The idea of “carbon neutral” gas is likely to be on the agenda during COP28 talks starting this week, said Polly Hemming, director of the Climate and Energy Program at the Australia Institute.

While it is still a major source of greenhouse gas emissions, gas is cleaner than coal and has been described as a “bridge fuel” in the global energy transition, but anti-fossil fuel groups oppose any new gas projects.

“Stapling those offsets to fossil fuels and claiming that they are net zero – it’s bonkers,” said Hemming.


  • Reuters with additional editing by Sean O’Meara


Read more:

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Fossil Fuel Nations Planning ‘Insane’ Output Hikes – Guardian

The Transition to Clean Energy is Unstoppable, IEA Says

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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