Chinese Firm Ran a Billion Dollar Carbon Scam
Last week, the German news outlet DW reported the results of its months-long investigation of a billion-dollar Chinese carbon credit scam.
The Scam:
As part of the green transition, German oil companies are required to purchase carbon credits to offset their emissions.
To meet this requirement, many companies bought credits from a Chinese company called "Beijing Karbon," which claimed to do things like install energy-efficient oil and gas extraction equipment to reduce the CO2 emitted by Chinese oilfields.
But when DW investigators went to a Shengli oil field to see the equipment in action, all they found was an abandoned chicken coop. Then, business addresses listed on compliance forms turned out to be residential apartments. Its officers had ties to the CCP. And satellite images of the alleged green projects didn't add up. Chinese partners stopped talking, as Beijing Karbon spread the word that "Anti-China-Media are using shady methods to smear all China projects."
The result is what DW calls the "biggest climate fraud in Germany's history," a likely "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."
The Government's Response: Per Semafor, following a whistleblower complaint earlier this year, German "officials suspended all emissions-reduction projects in China, and are accepting no new projects anywhere." In addition, the government has suspended one senior official, a criminal complaint has been filed, and "police have searched the offices of audit firms responsible for verifying projects."
China's Role in the Green Transition: While China is certainly not the only country caught up in carbon credit scams, the Beijing Karbon scheme highlights how China supports climate change efforts, so long as they inure to China's best financial interests. China is happy to sell solar panels and wind turbines to U.S. customers; but fires up new coal plants to ensure cheap and plentiful energy at home. China is happy to provide green financing to developing nations; but only if it receives access to strategic ports in return. This time, China is happy to sell carbon offsets to Germany, but only if it doesn't have to actually offset any carbon. "Setting up a real project costs tens of millions," one insider told DW, "whereas faking a project just purely on paper, like out of thin air, you only need to forge a basket of new documents, and you gain hundreds of millions of euros in return." The carbon credits may be fake, but the money is real.
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