German authorities announced on Friday that they had blocked the issuance of climate certificates to several companies involved in a possible scheme for embezzlement in projects to reduce polluting emissions in China.
The investigation into the alleged irregularities was launched after press revelations about a vast carbon credit fraud scheme involving German oil companies involved in climate projects, some of which never actually existed. In other cases, the announced CO2 reductions did not correspond to the actual savings.
“Environmental crime”
The German Environment Minister had mentioned this summer “a probable serious case of environmental crime”. Of the “serious legal and technical inconsistencies” have been proven in seven initial cases examined by the Federal Environment Agency (UBA), which said on Friday that it had blocked the issuance of certificates. An eighth project will not receive a certificate because it has been “started prematurely”breaking the rules, according to a statement.
The eight certificates that were refused correspond to a saving of 215,000 tonnes of CO2 equivalent that the groups initially wanted to include in their climate balance sheet. No details on the companies concerned were provided. The alleged wrongdoing concerns a mechanism that allows oil groups in Germany to achieve climate targets prescribed by law through environmental projects in China. By financing projects to reduce pollutant emissions, they can, after approval by the German authorities, have them credited to their climate balance sheet.
Forty projects still under review
Out of a total of 69 projects in China, forty will still be scrutinized by the Environment Agency, including 21 that are particularly suspicious, according to the UBA, which has called on an international law firm to conduct the investigation. These are emission reduction projects that in return earn emission credits called Emission Reduction Units (ERUs), a mechanism provided for in the Kyoto Protocol.
Since July 1, German authorities have suspended all emissions reduction projects in China. The alleged malpractices also involve companies specializing in environmental expertise. At the request of the Berlin prosecutor’s office, which is also investigating the fraud, police raided the offices of several auditing agencies responsible for verifying the projects in July.
The financial damage, calculated on an estimate of the fines saved by companies that have embellished their climate balance sheet, could reach 4.5 billion euros, estimated the German biogas federation quoted this summer in the German press.
