The German Federal Environment Agency impedes fraudulent climate initiatives in China.
Several politicians and corporations use the trade of emission certificates for their climate protection endeavors. The grand coalition began a project in China in 2018, but it seems there was a significant amount of deceit involved. There's a possibility of these companies facing a loss of up to one billion dollars. The Federal Environment Agency is looking into this matter.
It has come to light that some climate protection projects of German companies in China may have been victims of large-scale fraud. Dirk Messner, head of the Federal Environment Agency (UBA), recently confirmed this during a meeting with the Bundestag's Environment Committee. There are claims that some of the certified projects didn't actually exist, while several existing facilities were declared as new.
These allegations concern Upstream Emission Reduction Projects (UER). Oil companies employ this method to achieve their climate-related goals in the transport sector. The UERs focus on reducing greenhouse gas emissions in oil extraction, and the companies receive certificates that can be used to offset their own CO2 emissions. If the accusations are true, these companies could have lost approximately 4.5 billion euros.
Environmental State Secretary Jan-Niclas Gesenhues of the Greens noted in the committee meeting that the ministry is taking the allegations seriously and has taken action. They have been conducting investigations since August 2023. At the end of May, the UBA filed a criminal complaint against unknown individuals. The ministry promised a thorough explanation of the situation.
Almost half of the projects could be fabricated
German businesses in China may have fallen victim to fraudulent activities. According to the UBA, out of a total of 60 projects, two have been canceled, and two more have been halted. However, 36 other projects are still considered questionable. Out of these 40 suspect projects, there are doubts about the authenticity of ten plants, and the information provided is possibly false in ten other cases.
There are indications of a fraudulent system being involved. Two employees of two certification companies are currently under suspicion for their involvement in the 40 questionable projects. To reach a deeper understanding of this issue, research in China is necessary. A request for assistance has been sent to the Chinese authorities, but a response could take time.
The UER system, which allows oil companies to meet legal climate goals, was implemented by the previous government in 2018. Due to its inaccuracies and lack of transparency, the current government decided to end it two years earlier than planned in the law. The system is set to expire at the end of this year.
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The Federal Environment Agency is collaborating with the Ministry of the Environment to investigate potential fraud within the CO2 emission reduction projects in China, undertaken by German companies. Despite Germany's efforts to promote environmental protection and reduce CO2 emissions through the Upstream Emission Reduction Projects (UER), China's Environmental Protection Authority should be prompted to look into the allegations of large-scale fraud, affecting nearly half of the 60 UER projects, as claimed by the Federal Environment Agency.
