Under the EU’s Fuel Quality Directive, fuel suppliers have to reduce the carbon footprint of their products by 6% in 2020 compared with 2010. They can count savings occurring upstream in the fuel lifecycle towards this target. The newly-published guidelines on so-called ‘Upstream Emission Reductions’ (UERs) clarify how the oil industry can use various offsetting schemes.
The guidelines call for the exclusion of emissions reductions which would have occurred anyway, in line with the principle of additionality. The document is much weaker, however, on ensuring that the same emission reductions are not used twice (‘double counting’).
Femke De Jong, EU policy director at Carbon Market Watch, said: “It is now up to member states to ensure that fuel suppliers finance additional action in poor countries as opposed to using recycled emission cuts, including from Shell’s tar sands operations in Canada. Member states moreover need to guarantee transparency so the public can hold fuel suppliers accountable for the offset credits they buy.”
The guidelines specify that offset credits from Clean Development Mechanism (CDM) and Joint Implementation (JI) projects starting after 2012 can only be used if they take place in ‘Least Developed Countries’. This excludes controversial JI projects from countries with very little international oversight and weak safeguards on additionality, such as Russia.
Carbon Market Watch and T&E are advocating to limit eligible savings to Clean Development Mechanism projects in Least Developed Countries. This would be consistent with the EU’s rules under its emissions trading system (EU ETS).
Laura Buffet, oil and biofuels officer at T&E, said: “Europe’s national governments must now build on these guidelines by closing loopholes on double counting and only allowing credible projects from the so-called Least Developed Countries.”
Notes to editor:
The EU has a decarbonisation target of 6% under the Fuel Quality Directive. Final implementing measures to reach this goal were adopted at EU level in April 2015.
The rules include the option for fuel suppliers to use upstream emissions reductions, such as reductions in flaring and venting, to reach part of their target. Flaring of natural gas releases over 400 million metric tonnes of carbon dioxide equivalent (CO2e) emissions globally every year. Member states had asked for the Commission’s guidance on how to implement this option.
For further information, see joint a briefing and recommendations to the Commission by Carbon Market Watch and T&E on upstream emissions reductions.
