As oil and gas companies attempt to reduce their carbon emissions, some are using nature-based offsets to remove carbon dioxide that already exists in the atmosphere.

Several producers — including BP, Shell and TotalEnergies — have invested in portfolios of nature-based solutions intended to offset carbon emissions from their oil and gas production.

These include forestation, conservation and other projects aimed at absorbing carbon from the atmosphere.


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Shell used offsets in a recent transaction with US liquefaction giant Cheniere Energy. Cheniere sold liquefied natural gas to Shell, while Shell offset the related carbon emissions with its nature-based projects to create carbon-neutral LNG.

Some scientists and environmental activists, however, are sceptical of the efficacy of such offsets.

The Nature-based Solutions Initiative, an Oxford University programme, stressed in an April report that such offsets need to be used responsibly to be effective.

The initiative said carbon offset projects must be ethically planned to effectively help the environment and not negatively affect local communities.

Calculating the results can be complicated, given that the amount of offsets nature-based solutions provide varies widely among type of offset, location and plant species used.

Tina Swanson, director of the Science Center at the US-based Natural Resources Defense Council, says nature-based offsets should only be used for unavoidable emissions that are difficult to reduce, such as aviation, and should not excuse excess emissions that could find cleaner solutions.

Using these offsets to make LNG exports look good is "like putting lipstick on a pig", Swanson says. “It is a completely inappropriate and ineffective strategy for offsetting greenhouse gas emissions from the production or use of fossil fuels, for which we already have feasible and economical zero-carbon alternatives.”

Shell’s nature-based solutions portfolio seeks to address some of these concerns. The company assesses its projects against the Climate, Community and Biodiversity Standards, which measure such projects on environmental and social impacts.

These standards were developed by the Climate, Community and Biodiversity Alliance, a partnership of environmental, non-governmental organisations.

The company did not respond to inquiries about its use of nature-based offsets in the Cheniere transaction.

Shell has made other recent developments to decarbonise. It has teamed up with the National University of Singapore to develop processes to use carbon dioxide in the energy industry, and shareholders voted to support an energy-transition strategy that would ultimately decrease Shell's output of oil and gas.