Shell leads the $1.4-billion carbon credits market

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🗞️ Driving the news: Shell led the global voluntary carbon market in 2024, retiring 14.9 million carbon credits, twice as many as Italy’s Eni
• The oil major, alongside other energy, tech, and fashion companies, is relying on carbon credits to offset emissions while scaling back renewable energy investments
• The global carbon credit market remained at $1.4 billion, with demand stagnant and prices falling 20%

🔭 The context: Companies use carbon credits to compensate for emissions by funding projects that remove or reduce CO₂, rather than directly cutting emissions
• While Shell outpaced rivals in credit purchases, critics argue that offsets are often used to delay meaningful decarbonization
• The number of registered carbon projects reached 6,200 by the end of 2024, spanning the world’s largest crediting registries

🌍 Why it matters for the planet: Carbon credits can play a role in emissions reduction, but they face scrutiny over effectiveness and integrity
• Critics warn that reliance on offsets may divert attention from real emission cuts, especially as firms like Shell and BP reduce renewable energy investments
• Strengthening regulations and transparency in carbon markets will be key to ensuring their climate impact

⏭️ What's next: Despite a flat market in 2024, analysts see signs of revival, with more companies setting net-zero targets and policy changes improving credit reliability
• If credibility concerns are addressed, carbon markets could expand, influencing corporate climate strategies
• The balance between offsets and direct decarbonization will remain a critical debate

💬 One quote: “The number of companies setting ambitious climate commitments continues to rise, signaling potential growth in the carbon market.” – MSCI Carbon Markets analysts

📈 One stat: 180 million tons of CO₂e were retired as carbon credits in 2024, permanently removing them from the market

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