If you find yourself filling up at a Shell station across Canada, you’ll likely be greeted by an ad, one that ensures you can drive “carbon neutral” if you participate in a program from the company.
Or perhaps, you’ll stumble on a video, which shows a family circling around a city in a grey SUV, eventually ending up at a Shell station during the peak of golden hour. “See the difference driving carbon neutral can make” pops up on the screen.
The advertisements are for Shell Canada’s Drive Carbon Neutral program, which launched in November 2020. A company press release said from Dec. 31, 2020 onwards, customers at its pumps can contribute two cents per litre to various carbon offset projects.
That program and its claims of carbon neutrality will be challenged Wednesday when environmental group Greenpeace is set to file a complaint to the Competition Bureau of Canada. The group argues the Drive Carbon Neutral program is greenwashing and is therefore tricking customers into participating in an initiative with false claims, which it says goes against the Competition Act: a federal law governing the majority of business conduct in the country.
“They basically are claiming that these offsets can compensate for the greenhouse gas emissions generated by their own fossil fuel products … The central component of our complaint and the central argument of Shell's program is the claim that offset projects can make fossil fuel products carbon neutral,” said Greepeace nature and food campaigner Salomé Sané.
“... So what we're pointing out here is the lack of transparency; there's not enough evidence.”
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Carbon offsets are becoming increasingly popular among polluting corporations trying to rebrand themselves as green. In October, a report analyzed net-zero pledges by a slew of companies ahead of the UN climate summit (COP26), concluding that many of the promises are greenwashing disguised as climate action.
Shell Canada is doing the same thing by claiming its forest-based offset projects, the focus of the Drive Carbon Neutral program, are good for the environment, said Sané.
The problem with forest-based offset projects
The company lists three projects it is using for the program: the Katingan Mentaya initiative in Indonesia; the Cordillera Azul project in Peru; and the Darkwoods Forest Carbon project in British Columbia.
The Canada-based project, explained Sané, is a 54,792-hectare area the Nature Conservancy of Canada has had in its hands since 2008. Since it's already a protected area, purchasing offsets that contribute to the project doesn’t seem to be protecting any new area, said Sané, who explained it goes against one of the four elements Greenpeace uses to evaluate if offset projects are reducing emissions — additionality.
The category of additionality looks at whether offsets actually contribute anything new to an existing project. For example, if a forest isn’t at risk of being logged, purchasing offsets that are supposed to protect the forest won’t actually amount to more carbon being stored. The other three elements are as follows:
Permanence — The idea that emissions need to be kept out of the atmosphere forever, rather than be held in projects that may eventually allow carbon to escape. Forests used as carbon offsets have burned down in the past, which releases their stored carbon back into the air.
Double Counting — When a company purchases offsets and incorporates them into its climate plan and another entity (often government) does the same.
Leakage — When forest offsets inadvertently cause carbon emissions by moving an activity somewhere else. For example, increased logging taking place next to a protected forest or in another country with weaker rules.
There’s also concern that nature-based solutions, such as forest preservation, can harm Indigenous communities. Deborah McGregor, an Anishinaabe associate professor in Indigenous environmental justice at Osgoode Hall Law School, told Canada’s National Observer in October that nature-based solutions are often branded as moves that draw and support Indigenous ways of knowledge, but can lead to nations having less control and ownership over land. For instance, an area of land could be designated protected without Indigenous collaboration or consultation.
The three projects Shell uses for its program have issues around transparency, quality, and additionality, according to Greenpeace, which is arguing there is insufficient evidence to show the program reduces emissions at all.
When asked about allegations of greenwashing, Shell said carbon offsetting is a way for customers to take action – that the Drive Carbon Neutral program is an “important initiative.”
“...more than two-thirds of the total CO2 emissions associated with Shell come from the end-use of our products, so we must help our customers cut their emissions when they use that energy,” said Stephen Doolan, Head of Media Relations for Shell Canada.
“Shell continues to develop its portfolio of solutions, including renewables, e-mobility charging, biofuels and hydrogen to help customers reduce their carbon footprints if they choose to drive a vehicle that can use these lower-carbon fuels.”
Regardless of the quality of the projects, Sané said the fossil fuel industry's — the largest and quickest-growing source of emissions in Canada — use of carbon offsets to claim carbon neutrality is skirting around the inevitable transition off fossil fuels.
The Competition Act
Violations of the Competition Act can be both civil and criminal, explained Ali Naraghi, legal counsel for Greenpeace, who is arguing Shell is making misleading claims through its program advertising, which violates certain sections of the act.
After filing the complaint to the Competition Bureau, which any individual or group can do online, the ball is in their court to decide if the company violated the Competition Act. Although Greenpeace’s complaints fall into both the civil and criminal sections, Naraghi said it’s more likely for its complaint to have civil implications, which can include a fine of up to $10 million.
For Naraghi, the complaint is especially timely. Although he’s not sure when the Competition Bureau will come out with a decision (he’s hoping within the next year), filing the complaint aligns with the last week of COP26 — where carbon offsets have been a big topic of conversation.
“It's on people's minds. It's on the government's minds to act on this … we want to incentivize the Competition Bureau to be proactive … we're trying to remind the Competition Bureau of the power that they have,” he said.
It’s not fair to expect consumers to spot greenwashing, so Naraghi hopes the complaint will set a precedent for fossil fuel companies not being able to advertise offsets as net-zero solutions. He said the complaint feels especially important because customers are giving money to support the program.
However, Greenpeace is going in with the support of a precedent elsewhere. The same program in the Netherlands was ruled as misleading by the country’s advertising watchdog this summer, and Royal Dutch Shell was ordered to take its advertisements down.
As well as hoping for a similar verdict, Naraghi and Sané are looking further into the future — one without fossil fuel advertisements at all.
“The first goal is to prevent big oil companies like Shell from exploiting the consumers' willingness to make environmentally conscious decisions, and trick them into schemes that have not been proven effective,” said Sané.
“... But ultimately, what we want to do, depending on what the Competition Bureau will come back to us with ... we want to just campaign around the idea that we should ban fossil fuel advertising by oil and gas industries because their practices are knowingly deceptive, harmful, immoral, as well as irresponsible.”
This story was updated to include a quote from Shell Canada