Nature-based solutions

In addition to protecting, transforming and restoring natural ecosystems, nature-based solutions activities can also lead to the creation of carbon credits, where each credit represents the avoidance or removal of greenhouse gases equivalent to one tonne of CO₂.

These carbon credits can then be marketed, traded and bought. For example, they can be bought to help offset less avoidable carbon dioxide emissions that are produced elsewhere, such as the emissions released when driving a car.

In the UK, Shell uses carbon credits for our ‘Drive Carbon Neutral’ offer where members of the Shell Go+ rewards programme can opt-in to have the carbon emissions of their fuel purchases offset for them by Shell. In order to do this, Shell uses carbon credits sourced from nature-based projects around the world. One conservation project is the Cordillera Azul National Park project, between the Andes and the Amazon basin in Peru, and another is Katingan Mentaya project in Indonesia.

There is a robust programme of third-party independent standards, verification processes and registries to help ensure the quality and integrity of projects that produce carbon credits. The Verified Carbon Standard, the Gold Standard and the Climate Action Reserve are examples of well-known standards in the market. In order to be validated to these standards, projects are checked by independent Designated Operational Entities (DOEs) – which are qualified to ensure the projects meet crucial quality criteria and deliver genuine reductions. In addition, the DOEs check the projects on a regular basis to ensure they are continuing to deliver what is claimed. Shell will only partner with projects that are verified by DOEs.

Key criteria in evaluating the credibility and quality of an offset project is proof that it is:

1. Additional – that the reduction in emissions would not have occurred without the carbon finance from selling carbon offsets
2. Verifiable – that any carbon credits produced will be retired from the carbon market so that they cannot be sold again or double-counted
3. Permanent – that the project delivers the reductions claimed and they will not be reversed
4. Addressing leakage – that the emissions reduction achieved from one area has not caused an increase in emissions elsewhere

For UK offers like our Drive Carbon Neutral programme, Shell buys carbon credits from a range projects that not only protect, enhance or restore natural ecosystems, but that also benefit local communities by funding activities such as new schools or fresh water supplies.

Examples include the Katingan Mentaya project in Indonesia that protects peatland habitats, preventing forest clearance which would have led to the draining of underlying peat. The threatened land is home to several critically endangered species, including up to 10% of the surviving Bornean orangutans, southern Bornean gibbons and proboscis monkeys. The project protects 149,800 hectares of peat swamp forest and vital habitats for five critically endangered species.

Another example is the Cordillera Azul project in Peru that supports a rich ecosystem of indigenous high carbon stock forests. By the end of 2021, the project aims to have protected 1.6 million hectares of threatened forest and 28 high conservation value species, supported 716 jobs and created or supported 24 sustainable enterprises.

In addition to buying carbon credits from global nature-based solutions projects, Shell also supports projects that don’t yet generate carbon credits. In the UK, in 2019, Shell started working with the Forestry and Land Scotland team to establish around a million trees across the forest estate over the course of five years. Forestry and Land Scotland manage and protect 640,000 hectares of Scotland’s national forest estate on behalf of the Scottish government. The estate makes up approximately 9% of Scotland’s total land area which is equivalent to 25 times the size of Edinburgh.

We’re also working with similar projects in the Netherlands, Spain, Canada and Australia and you can find out more about these projects here.