Global Charities Say Using Companies’ Carbon Offsets to Lower Emissions Undermines Climate Targets

More than 80 global charities and climate industry bodies are voicing their opposition to the use of carbon offsets by companies and countries to lower their carbon emissions, saying that implementing those projects only delays climate action.

Charities including Oxfam, Greenpeace and Amnesty International as well as industry bodies and pressure groups like the European Federation for Transport and Environment and NewClimate Institute signed a letter on Tuesday urging companies to stick to scientifically backed methods to lower carbon emissions and in particular for the Science Based Targets Initiative and the Greenhouse Gas Protocol to continue to exclude carbon offsets from their methodologies on how companies can lower emissions.

“Climate targets must focus primarily on reduction of greenhouse gas emissions within companies’ and countries’ own boundaries, including the phasing out of fossil fuel production, transport, sale and use,” the letter said.

“An urgent scale-up of financial support from both public and private actors is needed for this. But allowing companies and countries to meet climate commitments with carbon credits is likely to slow down global emission reductions while failing to provide anything like the scale of funds needed in the Global South, and reducing pressure to develop large-scale mechanisms such as ‘polluter pays’ fees on emission-intensive sectors,” it added.

Scrutiny of carbon offsets has grown in recent months after the SBTi, a nonprofit organisation that helps companies set targets for lowering emissions, said in April it was considering allowing carbon offsets to be part of the tool kit companies could use to reduce their impacts on the environment. That decision had been in opposition to its longstanding policy of excluding offsets, resulting in backlash from within the organisation itself as well as partner companies like Hennes & Mauritz , better known as H&M.

However, companies in industries from technology to mining argue that offsets are key to reducing private-sector emissions and moving to net zero. Microsoft for example has spent hundreds of millions on carbon offset projects, arguing that without doing so the company wouldn’t be able to move to net zero, especially over its indirect emissions.

“It is about creating a market for high-quality high-integrity durable carbon-removal assets,” said Melanie Nakagawa, Microsoft’s chief sustainability officer in a recent interview . “Think about sequestering carbon into the soils using enhanced rock weathering or rocks that are absorbing carbon that is being turned into concrete. Or Mombak, which is a large forestry project in Brazil. These are the ways that we think about applying it.”

In May, the U.S. government also gave its backing for the voluntary carbon market , saying that “high-integrity” voluntary carbon markets can play a role in reaching net-zero emissions globally.

The letter added that offsetting “at best, doesn’t reduce the concentration of GHGs in the atmosphere, it simply moves emission reductions from one place to another.” The charities also argued that allowing offsets to grow means that high-emitting activities are able to carry on.

To add to this, the charities and industry bodies said that there are only so many high-quality projects that can be used to reduce emissions, meaning that demand is likely to outstrip supply. They also questioned offsets’ effectiveness, saying that their use could just lead to deforestation in other areas or lead to social and environmental harm.

“The science clearly shows that offsets fail to deliver additional emissions reductions and are an unreliable tool for fighting the climate crisis,” the groups added.

A spokesperson for SBTi said that the organisation is still in the research phase of its policy revision. “The Corporate Net-Zero Standard hasn’t been changed, and it cannot and will not change until the Standard Operating Procedure for the revision of the Corporate Net-Zero Standard has been completed,” the spokesperson said.

Microsoft didn’t respond to a request for comment.

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

Global Charities Say Using Companies’ Carbon Offsets to Lower Emissions Undermines Climate Targets

Greenpeace, Amnesty International and Oxfam are among over 80 charities arguing that using carbon offsets delays climate action

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.