Can eating burgers den climate change fight? Swedish fast food chain Max seems to think so. The company not only claims stop emitting greenhouse gases but also describes his burgers – with and without meat – as “climate positive”. Max claims to offset 110 percent of its CO2 Emissions – a total of 147,000 tons in 2020. This is mainly done through donations for planting trees in Uganda, the company says.

That sounds good. In fact, Max’s absolute emissions more than tripled between 2007 and 2021, due to the opening of new restaurants and the associated increase in electricity consumption. And the company assumes that its CO2 emissions will continue to rise.

The burger chain achieves its “net zero claim” in terms of greenhouse bunnies solely by financing CO2 Compensation measures.

How does CO2 compensation work?

Financing measures to reduce CO2 is one way to compensate for environmental damage. Businesses contribute financially to projects that reduce the amount of Carbon dioxide (CO2) in the atmosphere, and in return can continue to pollute the environment themselves.

Examples of such projects are tree planting or the rewetting of moors, which store large amounts of carbon in the soil. According to this logic it is possible to fly “climate-neutral” with the German airline Lufthansa. Even the Soccer World Cup in Qatar described itself as climate neutral.

This kind of climate protection industry has experienced a real boom in recent years. It currently has a market value of $2 billion a year and is expected to grow fivefold by the end of the decade.

Since the invention of the concept of greenhouse gas compensation in 1987, some international treaties, such as the Kyoto Protocol, have allowed industrialized countries to use so-called carbon credits, to comply with emission limits. Each of these credits is equivalent to one tonne of carbon dioxide. The market in which these certificates are traded is huge and amounts to about 261 billion dollars per year. However, experts criticize that the certificates do not effectively reduce CO2 emissions.

Is there cheating when it comes to CO2 compensation?

A research team made up of the British news magazine The Guardian, the German newspaper Die Zeit and the investigative website Source Material recently examined the business of Verra, the world’s largest CO2 certifier. The research shows that more than 90 percent of the compensation deals made by “Verra” are with the rainforest very likely phantom credits. This means that these certificates do not remove any greenhouse gases from the atmosphere, or at least not to the extent specified. “Verra” vehemently denies the results of the research.

“There isn’t enough space on the planet to hold everyone absorbing CO2 emissions through trees”, says Forrest Fleischman, professor of environmental and natural resource policy at the University of Minnesota. Companies shouldn’t be allowed to base their claim that they are “climate-friendly” on offsetting measures alone, says Fleischman.

“When a company claims to be carbon neutral, consumers think it’s not doing any harm to the environment, but in reality changing the business model is costly and time-consuming,” explains Alexandra Mihailescu Cichon, deputy managing director of Reprisk, one in the Switzerland-based data research company that analyzes companies’ environmental, social and managerial practices.

The cost of carbon credits – starting at $4.24 per tonne – is often far below what companies would likely incur to reduce their own emissions. In addition, due to the lack of regulation, there are still no uniform standards on the compensation market, criticizes the data researcher.

CO2 emissions trading in practice

Compensation projects can be roughly divided into two categories: CO2 elimination and CO2 avoidance. Elimination includes measures in which CO2 is actively removed from the air and stored permanently, for example by planting trees or directly separating it from the air. However, CO2 capture technology is not available on a large scale. Among the carbon credits in circulation, active removal of carbon dioxide accounts for only a small percentage.

Projects that prevent the release of greenhouse gases, such as cutting down trees, serve to avoid CO2 emissions. For example, the US bank JP Morgan Chase bought 250,000 hectares of forest for more than 500 million dollars. The bank paid forest owners not to clear trees to absorb CO2 from the atmosphere. At the same time, JP Morgan itself benefited from the purchase in return by generating potential CO2 certificates for its investors.

Critics accuse the bank of greenwashing. It is basically a good thing that the trees are not cut down, they say. But it is difficult to verify whether leaving the trees in place actually results in a “net removal” of CO2 from the atmosphere – and if so, to what extent. The so-called net distance is based on the question of whether the measures from the emission credits have a positive impact on the climate.

Another benchmark for the certification of compensation projects is the “durability” of the activity. If a forest area is saved from exploitation, but the pressure to exploitation of the forests overall does not decrease – then becomes the demand for wood simply relocated somewhere else, for example to another forest?

Experts raise these questions because they fear that the avoided emissions – which generally can only be estimated – are being overstated by those who benefit financially from them.

What alternative approaches to CO2 compensation are there?

However, carbon offsets could soon be subject to stricter scrutiny. The non-governmental organization Integrity Council for the Voluntary Carbon Market is currently developing various standards that can be used to distinguish between good and bad CO2 certificates and to filter out inferior certificates.

Nature-based solutions could also offer answers. A study by the “We Mean Business Coalition”, a global network of seven non-profit climate protection organizations, shows how this can be done.

It states: “If the world’s 1,700 largest emitters were to offset just 10 percent of their greenhouse gas emissions annually through investments in nature, this could remove almost 30 gigatons of emissions from the atmosphere by 2030 and mobilize up to $1 trillion in climate finance .”

Editor: Tamsin Walker

Adaptation from English: Jeannette Cwienk