Why are Oil and Gas Companies Investing in Forests?

As climate change and air pollution become growing public concerns, several oil and gas companies have started investing in forest restoration. But, critics say this is ‘greenwashing’ and won’t work.¹ The companies say that they are merely trying to protect the environment and invest in sustainability.

Who is right? Does it matter if fossil fuel companies are also trying to grow more trees? 

Why are fossil fuel companies investing in trees?

‌There is a simple reason why fossil fuel companies are investing in trees. Forests and other ecosystems could provide more than one-third of the total carbon dioxide reductions we need to keep global warming below 2 °C, found a major study in 2017.²

Fossil fuel companies say that investing in forests and planting more trees would offset some of the CO2 that their products emit and limit the damage from greenhouse gases.³

Equinor, Shell & BP investment pledges to reduce carbon footprint

In 2018, the Norwegian oil and gas company Equinor said it would pay to protect tropical forests to reduce its carbon footprint.⁴ Months after, oil giant Shell promised to spend USD $300 million over three years “to invest in natural ecosystems” and reduce its carbon footprint.⁵ Meanwhile, BP has committed to “achieving carbon neutral status”.⁶

But, it is also a financial investment. Fossil fuel companies are effectively buying ‘carbon credits’ by buying forests, they hope that a rise in carbon credit prices later would boost their profits. “Investing in carbon sequestration, at a time when the world is increasingly carbon-constrained, over time will prove to make good commercial, business sense”, Duncan van Bergen, Shell’s head of Nature Based Solutions, told Reuters.⁷

Fossil fuel companies and carbon offsetting

Why not applaud fossil fuel companies for planting more trees? Wouldn’t that make our air healthier and stop climate change? Not exactly.

Planting more trees only does so much to stop catastrophic climate change. But it cannot be the solution, according to scientists, given that trees take decades to absorb carbon, and we are running out of time.⁸

How effective are these oil and gas companies’ efforts in CO2 reduction?

‌Moreover, the carbon offset targets by big oil and gas companies are minuscule.⁹ Also, none of the big oil or gas companies have yet created an energy transition plan that matches the Paris Agreement’s goal of limiting warming to 2˚C or below.¹⁰

In the face of such a huge challenge, oil and gas companies’ efforts are a drop in the ocean. While forests and nature are essential tools in the fight against climate change, we will only win the climate fight if we keep fossil fuels in the ground and trees standing.

1. Monbiot, G. (2019). Shell is not a green savior. It’s a planetary death machine | George Monbiot. [online] the Guardian. Available at: https://www.theguardian.com/commentisfree/2019/jun/26/shell-not-green-saviour-death-machine-greenwash-oil-gas.
2. Griscom, B.W., Adams, J., Ellis, P.W., Houghton, R.A., Lomax, G., Miteva, D.A., Schlesinger, W.H., Shoch, D., Siikamäki, J.V., Smith, P., Woodbury, P., Zganjar, C., Blackman, A., Campari, J., Conant, R.T., Delgado, C., Elias, P., Gopalakrishna, T., Hamsik, M.R. and Herrero, M. (2017). Natural climate solutions. Proceedings of the National Academy of Sciences, [online] 114(44), pp.11645–11650. Available at: https://www.pnas.org/content/114/44/11645.
3. DeSmog UK. (n.d.). Investigation: The Problem with Big Oil’s “Forest Fever.” [online] Available at: https://www.desmog.co.uk/2020/07/06/big-oil-forest-fever [Accessed 18 Apr. 2021].
4. Staff, R. (2018). Oil firm Equinor prepares to pay for tropical forest protection. Reuters. [online] 20 Nov. Available at: https://www.reuters.com/article/us-equinor-outlook-environment/oil-firm-equinor-prepares-to-pay-for-tropical-forest-protection-idUSKCN1NP0II [Accessed 30 Mar. 2021].
5. in (2019). Shell invests in nature as part of a broad drive to tackle CO2 emissions. [online] Shell.com. Available at: https://www.shell.com/media/news-and-media-releases/2019/shell-invests-in-nature-to-tackle-co2-emissions.html.
6. BP. (n.d.). Achieving carbon neutral status | bp Target Neutral. [online] Available at: https://www.bp.com/en_gb/target-neutral/home/achieving-carbon-neutral-status.html [Accessed 30 Mar. 2021].
7. Nasralla, S. (2020). Big carbon? Oil majors turn to nature to help plug the revenue gap. Reuters. [online] 8 Dec. Available at: https://www.reuters.com/article/us-climate-change-oil-carboncredits-focu-idUSKBN28I0HM [Accessed 30 Mar. 2021].
8. Buis, A. (2019). Examining the Viability of Planting Trees to Help Mitigate Climate Change – Climate Change: Vital Signs of the Planet. [online] Climate Change: Vital Signs of the Planet. Available at: https://climate.nasa.gov/news/2927/examining-the-viability-of-planting-trees-to-help-mitigate-climate-change/.
9. Rathi, A. (2019). Shell will spend $300 million to offset carbon emissions. Here’s the catch. [online] Quartz. Available at: https://qz.com/1590325/whats-wrong-with-shells-plan-to-offset-your-carbon-emissions/ [Accessed 30 Mar. 2021].
10. Grantham Research Institute on climate change and the environment. (2020). Emissions targets in the oil and gas sector: How do they stack up? [online] Available at: https://www.lse.ac.uk/granthaminstitute/news/emissions-targets-in-the-oil-and-gas-sector-how-do-they-stack-up/.