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Big carbon? Oil majors turn to nature to help plug revenue gap

Big carbon? Oil majors turn to nature to help plug revenue gap

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LONDON (Reuters) – Oil companies such as BP and Shell are nurturing nature as a future revenue stream, betting on an expected rise in carbon credit prices as their fossil fuel profits ebb.

European oil majors say investing in projects to create more credits is simply good business, offering new revenue streams at a time when oil prices have collapsed and appetite for new exploration evaporates.

“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.

Shell’s budgets, for example, are based on a carbon price of $85, or around 70 euros, a tonne by 2050 which is more than twice the current price of just under 30 euros on the EU carbon-trading scheme.

While each “registry”, or voluntary market, has its own rules for entry, they generally work by certifying credits for carbon-reducing projects which preserve forests or wetlands or help swap out wood or coal burning stoves with ones using cleaner fuels.

Shell plans to spend $100 million on average over the next year or two on nature-based carbon offsets and van Bergen expects emissions cuts from nature-based solutions or carbon sinks will be “material” by 2030 or 2035.

In August it bought Select Carbon which helps farmers in Australia modify their land use and certifies credits for use in a government-managed scheme or sold on the secondary market.

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