Germany Rejects Carbon Credits Due to Suspected Fraud in China

Germany's Environment Agency has rejected carbon credits for 215,000 tons of CO2 emissions due to suspected fraud involving climate projects in China. Biofuel producers have criticized the agency, arguing that they have been unfairly disadvantaged. The financial impact is uncertain, but it may result in higher fuel prices for consumers.

Germany's Environment Agency announced on Friday the rejection of carbon credits for 215,000 tons of CO2 emissions from oil companies. The decision follows suspected fraud involving climate projects in China, aimed at helping companies meet EU greenhouse gas reduction targets.

Typically, companies comply by using plant-based biofuels or "upstream emission reduction" (UER) projects. These initiatives cut emissions during oil production, but the agency discovered irregularities in eight China-financed projects for CO2 credits.

Doubts about these projects' existence and standards arose over a year ago, sparking criticism from biofuel producers. Out of 21 projects, only five have received full approval. The financial impact remains unclear, though higher fuel prices are a possibility.

(With inputs from agencies.)