The Climate Cheats II: The Dozen Dirty Businesses report, released by The Morgan Foundation in August 2016, identified several New Zealand companies that heavily utilized “hot air” (fraudulent) carbon credits from Russia and Ukraine to meet their climate obligations.

The report highlighted that the New Zealand government allowed these low-quality, often fraudulent Emissions Reduction Units (ERUs) into the Emissions Trading Scheme (ETS) from 2013-2015, which did not lead to actual emissions reductions.

Companies Identified as Major Users of Fraudulent Credits:

• BP: Identified as a leader in the use of these units.
• Z Energy: Identified as a major user.
• Caltex: Identified as a major user.
• Genesis Energy: Identified as a major user.
• NZ Steel: Cited for making significant profits by purchasing these cheap foreign units while selling or banking more valuable free units provided by the government.
• Various Forestry Companies: The report noted that some, though not all, in this sector were involved.

Key Findings:

• The report noted that while most major petrol companies used these units, Mobil did not, and remained competitive.
• The report argued that these companies profited from pollution by buying these cheap units.
• These actions allowed the New Zealand government to build up a stockpile of units to meet future targets.

The Climate Cheats II: The Dozen Dirty Businesses report, published by the Morgan Foundation in August 2016, identified 12 New Zealand companies that used the largest quantities of questionable foreign carbon credits from Russia and Ukraine to meet their obligations under the Emissions Trading Scheme (ETS).

Key Companies Involved

The report highlighted the following companies as the heaviest users of these “fraudulent” units:

• BP (Identified as the leading user among fuel companies)
• Z Energy
• Caltex (Chevron New Zealand)
• Genesis Energy
• NZ Steel (Noted for profiting significantly by using cheap foreign units while banking or selling more valuable domestic units)
• Contact Energy
• Mighty River Power (now Mercury NZ)
• Todd Petroleum
• Gull
• Holcim
• Pacific Steel
• Pan Pacific Forest Products

Context of the Report

• Fraudulent Credits: The report alleged that between 2013 and 2015, New Zealand was the only country allowing the use of certain Emissions Reduction Units (ERUs) that often did not represent actual emission reductions.
• Economic Impact: The use of these cheap credits (priced near zero) allowed polluters to meet their requirements at a fraction of the cost, while New Zealand’s actual emissions continued to rise.
• Corporate Response: Most companies involved claimed they purchased these credits to provide the best possible price for their customers, though the report noted that Mobil remained competitive without using such units.

GARETH MORGAN REPORT 2. https://morganfoundation.org.nz/wp-content/uploads/2016/08/ClimateCheat2_Report_V8.pdf 16 Pages .. Who’s the Real Cheat Here? Climate Cheats II: The Dozen Dirty Businesses Geoff Simmons & Paul Young August 2016  16 Pages

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RESEARCHER Cassie