UER projects are measures to reduce CO2 emissions from fuels in the upstream sector, i.e. before the crude oil is processed in the refinery. A typical example is the decommissioning of so-called flares on oil derricks, which usually burn off associated gases during the extraction of crude oil on site, as the conversion of the plant to collect and store the gases is not profitable. However, flaring produces CO2 emissions that can be avoided through successful UER projects. UER projects are attractive for the petroleum industry, which has a comparatively cost-effective way of fulfilling its greenhouse gas reduction quota under the German Federal Emission Control Act.
In seven of the eight projects – which are being carried out by large, international companies – the applications for the approval of UER certificates for 2023 were withdrawn after the UBA confronted the project organisers with serious legal and technical inconsistencies in their projects and threatened an on-site inspection. The UBA thus ensured that no more UER certificates could be issued for these projects for 2023. In this way, the UBA prevented unauthorised UER certificates amounting to 159,574 tonnes of CO2 equivalents from entering the market.
In another project in China, the UBA prohibited the issuing of UER certificates because the project was started prematurely, as comprehensive satellite images and in-depth technical analyses by UBA experts revealed. Such a premature start is not permitted under the Ordinance on the Offsetting of Upstream Emission Reductions against the Greenhouse Gas Quota (UERV). In this case, the UBA prevented unauthorised UER certificates amounting to 55,225 tonnes of CO2 equivalents from this project alone from entering the market by refusing to approve them.
In addition to the eight projects with approval applications for 2023, the UBA is focussing on a further 13 projects. In all of these 21 projects, the project sponsors were asked to authorise on-site monitoring visits. In only five of these 21 projects has the UBA received these authorisations without restriction; two of the visits have already taken place and three more are pending. “For us, the refusal to authorise on-site inspections is a very strong indication that the project sponsors are not prepared to fulfil their obligations under the UERV or – as required by the UERV – have the necessary control over the projects. Among other things, we are taking this as an opportunity to consider cancelling our approval of these projects. And we will ensure that only legitimate UER certificates for new projects are placed on the market,” said Messner.
In addition to the eight projects that have now not been approved, the UBA will review other critical UER projects worldwide until all allegations have been cleared up. “In the coming weeks and months, the UBA will continue its investigative work at full speed on the basis of the findings now available from China. I am personally devoting a considerable amount of my working time to this,” said Messner. The many members of staff at the UBA who are intensively involved in investigating the UER complex are being supported by an international law firm and its partner law firm in China. The law firm acts as the “eyes and ears” of the UBA at the local level.
At the same time – according to the press release – the Berlin public prosecutor's office is investigating 17 people on suspicion of joint commercial fraud. The suspects are the managing directors or employees of inspection centres who are alleged to have been involved in the verification of UER projects. There is an initial suspicion that the defendants deceived the responsible UBA employees with regard to the existence and/or at least the eligibility to apply for various climate protection projects, which is why securities granted by the project sponsors in the meantime could not be obtained for the benefit of the state treasury.
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