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News Article

Workers in Veracruz Criticize BP’s Carbon Offset Program

By Kristelle Gutiérrez | Wed, 07/06/2022 - 10:47

In Coatitila, a small town in the state of Veracruz where the average worker earns US$6.40 a day on average, the opportunity to participate in the UK-based oil giant BP’s program CO₂munitario was met with enthusiasm. However, locals have spoken out against the program, alleging they have not been paid fairly for their work, while the IOC said it is working to resolve the issue.

The program, ran in cooperation with leading climate non-profit World Resources Institute (WRI), enabled the community to engage in reforestation as a new way to create a livelihood. This program consists in using carbon offsets to turn carbon dioxide captured by protecting trees into a valuable commodity. Bloomberg News revealed the workings of BP’s carbon offsets program. Community members in Coatitilán were first approached by the British IOC in 2019, with the offer of implementing a strategy to protect their communally owned forests and improve forest management in the area. At the time, BP put forward US$2.5 million to start the program, a figure matched by the US Agency for International Development (USAID). Two years later, local workers received their first annual payment, which was only 65 percent of the sum that they were expecting to earn.

In February 2020, BP announced that it would focus its efforts on becoming a net-zero company by 2050. This involved enabling sustainable livelihoods of the communities with which BP works: “We will support the communities where we work to build greater resilience and more sustainable livelihoods. ‎We will focus our social investment in support of our sustainability aims. Through these actions, we aim to ‎reach more than 1 million people. We will also support our workforce through quality jobs with fair conditions,” reads the company’s website.

According to Bloomberg, each carbon offset should equal a ton of carbon absorbed and BP, as the buyer of carbon credits, would reward the community for its care while “acquiring an asset that could be held as an investment or sold to third parties and used to write off corporate carbon emissions.”

However, the IOC ended up paying as little as US$4 per offset to subsistence farmers in Coatitila, which is about 15 percent of what other companies are currently offering for offsets in Mexican projects. Globally, the average forestry offset sells from US$12 to US$16, according to Guy Turner, Founder and CEO, Trove Research. Although several community leaders confronted WRI’s local contractors about the payment disparity and BP appeared to be ready to pay based on the market price, no further information was provided further down the line.

Since 2019, CO₂munitario has spanned across 59 communities in six states, such as Campeche and Quintana Roo. It currently covers around 200,000ha of land. In these other communities, leaders and workers have voiced similar complaints and have even opted out of BP’s program.

In Petacab, Quintana Roo, local landowners were able to negotiate with other organizations, thereby materializing better offers of US$10 per carbon offset. A community in Nuevo Bécal, Campeche has successfully started its own reforestation project.

Furthermore, the government called for a meeting on June 28 regarding voluntary carbon markets (VCM) in the country, involving the environmental ministry and international organizations like Climate Action Reserve (CAR). Government officials emphasized the importance that VCMs are developed with a focus on climate justice, a just distribution of benefits and value creation for the communities involved.

In a recent press release, BP commented on the controversy. The company explained that it is currently working to restructure its payment mechanism.

The data used in this article was sourced from:  
Bloomberg, BP, SEMARNAT.
Photo by:   Conscious Design
Kristelle Gutiérrez Kristelle Gutiérrez Junior Journalist & Industry Analyst