Which company used the most carbon credits in 2024? Though tech giants often hog the carbon market headlines, the biggest user by a wide margin was Shell, which retired 14.5 million credits in 2024, according to figures released last week by AlliedOffsets, a carbon markets data firm. Microsoft, the tech’s sector biggest user, came in a distant second with 5.5m retirements.
Yet the raw numbers are not the most significant difference between the two companies that sit atop the buyers’ leaderboard. An examination of the credits each company retired emphasizes the divergent strategies the two are taking in the carbon markets.
Tale of two companies
Microsoft, which did not feature in the 2023 top 10, focused almost exclusively on carbon removal credits. Close to 80 percent of the credits it retired were from projects that generate energy by burning biomass and then capturing and storing the associated emissions. Because the biomass captures carbon dioxide as it grows, the process, known as bioenergy with carbon capture and storage (BECCS), can be carbon negative. The company’s largest BECCS purchase, for 3.3 million credits, was with the Swedish company Stockholm Exergi.
BECCS is an important part of some global net-zero pathways. It’s also a relatively new and expensive technology. Microsoft did not reveal the price of the credits it purchased from BECCS developers, but in November AlliedOffsets estimated the average price of a BECCS credit at $389. The average price of Microsoft’s 2024 purchases for which AlliedOffsets has data was $189.
Shell, which also topped AlliedOffset’s 2023 leaderboard, focused on projects that avoided greenhouse gas emissions. The company retires credits to offset its emissions and, unlike Microsoft, also helps clients acquire credits. It used more established credit types, retiring 9.4 million forestry and land use credits and 2.4 million renewable energy credits.
Projects of this type are far cheaper: the average price paid by Shell was $4.15. They’re also more likely to be associated with integrity issues. Just over 600,000 of the credits that Shell retired, for example, were generated by projects that followed methodologies that were rejected last year by the Integrity Council for the Voluntary Carbon Market (ICVCM), a key arbiter of credit quality.
Shell’s focus on relatively low-cost forestry and renewables projects is similar to other energy companies, which as a sector dominate the top 10 positions on the leaderboard. “The companies’ overall emissions may explain the different strategies taken: energy firms have among the highest emissions and low revenues per emissions,” said Anton Root, co-founder of AlliedOffsets. “Tech firms, on the other hand, tend to have high revenues per ton emitted, allowing them to spend more on offsetting their footprints.”
Cutting super-pollutants
Further down the leaderboard there’s evidence for other strategies being pursued by large buyers:
- Lenovo, a Hong King-based technology company, retired just over 1 million credits generated by a project that cuts emissions of pollutants with high global warming potential from chemical plants. The company also purchased 244,000 renewable energy credits that follow methodologies rejected by the ICVCM.
- Takeda, a pharmaceutical firm headquartered in Tokyo, retired close to a million credits from projects that reduce the use of refrigerant chemicals that have high global warming potential.
- Canada Growth Fund, a public investment fund, retired 3 million credits for $85 each from a yet-to-be constructed waste-to-energy plant that will capture and store the emissions it creates.
[Get the latest insights on carbon markets, disclosure, nature and more at GreenBiz 25 — our premier sustainability event, Feb. 10-12, Phoenix.]
