Methane is behind around 30% of the rise in global temperatures since the Industrial Revolution. The largest share of emissions comes from agriculture, primarily livestock digestion and the decomposition of manure and other organic matter. In China, the energy sector is the largest source , with agriculture a close second.
Emissions offsets designed to curb farmyard methane via improved manure management used to be rare. Only about two projects were proposed per year in 2006 to 2021. Then interest surged. Around a hundred new projects applied for inclusion in markets between 2022 and 2024, according to public registries .
The vast majority of those were pig farms in China, which promised to replace open-air slurry pits with waste management systems that capture and reuse methane to produce heat, electricity or fertiliser.
Credits from these projects have been purchased by a wide range of global buyers, from major oil and gas giants such as Shell and China National Petroleum Corporation, to Chinese battery maker CATL and the University of Melbourne, the registriesshow.
But new research by CarbonPlan, a climate advocacy group based in California, found that nearly a third of the associated carbon credits may not deliver real climate benefits. The findings is part of a global trend of carbon offsets failing to live up to their billing, experts told Dialogue Earth.
Would the projects have happened anyway?
CarbonPlan’s analysis, which has yet to undergo peer review, hinges on the concept of “additionality.” It asks: would this have happened anyway? Projects that need credit revenues to be financially viable are considered additional. But projects that make operational changes because they deliver economic returns without credit revenues – or because such changes are required by local regulations or evolving industry standards – should be considered “non-additional” and excluded from markets.
Out of 74 pig farms in China that stated plans to use captured biogas to generate heat or electricity, 18 projects – or 31% of the potential annual supply of this kind of carbon credit – were “non-additional,” meaning estimated energy generation from biogas saved the farms enough money to make the project financially viable without credit revenue, according to the report.
It’s endemic and across the board. The buyer and seller are both incentivised to exaggerate Joseph Romm, University of Pennsylvania CarbonPlan calculated their additionality threshold – by comparing self-reported project data on factors such as the number of pigs and heat output from burned biogas against energy cost estimates from the National Development and Reform Commission, China’s state planner.
Four researchers who track voluntary carbon markets or Chinese agricultural policies vouched for the general methodology.
Gold Standard, one of the two credit certifiers that verified the projects, said that it would carefully review CarbonPlan’s report and declined to comment on individual projects or project developers. “Additionality assessments are based on a comprehensive evaluation of financial, technical and operational factors, rather than any single indicator, such as energy self-sufficiency,” the organisation said in an emailed response to questions.
A spokesperson for the other credit certifier, Verra, said the organisation “will look into the specific projects if required” but that the report’s methodology was too broad for the conclusions drawn – applying provincial energy cost averages “across all farms in a province, without accounting for variability in farm size and configuration, fixed electricity costs,” and other project-specific factors.
The findings raise serious questions about widespread lapses in data reliability and quality-control by registries and third-party verifiers, said Grayson Badgley, a research scientist at CarbonPlan who co-authored the article.
“There is strong evidence of non-additionality throughout the carbon market – including renewable energy, forestry, cookstove, and now pig manure management projects,” Badgley said. “Absent serious reform, consumers should treat any environmental claim backed by offsets with scepticism.”
Voluntary carbon markets face credibility concerns
The findings come amid a global reckoning for the voluntary carbon market. Confidence in the value of offset credits has been undermined by widespread accusations of overstated emissions reductions, unverifiable climate claims and fraud. That loss of faith has intensified long-standing complaints of greenwashing by businesses who buy credits to avoid cutting their own emissions.
In 2024, a Dialogue Earth investigation into rice cultivation credits found little evidence of farmers using the advertised methane-curbing irrigation methods. That scandal has continued to reverberate through markets: Climate Home News reported in December that Verra compensated buyers of those bogus offsets with other junk credits.
Standard-setting agencies have tried to restore confidence with stricter quality control. Because methane has 27 to 30 times the atmosphere-warming potential of carbon dioxide over 100 years, methane projects were generally considered higher quality than scandal-plagued credits from forest conservation or rice paddy irrigation.
CarbonPlan’s analysis casts doubt on that assumption. Take, for example, a project comprising eight swine farms in southern Guangdong province. Certified by Gold Standard, the project has since 2021, seen over 700,000 credits issued based on annual emissions reductions of 423,000 tonnes of carbon dioxide equivalent.
CarbonPlan estimated that the biogas-fuelled generators involved in the project would produce enough electricity to meet all project needs, indicating it would likely have gone ahead without climate finance. The savings of nearly CNY 13 million (USD 2 million) per year were absent from financial statements.
Even using the most conservative assumptions, there remained “surprising inconsistencies” between the expected savings and what projects disclosed, the report’s authors wrote. These inconsistencies could be explained in part by shoddy paperwork or projects providing incomplete cost-benefit analyses to verifiers, but even so, the findings raise concerns about the verification process, they concluded.
Voluntary carbon markets that grew out of Kyoto Protocol mechanisms were meant to let buyers fund emissions cuts elsewhere to encourage the adoption of climate-friendly technologies and practices in places that might otherwise lack the finances or incentive to take action. But repeated scandals have increasingly undermined the market’s credibility. Recommended Joseph Romm, a senior research fellow at the University of Pennsylvania Center for Science, Sustainability and the Media, who reviewed the research, said that CarbonPlan’s count looked conservative in light of his review of a growing body of research attesting to widespread overcrediting from multiple project types worldwide.
“It’s endemic and across the board,” Romm said. “The buyer and seller are both incentivised to exaggerate [the climate benefits of credits].” The usual way to solve concerns of non-additionality is through more robust financial analysis that shows projects are not profitable without credit revenues, said Quirin Oberpriller, an associate partnerat INFRAS, an environmental consulting group based in Switzerland.
That means that the gaps in reporting identified by CarbonPlan are inherently problematic: It “doesn’t make sense” to claim to cut emissions by using biogas but not include the corresponding saving in energy cost in financial statements, Oberpriller said. “If this is the case, it is obviously flawed.”
Incentives, intended and unintended
While pig farms account for a relatively small portion of China’s total methane emissions compared to leakage from coal mines , improved manure management has been identified by the government as an important part of curbing output. In its 2023 methane control plan, the government set a goal of reusing over 85% of livestock manure by 2030.
The agriculture ministry has since at least the 2010s urged farms to implement manure treatment projects to curb water pollution and to reuse biogas, said Fred Gale, a former economist at the US Department of Agriculture. That long-standing push involved a series of subsidised demonstration projects designed to encourage the industry as a whole not to dump slurry in unlined, uncovered pits. Transferring pig manure in a farm in Nayong county, Guizhou province (Image: Luo Dafu / Costfoto / Sipa USA / Alamy) “Farms have been building manure collection or treatment facilities for years, before anyone heard of carbon credits,” Gale said. “I doubt a new farm would be approved without some manure utilisation facility.”
But there may be other drivers behind the sudden increase in farmyard methane credits from China. The uptick also came soon after a major overhaul in the country’s pig farming industry sparked by a severe outbreak of African swine fever in 2018 that resulted in about half of China’s total herd being culled. Recommended Hundreds of backyard farms were closed, as the outbreak accelerated a state-led drive that favoured industrial-scale breeders with modern waste-management systems over smaller operations. Large-scale breeders invested in huge concrete barns that house hundreds of swine, often referred to as “pig hotels” in Chinese media. And the government significantly tightened environmental standards and launched crackdowns on polluting farms that flaunted waste-management rules.
Those regulatory pressures may have incentivised cash-strapped farmers to seek funding from the carbon markets for upgrades already encouraged by the state, Gale said.
At the same time, many breeders faced significant upfront costs from the construction of huge facilities. Many operated at a loss as they rebuilt herds. Soon afterward, the market over-corrected: farmers bred too many pigs, creating a supply glut that tanked prices and compounded cost pressures – a problem that has continued until today.
“It’s not clear that pig farms in China would have been able to scrape together the cash to build these projects – at that time, in that economic context – if it wasn’t for their ability to get offsets,” said Even Pay, a director at research firm Trivium China who reviewed CarbonPlan’s research.
While effective waste-management projects can pay for themselves over time – even without credits – Pay said it was possible that some Chinese pig breeders operating under extreme price volatility needed the additional incentive of credit revenue to adopt emissions-curbing practices.
China’s agricultural sector still lags behind energy and heavy industry when it comes to access to the financial, technical and policy support needed to prioritise emissions cuts, Pay said: “The sooner that a wide range of funding tools are available, the better.”
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