Guide

Cutting your carbon emissions

Avoiding carbon credit scams

Carbon credits are financial instruments which permit the holder to emit one tonne of carbon dioxide. These can be traded if the emission allowance is not used.

Carbon markets are not intended for personal investors - if you buy carbon credits for money, you can fall prey to rogue traders and be unable to recoup your investment. Scammers can also use uncertainty around carbon markets to deceive businesses into handing over money.

What is a carbon credit scam?

Your business may be contacted by someone offering:

  • carbon credit certificates
  • voluntary emission reductions (VERs)
  • certified emission reductions (CERs)
  • a ‘green’ scheme or project that generates carbon credits as a return on investment

Such scheme do operate legitimately, however certification is voluntary and involves a wide range of bodies and different quality standards that are not recognised by any UK compensation scheme. 

Projects generating carbon credits are usually based overseas so UK authorities have no way of controlling the quality or validity of the schemes.

You should be wary of any scheme which offer green products and services as financial investments. Many businesses have reported they can’t sell or trade their carbon credits, and have lost any money they’ve invested.

Fraudsters can also attempt to pressure businesses into buying non-existent 'green' products through deception. Some contact businesses using the name "Carbon Registry" as part of the Department of Energy and Climate Change (DECC). They will attempt to convince you to buy carbon credits, VERs or CERs at high prices under the threat of government enforcement or legal action.

How to protect your business from carbon credit scams

Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.

It is important to know that carbon credits, emissions trading and such "green investment schemes" are not currently regulated by the Financial Conduct Authority (FCA). Even if an FCA-authorised firm is involved in the sale of carbon credits you have no right to redress or compensation if something goes wrong. You should always get independent professional advice before making any investment.

If you are contacted by someone claiming to work in a government department and applying pressure, take their details and contact the department through their main telephone number or contact form. You can find UK government department contact details on GOV.UK and contact details for Northern Ireland government departments on nidirect.

How to report carbon credit scams

If you have any concerns about a suspected investment scam, contact the FCA on Tel. 0800 111 6768 or by using their scam reporting form.

If the scam involves someone claiming to represent a government body such as DECC, you should contact the PSNI directly on Tel. 101 (the non-emergency number) or online through Action Fraud.