How fossil fuel interests are polluting the US carbon market rulemaking

The report argues that fossil fuel interests use corporate lobbying, trade associations, and advisory roles to maintain the availability of cheap, low-quality carbon credits to avoid structural decarbonization. It details specific efforts to weaken California's cap-and-trade program and oppose transparency laws like AB 1305, while highlighting the role of the CFTC in federal oversight. The document concludes with recommendations to ban fossil fuel companies from climate advisory roles and eliminate carbon credits from California's compliance mechanisms.

• Between 2005 and 2026, major oil and gas companies BP, Chevron, ExxonMobil, and Shell spent nearly $127 million lobbying California on climate policy, with Chevron being the highest spender at an estimated $101.7 million.
• The Western States Petroleum Association (WSPA), a major lobby group for oil and gas, spent nearly $146.8 million on California climate policy lobbying between 2005 and 2026.
• Fossil fuel companies have sought to influence the Commodity Futures Trading Commission (CFTC) through advisory roles, such as BP and Shell representatives serving on the Energy and Environmental Markets Advisory Committee (EEMAC) and the Climate-Related Risk Subcommittee.
• Trade associations like the American Petroleum Institute (API) and the International Emissions Trading Association (IETA) have lobbied the CFTC to avoid 'overly burdensome' regulations that could limit the growth or flexibility of the voluntary carbon market.
• In California, oil companies and trade associations have consistently lobbied to maintain or increase the limit on carbon credits used for compliance in the cap-and-trade program, arguing that credits are a 'critical element' for cost containment.
• Research indicates significant quality issues with California's forest carbon credits; one study found that 82% of credits under the US Forest Offset Protocol likely do not represent true emissions reductions, resulting in 80 million tonnes of overestimated emissions.
• The Voluntary Carbon Market Disclosures Act (AB 1305), which requires public disclosure of carbon credit use and durability, was strongly opposed by the WSPA and other industry players before coming into effect in January 2024.
• A coordinated effort by approximately 35 organizations, including IETA and the California Chamber of Commerce, opposed Senate Bill 1036, which sought to outlaw the sale of carbon credits that are not quantifiable, real, additional, or durable.
• Opponents of SB 1036 used a misrepresentation of IPCC reports to argue that there is no scientific consensus on the atmospheric lifetime of CO2 to challenge the bill's durability requirements.
• Assembly Bill 1911, which would have created a 'safe harbour' for companies using approved carbon credits in marketing claims, was stalled by the Appropriations Committee in 2026.

APA

Wyburd, I. (2026). How fossil fuel interests are polluting the US carbon market rulemaking. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2026/06/Oill-Spill-2-Combined.pdf

Chicago

Wyburd, Inigo. How fossil fuel interests are polluting the US carbon market rulemaking. Carbon Market Watch, 2026. https://carbonmarketwatch.org/wp-content/uploads/2026/06/Oill-Spill-2-Combined.pdf.

Wikipedia

{{cite report |last1=Wyburd |first1=Inigo |title=How fossil fuel interests are polluting the US carbon market rulemaking |publisher=Carbon Market Watch |date=June 2026 |url=https://carbonmarketwatch.org/wp-content/uploads/2026/06/Oill-Spill-2-Combined.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wyburd2026how, author = {Wyburd, Inigo}, title = {{How fossil fuel interests are polluting the US carbon market rulemaking}}, institution = {Carbon Market Watch}, year = {2026}, month = jun, url = {https://carbonmarketwatch.org/wp-content/uploads/2026/06/Oill-Spill-2-Combined.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }