Colombia Is Testing the Waters for Carbon-Neutral Crude

State-controlled oil driller Ecopetrol is offering as much as 1 million barrels of oil. Future emissions from that crude will be offset with carbon credits from local renewable-energy projects.

An employee works on maintenance operations at a cracking plant for the Ecopetrol SA refinery in Barrancabermeja, Santander, Colombia.
By Lucia Kassai
December 08, 2021 | 07:27 AM
Reading time: 1 min.

Bloomberg — Colombia, a producer of sludgy, dirty oil, is seeking to sell crude that’s carbon neutral as it tests the market’s appetite for ESG oil.

State-controlled oil driller Ecopetrol SA is offering as much as 1 million barrels of oil, according to an internal document seen by Bloomberg. Future emissions from that crude will be offset with carbon credits from renewable-energy projects in Colombia.

Ecopetrol is following in the footsteps of Occidental Petroleum Corp., which sold a cargo of so-called carbon-neutral U.S. oil to Indian refiner Reliance Industries Ltd. in February. In a similar move in September, Japan’s Inpex Corp. sold liquefied natural gas offset by carbon credits from projects such as forest conservation in Indonesia.

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The Colombian oil producer is testing the waters for carbon-neutral oil and, depending on buyer interest, plans to offer such cargoes on a regular basis, according to a person with knowledge of the situation. The company didn’t immediately return a call and email seeking comment. Bids are due Thursday and the cargoes will load in February.

Terms such as “carbon neutral” and “net zero” imply offsetting emissions by removing an equivalent amount of carbon from the atmosphere. Climate scientists at bodies including the United Nations-backed Science-Based Targets initiative say measures such as preventing deforestation or supporting renewable-energy projects actually do little to extract additional carbon from the air and shouldn’t contribute to net-zero claims.