UK advertising watchdog investigates Shell's 'drive carbon neutral' campaign

LONDON (Reuters) - Britain's advertising watchdog has opened an investigation into claims by Shell RDSa.L that customers at its petrol stations can "drive carbon neutral", after receiving complaints from members of the public, the regulator said on Monday.

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The challenge to Shell’s flagship promotion underscores the dilemmas oil and gas majors face as they seek to market their products despite increasing global concerns about the role of fossil fuels in driving climate change.

Shell said in October that it would become the first petrol retailer in Britain to offset the carbon dioxide emissions from customers’ fuel purchases at its service stations at no extra cost by backing forestry schemes.

The Advertising Standards Authority (ASA) said it began an investigation into radio advertisements for the promotion after 17 listeners complained that they found them misleading.

“We’ve launched a formal investigation into whether the radio ad clearly discloses enough information in relation to this offer and will publish our findings in due course,” said Freddie Alcock, a media officer at the ASA.

Last year, the watchdog approached Norwegian oil and gas company Equinor EQNR.OL after receiving a complaint over an advertisement by the company on the London underground that implied natural gas was a "low-carbon" energy source.

The case was resolved informally when Equinor, which had discontinued the campaign by the time the complaint was assessed, agreed not to repeat the claim in future campaigns, the ASA told Reuters.

The watchdog, which has the power to ban advertisements it deems misleading, did not make the content of the complaints against Shell available. The regulator will also hear from the company and a ruling could take some months to deliver.

“Prior to launching this to our customers we did a huge amount of work and due diligence on our Drive Carbon Neutral offer, and we are happy to speak to the ASA to answer their questions,” said a Shell spokesperson.

Shell also referred Reuters to a company webpage that offers a detailed explanation of how its carbon offset program works.

Carbon offsetting rests on the principle that companies can neutralize the impact of their emissions by paying money to plant forests or restore other types of ecosystems capable of absorbing an equivalent amount of carbon dioxide.

Critics of the schemes say that they give the false impression that it is possible to take meaningful action to slow global warming without following the advice of climate scientists to rapidly scale back the use of fossil fuels.

Shell sees its vast global network of petrol stations as key to its hopes of remaining profitable even if the world manages to rapidly transition to the kind of low-carbon economy needed to avoid worst-case climate change scenarios.

The Anglo-Dutch oil and gas major initially launched its “drive carbon neutral” offer in the Netherlands in April before expanding it to Britain, which is due to host a major U.N. climate summit in Glasgow from Nov. 9-20.

Reporting by Matthew Green; additional reporting by Ron Bousso in London; Editing by William Maclean and Jonathan Oatis