Between the Oil Price Rally and Climate Billions: How Shell, Eni, and Zefiro Methane Are Profiting

Shell: The Giant Focuses on Image Management

The escalation in the Strait of Hormuz is shaking up the oil markets. Following recent US attacks on targets in Iran and retaliatory strikes by the Revolutionary Guards, the oil price jumped by more than 7% on Monday. On Tuesday, it continued its steep climb. Shares of the major oil companies also rose noticeably. Nevertheless, they are fairly valued: Europe’s industry leader, Shell, continues to attract investors with a single-digit price-to-earnings (P/E) ratio and a dividend yield of around 4%. Its Italian competitor Eni goes one better with a 5% dividend yield.

Unlike in the United States, where burning fossil fuels has become socially acceptable again under President Donald Trump’s policies, oil multinationals in Europe, however, are saddled with a negative image. To counter this and even position themselves as climate pioneers, both companies are among the world’s largest buyers of voluntary CO₂ credits. Shell was the clear number one in 2025 with offset credits for 9.75 million metric tons of CO₂ equivalents. On the one hand, Shell is itself one of the largest CO₂ credit brokers through its trading division, selling offset solutions to corporate customers. On the other hand, the company uses the credits to market its own products as climate-neutral—such as shipments of liquefied natural gas (LNG) or fuel at gas stations. This is purely voluntary; it is not a legal requirement. A large portion of the credits purchased so far come from so-called REDD+ forest conservation projects, which aim to halt deforestation and thereby reduce greenhouse gas emissions.

However, this is precisely where one of the biggest problems lies. The British company has come under criticism regarding the quality of these credits. Investigations by journalists and environmental organizations concluded that a forest conservation project in Peru, in which Shell is involved, issued credits for an area that had already been protected for years. The claimed additional benefit is therefore questionable. In the case of a project in Zimbabwe as well, the certifier Verra had to retroactively withdraw credits. A widely cited investigation by the British newspaper The Guardian estimated that up to 94% of the credits issued by Verra, the largest certifier, were ineffective “phantom” credits. At the same time, Shell is pulling out of several offshore wind projects. Just on Monday, the company announced the sale of its Indian solar and wind division, Solenergi Power, for USD 1.8 billion.

Eni: The Concentration Risk in the African Jungle

In 2025, Eni was the world’s second-largest buyer of CO₂ credits. The company, whose logo features a six-legged, fire-breathing dog, retired 6.44 million metric tons of CO₂ equivalents—an increase of over 80% compared to the previous year. The Italian company focuses on a very small number of large projects. The majority comes from just eight REDD+ forest conservation projects, primarily in the Democratic Republic of the Congo and Tanzania. This high concentration on a few sources makes Eni particularly dependent on their quality.

Eni also acts as a developer and broker of credits itself. The company initiates its own forest conservation projects, most of which are certified under the Verified Carbon Standard (VCS) and the Climate, Community & Biodiversity Standard (CCB) from Verra. It uses them both to offset its own emissions (such as those from gas stations, most of which are operated in Germany under the Agip brand) and to resell to other companies.

As with Shell, critical voices are growing. A widely noted Bloomberg investigation from 2023 explicitly listed Eni, alongside Shell and Delta Air Lines, among the users of popular REDD+ credits that failed to deliver the promised emissions reductions in practice. A study by the UC Berkeley Goldman School of Public Policy concluded that a large portion of these credits do not demonstrate verifiable additional CO₂ savings. This finding makes Eni’s portfolio particularly vulnerable given its focus on precisely this type of project.

Zefiro: The Problem-Solver with the Trump Card

At the other end of the market is a company that has so far remained largely under the radar: Zefiro Methane. Through its US-based subsidiary Plants & Goodwin (P&G), the Canadian environmental services company specializes in plugging abandoned and orphaned oil and gas wells across the United States. These orphan wells can leak methane for decades if left unplugged. Methane is a greenhouse gas with a significantly greater short-term warming impact than carbon dioxide. Zefiro measures emissions both before and after each well is plugged and uses the resulting data to generate certified Methane Emissions Reduction Credits (MERCs). These credits are verified under a dedicated methodology developed by the American Carbon Registry, making Zefiro the first company to commercialize certificates under this standard. Buyers of these credits already include major commodity trading firms such as Mercuria Energy America and EDF Trading.

Unlike the forest projects by Shell and Eni, Zefiro’s method is based on a directly measurable and verifiable before-and-after effect rather than on future assumptions that are difficult to verify—precisely the quality that the market is increasingly seeking, according to the Berlin-based climate protection company Planet2050. The business is also to benefit from the EU Methane Regulation. Starting in 2027, oil and gas exporters such as the US and Qatar must document all methane emissions to continue supplying the EU—a standard for which measurement and mitigation are increasingly in demand. Zefiro’s business model fits this need like a glove.

Operationally, Zefiro is growing strongly. In the past quarter, the company generated approximately USD 11 million in revenue, a 58% increase compared to the same period last year, although the newly established certificate business was still negligible. The majority of revenue came from the operational plugging of wells by its subsidiary, P&G, on behalf of both government agencies and private companies. In addition to funding from the multi-billion-dollar US infrastructure program IIJA, another pillar of the business is gaining prominence: the plugging of boreholes at sites where energy infrastructure for AI data centers is to be built.

The market potential is enormous. The remediation cost for the estimated minimum of 2.2 million abandoned wells in the US alone is USD 400 to 600 billion. Given these dimensions, Zefiro’s revenue forecast of USD 40 million for the entire 2025/26 fiscal year ending June 30 appears quite conservative, especially since new orders are coming in continuously. The future order volume is virtually impossible to handle with the current workforce, which is why the management team led by CEO Catherine Flax is constantly on the lookout for acquisition opportunities to secure new personnel and equipment.

Conclusion: The Warrant to the Future

The crucial question is not when, as with Shell and Eni, generous dividends will be paid, but how quickly Zefiro can prepare itself for upcoming growth. Even though profitability is usually secondary in such phases of corporate development, management is acting with sound judgment. Over the past three quarters, the operating result has consistently been positive, even though the bottom line still showed a small loss each time. The foundation for a sustainable move into profitability has at least been laid, and the significant leverage provided by the market for voluntary CO₂ credits is only just beginning to take shape. While the stocks of the two major corporations represent a promising—and, thanks to dividends, high-yield—bet on oil prices, Zefiro Methane is something like a warrant on the future. At USD 0.47 (currently trading between EUR 0.40 and EUR 0.42 on German exchanges) and a market capitalization of just under EUR 38 million, the share remains at the micro-cap level. But it is only a matter of time before the capital market takes notice of this extraordinary story.

A strategic partnership with the Well Done Foundation (WDF), which was just finalized, is also likely to increase the company’s visibility. The nonprofit organization was founded in 2019 by Curtis Shuck, a former oil industry executive, and has since plugged more than 120 wells, saving over 5 million metric tons of CO₂ equivalent. Initially, 10 methane seeps in a nature reserve in Oklahoma are to be plugged this year, with 20 to 60 more planned for the future. Although this is a nonprofit project, Zefiro is being paid by the foundation for the work. However, the focus is less on the immediate financial benefit and more on the long-term access to other US states, such as Texas and California, that this provides for the company. In addition, there are connections with companies such as Oracle and ABB, which support the WDF’s work.

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