The European Commission’s (EC) 2024 Climate Action Progress Report highlights significant strides in reducing greenhouse gas (GHG) emissions across the EU, with an 8.3% decrease in 2023. This marks one of the largest non-COVID-related declines in recent history, driven largely by a 24% reduction in emissions from electricity production and heating. 

Trading Carbon, Saving the Planet: How EU ETS Drives Climate Action

What makes such a significant reduction in EU emissions possible is the bloc’s Emissions Trading System (ETS). The ETS is a key policy tool that slashes GHG emissions across several high-emitting sectors. It applies the polluter pays principle, holding companies accountable for their emissions in these key sectors:

• Electricity and heat generation,
• Industrial manufacturing, 
• Aviation, and 
• Maritime transport

Together, these sectors account for about 40% of the EU’s total emissions. 

Launched in 2005, the ETS has been a cornerstone of the EU’s climate strategy and 2050 net zero goals. 

Achievements of the EU ETS

According to the report, by 2023, the EU ETS had significantly driven down emissions in its covered sectors. Key accomplishments include:

• 47.6% emissions reduction in electricity, heat generation, and industrial manufacturing compared to 2005. 
• Raised over €200 billion through allowance auctions, with €43.6 billion generated in 2023. Member States have used these funds to:

• • Support renewable energy projects.
  • Improve energy efficiency.
  • Develop low-emission transport solutions.

The 2023 revision of the EU ETS Directive introduced significant updates. As of June 2023, Member States are now required to direct all ETS revenue (or an equivalent amount) toward climate action and energy transformation. This includes measures to address the social impacts of the green transition.

• RELATED: EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman

Non-ETS sectors like buildings, agriculture, transport, and waste saw modest reductions, driven by a 5.5% decrease in building sector emissions. The EU’s carbon sinks in the Land Use, Land Use Change, and Forestry (LULUCF) sector increased by 8.5%. This raise reverses a decade-long decline, though further efforts are needed to meet long-term targets.

The Transition Powering Europe’s Emissions Drop

Provisional 2023 data of the EC report shows that the region is on track to meet its goal of cutting GHG emissions by at least 55% by 2030, compared to 1990 levels. To stay on target, the EU needs to reduce emissions by an annual average of 134 million tonnes of CO₂ until 2030. That is slightly more than the 120 million tonnes reduced annually between 2017 and 2023. 

Achieving this goal will require fully enforcing climate policies and increasing investments. After 2030, the focus will shift to tougher industries and boosting carbon removal to reach net zero by 2050.

In 2023, greenhouse gas emissions saw their largest annual drop in decades, apart from the COVID-19 pandemic year of 2020. By the end of the year, total net emissions were 37% lower than in 1990, while the economy grew by 68% over the same period. This highlights the ongoing decoupling of emissions from economic growth, showing it’s possible to reduce emissions while expanding the economy.

EU GHG Net Emissions (EU Target Scope) and By Sector

The report attributes the 8.3% emissions drop to a strong transition to renewable energy sources, particularly wind and solar, which now supply nearly 45% of EU electricity. Moreover, electricity and heat supply fell slightly by 3.1% and 2.3%, respectively. 

Preliminary data shows renewables became the top electricity source, generating 44.7%, compared to 32.5% from fossil fuels and 22.8% from nuclear. Hydropower and nuclear energy also rebounded.  

Additionally, gas has replaced coal in many cases, resulting in a 20% reduction in fossil fuel-generated electricity compared to 2022.

The EU’s ambitious climate goals are embedded in the European Green Deal and the 2021 European Climate Law. Its 2050 net zero goal includes a binding target of a 55% reduction in GHG emissions by 2030 relative to 1990 levels. This target is supported by the “Fit-for-55” legislative package, which includes expanding the EU ETS to cover more carbon-intensive sectors. The goal is to create further economic incentives to reduce emissions.

Economic Growth and Climate Action, Together

While the EU has already achieved a substantial emissions reduction, the report underscores ongoing challenges. 

For instance, emissions from the EU ETS-covered aviation sector rose by 9.5% while other sectors showed slow progress in reductions. Agricultural emissions dropped by 2% and transport emissions by less than 1%. These figures indicate areas where the EU will need to accelerate efforts to meet future targets.

Looking ahead, the EU is contemplating a new emissions target for 2040, with the Commission recommending a 90% GHG reduction. Achieving this target would require an estimated €660 billion annually for energy systems and €870 billion per year in the transport sector. 

• READ MORE: EU Carbon Prices at 28-Month Low Amid New 2040 Climate Goal

Priority investments would focus on decarbonizing industrial processes, enhancing energy efficiency, shifting towards electrification, and developing sustainable fuels for the transport sector.

As the EU prepares for global climate talk, COP29, Wopke Hoekstra, Commissioner for Climate Action, emphasized that the EU’s efforts showcase how economic growth and climate action can coexist. 

The report stresses the importance of climate resilience and international cooperation, particularly through the upcoming COP29. The bloc aims to lead in global climate finance and development assistance, contributing a third of global public climate funding.

The post How Did the EU Cut Over 8% of GHG Emissions in 2023? appeared first on Carbon Credits.

Canada’s upcoming emissions cap on the oil and gas sector aims to cut greenhouse gas emissions by 37% by 2030 from 2022 levels. However, the energy industry and provinces like Alberta are strongly opposing it. 

The plan, unveiled Monday, introduces a cap-and-trade system designed to encourage higher-polluting firms to invest in emissions-reduction projects while recognizing better-performing companies. The intent to cap the oil and gas industry was first revealed during the COP28 last year in Dubai. 

Beyond Black Gold: A Green Transition?

Environment Minister Steven Guilbeault clearly emphasized the importance of this move, stating that:

“Every sector of the economy in Canada should be doing its fair share when it comes to limiting our country’s greenhouse gas pollution, and that includes the oil and gas sector. We are asking oil and gas companies who have made record profits in recent years to reinvest some of that money into technology that will reduce pollution in the oil and gas sector and create jobs for Canadian workers and businesses. ”

Canada’s oil and gas sector contributed 31% of the country’s total emissions in 2022, per the latest National Inventory Report. It is the largest emitting sector, followed by the transportation and buildings sectors.

High Stakes in the Oil Sands

In 2022, Canada’s oil sands led to oil and gas emissions of 87 megatonnes or 40% of the sector’s total. The sector’s emissions have largely been driven by increased production. 

Since 1990, Canada’s total crude oil output surged by 193%, primarily fueled by oil sand operations, which grew over 800% and accounted for 80% of this production increase. This growth underscores the oil sands’ significant impact on Canada’s total emissions.

These major carbon emitters are largely concentrated in the provinces of Alberta and Saskatchewan, where oil sands and natural gas production are prevalent. Here are a few key players, with their latest GHG emissions reported and net zero goals. 

Suncor Energy Inc.

One of Canada’s largest integrated energy companies, Suncor operates in Alberta’s oil sands, where its extraction and processing activities generate significant emissions. The oil major’s GHG emissions totaled almost 35 million metric tons of carbon dioxide equivalent (MtCO₂e) in 2022. 

Suncor aims to achieve net zero in its operations by 2050 and cut emissions by 10 megatonnes across the value chain by 2030. The company has been actively pursuing emissions reduction initiatives, including investments in carbon capture and renewable energy.

Canadian Natural Resources Limited (CNRL)

CNRL is among Canada’s top oil sands producers and one of the largest carbon emitters in the country, releasing over 23 million MtCO₂e in 2022. They are a key member of the Pathways Alliance, along with Suncor, which aims to build carbon capture and storage (CCS) networks to reduce sector emissions.

• RELATED: Canada’s $16.5 Billion Bet on Carbon Capture: Could It Cut Oil Sands Emissions?

The energy firm commits to reducing its carbon footprint by 40% in Scope 1 and 2 GHG emissions by 2035m compared with the 2020 baseline. It also targets to reach net zero emissions by 2050. 

Imperial Oil Limited

A major player in the oil sands and petrochemical industries, Imperial Oil operates facilities with large carbon footprints, including open-pit mining and in-situ extraction operations. It has also partnered with CCS initiatives to cut emissions.

The oil major aims to hit net-zero scope 1 and 2 emissions, from operated assets by 2050. Its emissions totaled 8.9 million MtCO₂e in 2021.

Cenovus Energy Inc.

Known for its oil sands and conventional oil operations, Cenovus has significant emissions, especially from its steam-assisted gravity drainage (SAGD) operations. Cenovus is also part of the Pathways Alliance, focusing on long-term decarbonization.

The company aims to slash GHG emissions to net zero by 2050, with 18.2 million MtCO₂e produced in 2022. 

How Canada’s Emissions Cap Could Redefine Oil & Gas

Canada’s proposed emissions cap for the sector focuses on emissions rather than limiting production. These regulations are informed by discussions with industry, Indigenous communities, provinces, territories, and other stakeholders and are designed to align with achievable technical measures, per the government’s statement. This approach allows for production growth, with Environment and Climate Change Canada projecting a 16% production increase by 2030-2032 from 2019 levels, assuming companies implement decarbonization measures.

The pollution cap will regulate upstream oil and gas facilities—including offshore and liquefied natural gas (LNG) production—which account for roughly 85% of the sector’s emissions. Activities covered include: 

• oil sands extraction and upgrading, 
• conventional oil production, natural gas processing, and 
• LNG production. 

As the world’s 4th-largest oil and 5th-largest gas producer, Canada aims to stay competitive in a decarbonizing global market. With demand for low-pollution fuels expected to grow, the emissions cap is positioned to help Canadian oil and gas producers adapt to shifting global demand while supporting national emissions targets.

As Canada targets a 40-45% emissions reduction below 2005 levels by 2030, it’s clear that the energy sector, which accounts for over a quarter of all emissions, is key to achieving its climate goal. 

Tug of War Over Emissions Limits

The cap on emissions, however, is being criticized by Alberta and the Canadian Association of Petroleum Producers (CAPP), who argue it’s essentially a production cap. They contend the policy could drive up prices, eliminate up to 150,000 jobs, and cost Canada’s economy up to C$1 trillion (US$720 billion). 

Alberta’s opposition reflects broader industry concerns that Canada could become the only major oil and gas-producing country capping emissions. They noted that this could potentially harm the nation’s competitiveness.

Greenpeace Canada’s Keith Stewart expressed that oil companies haven’t invested enough in pollution-reducing measures, underscoring the need for a strict cap. Conversely, Deloitte’s June analysis suggests that the cap may drive companies to cut production rather than adopt costly technologies like CCS, a solution proposed by some as a way to curb emissions without reducing output.

As the debate intensifies, it highlights the tension between ambitious climate policies and economic impacts on the energy sector and provincial economies. The final plan and its reception will be pivotal in shaping Canada’s climate and energy future.

• READ MORE: Canada Invests CA$6.6M to Boost Bioindustrial Innovation and Cut Carbon Emissions

The post Canada’s Emissions Cap for Oil & Gas: Will It Cut Carbon or Curb Production? appeared first on Carbon Credits.

On October 31, ENGIE North America (ENGIE) announced signing a deal to supply 260 MW of renewable energy to Meta from its Sypert Branch solar project in Milam County Texas.

Dave Carroll, Chief Renewables Officer and SVP of ENGIE North America remarked on the announcement,

“We are delighted to announce this agreement to work with Meta by providing renewable power that supports their growth and aligns with their net zero commitments. We are proud that ENGIE’s proven track record in developing, building and operating renewable assets puts us at the forefront of the energy transition and this agreement with Meta recognizes the importance of that track record to our customers.”

Unlocking the Meta-ENGIE Solar Deal

The deal was facilitated through Meta’s Environmental Attributes Purchase Agreement (EAPA) with ENGIE to secure renewable energy from the Sypert Branch solar project in Milam County, Texas. The project is located 70 miles northeast of Austin and just 10 miles from Meta’s Temple data center.

Meta will purchase 100% of the output from the 260 MW facility through this deal. The solar power will help meet its growing energy demands and support its ambitious net-zero goals. Notably, this agreement expands Meta’s renewable energy portfolio to over 12 GW worldwide.

Urvi Parekh, Head of Clean Energy at Meta said,

“We are delighted to be collaborating with ENGIE to make the clean energy transition a reality through projects like Sypert Branch. Since 2020, we have maintained net zero emissions in our global operations – these efforts are supported by relationships such as those with ENGIE who can consistently deliver and operate projects like Sypert Branch to help meet our energy needs.”

Meta’s Path to Net Zero: Leading with Renewable Energy

Meta achieved net zero emissions across its global operations in 2020.

Remarkably, the social media giant slashed emissions by 94% from a 2017 baseline. They achieved this by backing their data centers and offices with 100% renewable energy. Since 2018, these renewable energy efforts have mitigated Meta’s greenhouse gas emissions by over 12.3 million metric tons of CO₂e.

Source: Meta

100% Renewable Energy

Meta’s commitment to renewable energy is evident as it has partnered with the top utilities in the U.S. to integrate renewable energy into their systems. The goal is to benefit the company and its customers.

The tech giant has a portfolio of over 10,000 megawatts (MW) of contracted renewable energy projects. This makes Meta one of the largest corporate buyers of renewable energy worldwide. 

Earlier CarbonCredits reported:

• In the U.S., Meta boasts the largest operating portfolio, with more than 5,500 MW of renewable energy capacity currently online. Meta’s renewable energy projects represent an estimated $14.2 billion in capital investment for new infrastructure. 

Meta’s sustainability report further explains that it carefully selects projects on local grids near its data centers to help communities transition to clean energy. For centers in states like Virginia, Oregon, and New Mexico, Meta partners with utilities to establish “green tariffs.” This helps achieve 100% renewable energy within each utility’s territory.

• RELATED: Meta’s Bold Bet on Geothermal Energy and Carbon Footprint Reduction

Sypert Branch Solar Project: Boosting Economic and Community Growth

ENGIE developed the Sypert Branch solar project and will also construct and operate it by the end of 2025. The press release also highlighted that this deal brings ENGIE closer to its goal of nearly 1 GW in signed corporate PPAs in the U.S. in 2024 alone.

As a leading global renewable energy provider, ENGIE is widely recognized for its success in selling corporate energy PPAs. Overall, this project will add to Engie’s impressive renewable portfolio of 8 GW across North America, including solar, wind, and battery storage.

Furthermore, the Sypert Branch project is expected to transform the Milam County economy. The construction process itself can imbibe more than 300 workers and generate $69 million in tax revenue throughout the project timeline. ENGIE also noted that a significant part of this revenue will go toward developing schools in the district to support the local community.

• FURTHER READING: Engie Buys 5 Million Tons of Nature-Based Carbon Credits for Net Zero

The post ENGIE Powers Up Meta: New 260 MW Solar Deal Fuels Net-Zero Goals appeared first on Carbon Credits.

As climate change worsens, the UN’s 29th annual climate conference, a.k.a. COP29, taking place from November 11 to 22, 2024, in Baku, Azerbaijan, is a crucial chance to boost global efforts to tackle this problem. With the world experiencing severe weather events and record-high emissions, the summit will focus on vital topics like climate funding, national goals, and ways to deal with climate damage.

Nearly 200 countries will gather, and what happens here will shape international climate policies for years to come. Let’s break down all the important details you should know about this crucial climate talk. 

What Are the Main Goals of COP29?

COP29 is expected to be a major event for climate discussions, focusing on improving financial support for developing countries, increasing transparency, and setting strong climate goals. The summit aims to bring countries together to speed up the implementation of the Paris Agreement while tackling the intensifying impacts of climate change due to rising greenhouse gas (GHG) emissions.

Global Carbon Emissions in 2023

How Will Climate Funding Be Discussed at COP29?

Known as the “Finance COP,” COP29 will review climate funding for the first time in 15 years. The goal is to create a new target (NCQG) to replace the old goal of raising $100 billion annually by 2020, set during the 2009 Copenhagen Conference. 

• READ MORE about the previous COP here.

This new goal is important for helping vulnerable countries invest in clean energy and build resilience against climate impacts.

Negotiators will discuss key questions, like how much funding is needed, the timeline for achieving this goal, and what types of financial help are required. Initial talks suggest that the new goal could involve a mix of public and private funding sources. This creates a broad approach to climate finance.

A stronger climate funding goal will be vital for countries to enhance their climate commitments and create effective strategies. For instance, nations like India and Indonesia have stated that they need significant financial resources to meet their climate targets while still promoting economic growth.

Setting up reliable funding mechanisms will help build trust among nations, encouraging cooperation and dedication to global climate efforts.

What New Climate Goals Can We Expect at COP29?

Another important part of COP29 will be the expected announcements of new Nationally Determined Contributions (NDCs) ahead of the 2025 deadline. These contributions are essential for global efforts to fight climate change under the Paris Agreement. Major polluters, like Brazil, the UK, and the UAE, are likely to announce stronger goals for reducing GHG emissions.

Next-generation NDCs must set clear, ambitious targets for 2030 and 2035, which are critical for keeping global temperature rise within the 1.5 degrees Celsius limit. These commitments should include specific emissions reductions for different sectors, and guiding policies across energy, transportation, and agriculture. 

Clearly communicating these targets will also signal to investors the direction of climate finance, influencing funding toward low-carbon projects.

For example, the European Union plans to increase its climate ambitions, aiming for a 55% reduction in emissions by 2030. Similarly, the United States is expected to reaffirm its goal of achieving net-zero emissions by 2050, promoting significant investments in renewable energy and technological innovation.

How Will COP29 Address Loss and Damage?

As the climate crisis grows, some impacts go beyond what vulnerable countries can adapt to, making funding for “loss and damage” urgent. 

At COP28 in Dubai last year, the Fund for Responding to Loss and Damage was created to support developing nations hit by climate disasters. However, only $700 million has been pledged so far. That’s far less than the estimated $580 billion in damages vulnerable countries may face by 2030.

At COP29, developed nations are called upon to announce additional contributions to close this funding gap, ensuring that support reaches communities most affected by climate change. This funding is crucial for addressing immediate needs, such as rebuilding infrastructure and providing disaster relief, as well as long-term investments in resilience and adaptation.

For instance, countries like Pakistan and Bangladesh, which have faced severe floods and storms, require substantial international support to recover and strengthen their ability to withstand future climate impacts. Mobilizing resources for loss and damage will help these nations and reinforce the solidarity needed for effective global climate action.

What Is Needed to Close the Adaptation Finance Gap?

Closing the adaptation finance gap, estimated at $194-$366 billion per year, is another key goal for COP29.

Europe, in particular, faces substantial investment needs, requiring €800 billion for energy infrastructure by 2030 to meet its climate goals. By 2050, the region’s total green transition investment will need to reach €2.5 trillion, reflecting the scale of resources essential to achieve a sustainable and climate-resilient future.

Many developing countries are disproportionately affected by climate impacts but often lack the necessary financial resources to implement adaptation strategies. Countries have committed to doubling adaptation finance by 2025 as part of the Glasgow Climate Pact.

Negotiators will work to strengthen the Global Goal on Adaptation (GGA) at COP29 to ensure effective tracking of progress and financing. The GGA aims to enhance resilience and reduce vulnerability to climate impacts globally. 

Countries will be encouraged to share their experiences and best practices in adaptation, promoting a collaborative approach to tackle common challenges.

How Can Carbon Markets Be Used for Climate Action?

The summit will also look at international carbon markets under Article 6 of the Paris Agreement, allowing countries to trade carbon credits. Finalizing the rules for these markets is essential to ensure they help reduce global emissions effectively.

Carbon markets can motivate countries to cut emissions by allowing those with extra credits to sell them to those who need them. However, negotiators must resolve key issues regarding how credits are authorized and ensure environmental safeguards are in place. Clear guidelines on credit accounting and environmental integrity will be crucial for making these markets successful.

Countries like Costa Rica and Chile have already made significant progress in using carbon markets to fund their climate initiatives. Establishing solid carbon pricing mechanisms can drive investment in renewable energy projects and encourage sustainable practices across various sectors.

What Role Will Transparency Play at COP29?

COP29 will be a crucial moment for putting into action the enhanced transparency framework of the Paris Agreement. Countries must submit their first biennial transparency reports detailing their efforts to reduce emissions and their financial support needs. 

The Azerbaijani presidency has started the Baku Global Climate Transparency Platform to help developing countries manage this process. This platform aims to support capacity-building efforts and provide technical help to countries struggling with reporting requirements. 

Transparency is vital for building trust among nations and ensuring accountability in climate actions. By improving transparency, COP29 will create an inclusive environment where all countries can share progress, challenges, and lessons learned.

• READ MORE: Bank Of America Flags Liquidity Challenges in Carbon Markets: Will COP29 Usher in a New Era of Climate Finance?

How Will Non-State Actors Participate in COP29?

Another important part of COP29 will be the involvement of non-state actors, including businesses, civil society organizations, and indigenous groups. Their participation is crucial for driving climate action at local, national, and global levels. 

• The role of private sector investment in financing climate solutions is essential, so engagement from business leaders will be vital in shaping the discussions at COP29.

Events like the Climate Business Forum will give private sector actors platforms to showcase innovative solutions and collaborate with governments. Companies that have made strong climate commitments will be encouraged to share their best practices and engage in dialogues about scaling up their efforts.

How Will COP29 Address Climate Justice and Equity?

A key theme for COP29 will be addressing climate justice and equity. The effects of climate change are not distributed evenly; vulnerable communities often suffer the most from climate-related disasters despite contributing the least to greenhouse gas emissions. 

The summit must highlight the importance of fair climate action that prioritizes the needs of marginalized populations.

Discussions will likely focus on ensuring that climate funding reaches those most affected by climate change, including women, youth, and indigenous peoples. Involving these communities in decision-making will be vital for creating solutions that are effective and culturally relevant.

Can COP29 Create a Historic Opportunity for Climate Action?

COP29 presents a unique chance to raise global climate ambition and secure essential funding for sustainable development. A strong financial outcome will empower vulnerable nations to pursue low-carbon strategies while enhancing resilience to climate threats. 

The success of COP29 will rely on negotiators’ ability to overcome political divisions and prioritize the urgent need for climate action. By establishing a new climate finance goal, strengthening national commitments, addressing loss and damage, and improving transparency, COP29 can ignite meaningful progress in the global fight against climate change.

As the summit approaches, the world watches with hope and expectation, eager for this gathering of nations to produce the concrete actions and commitments needed to prevent the worst effects of climate change.

The post What is COP29 and Why Is It Hailed as The “Finance COP”? appeared first on Carbon Credits.