Article 6.2 at COP29: Singapore Partners with Gold Standard and Verra to Advance Climate Action

/in /by

COP29 ARTICLE 6.2

Singapore’s National Climate Change Secretariat (NCCS) is working with two major carbon credit programs, Gold Standard and Verra’s Verified Carbon Standard (VCS). Their goal is to create a new protocol that will help countries meet their climate targets under Article 6.2 of the Paris Agreement. The newly formed Article 6.2 Crediting Protocol will simplify global efforts to cut emissions and promote sustainable growth.

Over the past year, NCCS, Gold Standard, and Verra have worked closely with governments and climate experts to shape initial recommendations. They plan to finalize the Protocol after COP29 and begin implementation in 2025, giving countries a practical tool to reach their climate goals through strong international cooperation.

Benedict Chia, Director-General (Climate Change), NCCS, Singapore, said,

“It is important to have a protocol that facilitates Article 6.2 cooperation between independent crediting programs and governments. This would ensure that Article 6.2 can operate efficiently.”

Article 6.2: A Pathway to Global Climate Cooperation

Broadly speaking, Article 6.2 of the Paris Agreement helps countries achieve their Nationally Determined Contributions (NDCs) and advance sustainable development. It further leverages governments and private sectors to work together through carbon credit markets to reach their climate goals.

With established carbon crediting programs provided by Gold Standard and Verra, governments can certify emission reductions and removals without creating new standards from scratch. This reduces complexity and ensures quantified results.

Subsequently, this collaboration will also serve a similar purpose in reducing climate efforts and allowing countries to focus on impactful actions.

Margaret Kim, CEO of Gold Standard, expressed her opinion in the following statement,

“If a market is to be trusted, it must be built on solid foundations. For Article 6 to be reliable and efficient, governments and standards need to work together. These initial recommendations outline how, by doing so, they can deliver impact for both the climate and sustainable development.”

Mandy Rambharos, CEO of Verra noted, 

“Independent crediting programs offer comprehensive standards and verification mechanisms that are primed and ready for use by governments in their cooperation under Article 6. The positive reactions we are already receiving from government stakeholders demonstrate how independent standards, that have grown up in the voluntary carbon market, have built a robust and credible foundation that can seamlessly integrate into the infrastructure of compliance markets and Article 6. Together, we can enable these new markets to be operational and effective much more quickly than otherwise possible.”

Collaborative Efforts to Shape Initial Recommendations

The NCCS, Gold Standard, and Verra officially announced their partnership at COP28 in December 2023 with a shared ambition, as described above. They have been working with governments and climate experts to develop the initial recommendations for this protocol.

Without this unified approach, countries might take the risk of inconsistent paths, which could slow down or complicate international cooperation under Article 6.2.

The initial recommendations or insights will outline key ideas and steps that will shape the Protocol. However, they expect to release the final version only after COP29, containing the outcomes of the summit.

Furthermore, the three organizations will continue to engage and seek feedback from stakeholders when developing the final Protocol. This is to ensure that it can serve as a “practical enabler” and complement Article 6.2 rules that are adopted within the United Nations Framework Convention on Climate Change (UNFCCC).

Additionally, the report calls on governments to take steps to limit regulatory and market risk associated with Article 6.2 transactions. For example, by adopting tools like robust templates for Letters of Authorization.

The final protocol will be ready for implementation in 2025.

Key Components and Timelines for the Article 6.2 Playbook

Image: Snapshot of Article 6.2 Crediting Protocol 2024

article 6.2

Source: Verra

COP29 Milestone – November 2024

At COP29, stakeholders will introduce the initial recommendations for the Article 6.2 Crediting Protocol. These guidelines will offer insights on how to harmonize Article 6.2’s implementation across Independent Carbon Programs (ICPs). The focus will be on providing clear guidance for countries, ICPs, and other involved entities to ensure streamlined and effective climate action.

Starting 2025 – Protocol Development and Implementation

From 2025 onward, the development of the full Article 6.2 Crediting Protocol will begin. This will include a specialized data protocol aimed at standardizing how ICPs report to countries. These protocols may also include recommendations for additional reporting to guarantee the full traceability of credit transactions, linking them to corresponding adjustments where required, based on outcomes from COP29.

Ongoing Engagement and Outreach

Regular communication and collaboration with countries, ICPs, and other stakeholders will continue. The goal is to build awareness, secure support, and deepen understanding of the Article 6.2 Crediting Protocol’s implementation, ensuring widespread engagement and effective adoption.

Carbon Credits vs. ITMOs: Clear Lines for Effective Climate Reporting

The Protocol establishes a clear distinction between two elements: carbon credits and Internationally Transferred Mitigation Outcomes (ITMOs). Carbon credits represent the direct mitigation results achieved by projects and are recorded on Independent Carbon Program (ICP) registries.

In contrast, ITMOs reflect the accounting implications of these credits under Article 6.2 which are tracked on national registries. This approach allows private investors to engage in credit transactions. At the same time, it ensures governments track these transactions in their Article 6.2 reports and helps countries meet their Nationally Determined Contributions (NDCs).

We have read in our previous article about COP29 making a breakthrough in global climate action during its opening day. Nearly 200 governments agreed on a framework under Article 6.4 of the Paris Agreement, backed by the UN to create a stronger demand for carbon credits, especially to fund climate projects in developing nations.

For this case, let’s wait and watch how Article 6.2 unfolds at COP29 to meet the unified goal of Singapore’s National Climate Change Secretariat (NCCS), Gold Standard, and Verra.

Source: Singapore, Gold Standard and Verra Release Initial Recommendations Outlining Progress in the Development of a Carbon Crediting Protocol to Implement Article 6.2 – Verra

The post Article 6.2 at COP29: Singapore Partners with Gold Standard and Verra to Advance Climate Action appeared first on Carbon Credits.

Freeland Confirms $2.5 Billion Small Business Carbon Rebate Will Be Tax-Free

/in /by

Freeland Confirms $2.5 Billion Small Business Carbon Rebate Will Be Tax-Free

Deputy Prime Minister and Finance Minister Chrystia Freeland announced that the Canada Carbon Rebate for small businesses will not be taxed.

Freeland clarified this in a statement on X, following concerns from the Canadian Federation of Independent Business (CFIB) that the rebate would be considered a taxable benefit.

Freeland’s post reaffirmed the government’s commitment to providing financial relief for small businesses without adding tax burdens.

The CFIB posted on X that the government will tax the long-awaited $2.5 billion carbon tax rebate for small businesses when it’s issued in December.

CFIB President Dan Kelly criticized the move, comparing it to taxing a tax refund. He stated that this undermines claims of the carbon tax being revenue-neutral, as the government will collect significant corporate tax revenue from the rebate.

The Canada Revenue Agency initially assured CFIB that the rebate would be tax-free, similar to the Canada Carbon Rebate for individuals. 

However, the Department of Finance later declared the small business rebate as taxable, considering it “government assistance.” Kelly argued that calling the rebate government assistance is absurd since it merely returns a portion of the taxes small businesses have paid.

CFIB’s Campaign Pays Off

The carbon tax system has long been criticized for its unfairness to small businesses. After initially promising 10% of total carbon tax revenue as rebates in 2019, the government delayed issuing the funds for five years. 

The rebate only materialized after persistent lobbying by CFIB and widespread support from business owners, opposition leaders, and provincial premiers. 

Adding to the frustration, the carbon tax will increase again on April 1, 2025. Meanwhile, future rebates for small businesses will be slashed from 9% to 5% of total revenue. 

In response, CFIB has sent an open letter to Finance Minister Chrystia Freeland, urging the government to reverse course. Kelly noted that:

“It’s clear why 83% of small business owners now oppose the carbon tax. Delaying, taxing, and reducing promised rebates make it evident that the carbon tax should be scrapped entirely.”

Business owners can estimate their rebates and sign CFIB’s petition to abolish the tax using the CFIB’s online calculator.

The Carbon Tax Controversy Continues

The Canada Carbon Rebate (CCR), formerly the Climate Action Incentive Payment (CAIP), is a tax-free payment that helps individuals and families offset the federal carbon price. It includes a base amount, with an extra supplement for those in small or rural communities.

The rebate amount varies by province and is calculated annually based on projected carbon pricing revenue in each province.

The federal carbon price currently increases gasoline costs by about 17.6 cents per liter, but quarterly rebates help Canadians manage these expenses. The chart below outlines the government’s planned annual carbon price hikes, implemented every April 1st.

Canada carbon price rate increase

Canada’s carbon price is currently set at C$65 per tonne and will rise to C$80 per tonne on April 1. After that, it will increase by C$15 annually, reaching C$170 per tonne by 2030. These incremental hikes aim to reduce emissions while generating revenue to support climate initiatives.

The tax-free Canada Carbon Rebate offers some relief for small businesses facing rising carbon costs. However, with future rebates set to decline and carbon taxes increasing, the debate over the system’s fairness and effectiveness remains heated.

The post Freeland Confirms $2.5 Billion Small Business Carbon Rebate Will Be Tax-Free appeared first on Carbon Credits.

Colombia’s Largest Carbon Project Secures $100M Backing from Temasek-Owned GenZero and Trafigura

/in /by

Colombia’s Largest Carbon Project Secures $100M Backing from Temasek-Owned GenZero and Trafigura

GenZero, a decarbonization-focused investment platform owned by Temasek, and global commodities trader Trafigura have committed over $100 million to Brújula Verde, Colombia’s largest nature-based carbon removal project. Located in the Orinoco River Basin, this project aims to restore land degraded by agriculture and wildfires while generating high-integrity carbon removal credits.

Bringing Degraded Lands Back to Life

The planet is losing about 10 million hectares of forest worldwide every single year. The primary reason is to clear land for agriculture and materials like paper. This deforestation, largely concentrated in tropical forests (96%), contributes to 16% of total tree cover loss. 

Notably, deforestation releases nearly 5 billion tons of carbon dioxide annually, accounting for about 10% of global human-made emissions. This is why most nature-based projects are focusing on restoring degraded forests.

tropical primary forest loss 2002-2022
Source: World Resources Institute

In Colombia, 79,256 hectares were deforested in 2023. The South American nation is covered by over 60 million hectares of forests, with 405,000 hectares of planted forests.

The Brújula Verde project focuses on afforestation and reforestation across 30,000 hectares of degraded land, particularly areas previously used for cattle grazing. The initiative will plant 24 million mixed-species trees, with no plans for commercial harvesting. 

  • By restoring the land, the project could sequester over 20 million tonnes of carbon throughout its lifetime.

The project uses advanced technologies such as high-resolution sensors for accurate carbon monitoring and eDNA sampling to track biodiversity. It also assesses the health of local ecosystems, including their biodiversity, water systems, and social impacts.

Expanding the Project’s Scope

Trafigura initially invested in Brújula Verde in 2023, funding the first phase, which reforested 10,000 hectares. This latest investment, supported by GenZero, will double the project’s size and help it issue its first carbon credits by 2025.

Matthew Nelson, Head of Carbon Investments at Trafigura, highlighted the project’s potential to attract institutional investors and deliver environmental and social benefits. He stated that:

“GenZero’s partnership will enhance the scope and impact of Brújula Verde, bringing local employment alongside environmental and biodiversity benefits to the region, whilst producing high integrity nature-based carbon removal credits.”

Trafigura Sustainability and Climate Initiatives

Trafigura is a leading global commodity trading firm, specializing in the trading of oil, refined products, metals, and minerals. The company plays a vital role in connecting producers with consumers through efficient supply chains. In 2023, Trafigura reported revenues exceeding $315 billion, underscoring its significance in global markets.

The global commodity trading giant is actively pursuing ambitious carbon reduction initiatives, aiming to align with global net-zero targets. It targets a 50% reduction in Scope 1 and 2 emissions by 2032 and operational carbon neutrality by 2050.

Trafigura net zero pathway
Trafigura Net Zero Pathway. Source: Trafigura website

 

The company’s emissions reduction strategy also includes reducing its Scope 3 emissions intensity. These targets are complemented by investments in renewable energy projects, such as solar and wind. The company also invests in the development of low-carbon fuels, including green hydrogen and ammonia.

In 2023, Trafigura launched a $2 billion fund to support its energy transition projects. The company is also advancing its emissions trading activities, helping clients offset their carbon footprints by sourcing high-quality carbon credits. Trafigura’s climate action plan underscores its commitment to decarbonizing its supply chain and supporting global sustainability goals​.

The $100 million investment in Colombia’s Brújula Verde project for nature-based carbon removals​ is the company’s most recent initiative. 

Building High-Quality Carbon Markets

The project aims to contribute to the development of robust carbon markets by delivering high-quality, verifiable carbon removal credits. According to Hoon Ling Min, Director of Investments at GenZero, the project’s focus on soil restoration and native species reintegration ensures the production of top-tier carbon credits. He further noted that:

“The Brújula Verde project marks an important effort in restoring one of Colombia’s most biologically diverse areas. It is a unique project which adopts a restoration bridge concept by reconditioning soil health through reforestation, which enables the reintegration of native species gradually.”

GenZero, a wholly-owned subsidiary of Temasek, is committed to accelerating global decarbonization. The platform invests across three key areas:

  • technology-based solutions,
  • nature-based projects, and
  • carbon ecosystem enablers.

GenZero has already deployed capital in impactful initiatives, including investments in Carbon Capture, Utilization, and Storage (CCUS) and nature-based solutions like sustainable forestry.

The company’s key achievements include reducing carbon emissions through clean cookstove projects in Southeast Asia and supporting the New Forests Tropical Asia Forest Fund 2. Together, these efforts contribute to advancing decarbonization by 2030, aligning with global net-zero goals. 

The Brújula Verde project represents a significant step toward addressing climate change by restoring ecosystems and generating carbon credits. With GenZero and Trafigura’s combined investment, the project will deliver environmental, social, and economic benefits to the Orinoco River Basin while advancing the global carbon market.

The post Colombia’s Largest Carbon Project Secures $100M Backing from Temasek-Owned GenZero and Trafigura appeared first on Carbon Credits.

Nornickel’s Big Copper Bet: Will It Disrupt China’s Smelting Power?

/in /by

Nornickel

As reported by Bloomberg, Russia’s largest mining company, Nornickel is negotiating to establish a major copper smelting facility in Fangchenggang, a port city in China’s Guangxi region. The proposed plant will use raw copper concentrate transported from Russia and will have the capacity to refine up to 500,000 tons of copper annually. This project aims to bring the final processing a step closer to China’s vast metal market.

Nornickel’s Push for Joint Ventures in China Amid Western Sanctions

Nornickel is Russia’s leading metals and mining company and the world’s largest high-grade nickel and palladium producer. President, Vladimir Potanin said that the company has been exploring options in copper for joint projects in China since earlier this year.

Strategic ambitions for 2030+ metal production

Nornickel copper

Source: Nornickel

Lately, Western sanctions on Russian commodities have made global trade more difficult. These restrictions limit where and how Russian goods, like metals (aluminum, copper, and nickel) and energy resources, can be sold. As a result, Nornickel has been seeking joint ventures in China since earlier this year even though it is not directly sanctioned by the West.

The mining giant has not disclosed the name of the Chinese partner they are in talks with but they hint at constructing a greenfield plant at the mentioned location.

The smelter project represents a strategic shift for Nornickel, which previously explored partnerships with established Chinese smelters to process Russian concentrate. However, those plans were abandoned in favor of a new, purpose-built facility.

China’s Copper Dominance: Too Much of a Good Thing?

Demand for copper is going high due to renewables, electric vehicles, and grid infrastructure. According to Bloomberg, China’s refined copper output rose by over 5% in 2024 despite certain production curbs. Furthermore, in recent years, the country has rapidly constructed smelters which has led to an increase in its global share for copper.

This burst in capacity is certainly not favorable for the Chinese copper market. Rather it has put tremendous pressure on domestic smelters to slow expansion. This is the outcome of the fierce competition and limited raw materials which have shrunk the profits of the copper industry.

China copper

Source: Bloomberg

Grant Sporre, head of metals and mining research at Bloomberg Intelligence had cautioned that China’s excesses threaten the future of copper refining beyond its borders and operations from Chile to Europe and India could be at risk.

The above analysis is based on the fact that ore supply has intensified as new smelters open in India and Indonesia. India is rapidly building plants to cut down on copper imports and strengthen domestic production. Meanwhile, Indonesia has taken steps to keep its ore resources within the country by curbing exports on which many smelters in Asia rely. This shift forces copper smelters in Asia to secure new sources or risk production slowdowns, further straining the already tight market.

However, interestingly some analysts suggested that state-owned Chinese smelters may handle the market downturn better than global competitors. This is simply because of the cost advantages and more modern facilities the country is equipped with.

Is Nornickel’s Entry A Threat to China’s Copper Giants?

Fangchenggang, where the plant would be built, already has a large smelter with a 600,000-ton capacity and is operated by China’s state-owned Jinchuan Group. On top, this project comes at a time when the country is dealing with an oversupply of copper refining capacity.

As a consequence, Nornickel’s project has met substantial resistance from Chinese copper producers, who feel the extra capacity could harm their domestic output.

China’s refined copper imports from Russia have declined by over one-third year-on-year, totaling about 165,000 tons in the first nine months of 2024. The new smelter, if finalized, would help stabilize the flow of Russian copper into China and offer Nornickel an opportunity to circumvent Western trade restrictions while accessing the world’s largest copper market.

Operational performance

nornickel operational

Source: Nornickel Sustainability Report

Thus, it’s too early to comment on whether Nornickel’s entry will be a boon or a bane for China’s copper market. The study is speculative and the picture will be clear eventually as the mining company reveals more details of their expansion plans.

Data and Content Sources:

  1. Russian Miner Moves Closer to Deal for New Copper Plant in China – Bloomberg
  2. China’s Copper Production Boom Threatens to Crowd Out the Rest of The World – Bloomberg

The post Nornickel’s Big Copper Bet: Will It Disrupt China’s Smelting Power? appeared first on Carbon Credits.

IEA’s 2024 Blueprint: Energy Efficiency is the Key to Emission Reduction

/in /by

energy efficiency

IEA defines energy intensity as the amount of primary energy used to produce a given amount of economic output. It is the key global indicator to track energy efficiency- which is technically the rate of change in primary energy intensity.

At COP28, at least 200 countries pledged to double energy efficiency improvements by 2030. This is because this factor drives the world’s climate goals. Recently, IEA has rolled out its 2024 Energy Efficiency Report which has decoded the significance of energy efficiency with rising energy demands.

Let’s deep dive into this…

Energy Demand Surges with Electrification

A transition to electrification has gained ample significance with electricity’s share in total energy demand rising faster than in previous years. Electrification means shifting from fossil-fuel-powered systems to efficient electric alternatives. And this stands out as a positive force in an otherwise slow year for global energy efficiency.

The demand is further spurred by increased EV sales, industrial growth, and cooling needs, particularly in warmer regions. On the contrary, the demand for gasoline is slowing down in many regions due to the same reasons.

In 2024, the share of electricity in overall energy demand is expected to grow by nearly 2%, double the 1% average growth seen from 2010 to 2019.

Talking about EVs, the market continues to expand. IEA predicts, in 2024 EV sales can reach 17 million if one in five cars is sold worldwide. China remains a dominant player, accounting for about 60% of global EV sales last year. Overall, the EV boom is an example of electrification’s role in improving energy intensity even if overall efficiency progress remains modest.

However, reaching the net zero target by 2050 will require faster and sustained progress.

iea energy efficiency

The Missing Piece in Achieving Net Zero Emissions

Energy efficiency is essential for reducing fossil fuel reliance and cutting emissions. In the IEA’s net zero pathway, ramping up energy efficiency could account for over 70% of the anticipated drop in oil demand and 50% of the reduction in gas demand by 2030. Thus, this energy efficiency is like the missing block that needs to be placed to bridge the net zero pathway.

However, the global efforts to reduce energy intensity are yet to reach targeted levels. In 2024, global energy efficiency progress is projected to improve by just 1%, the same rate as 2023, despite energy demand expected to rise by 2%.

Despite the historic pledge, a significant increase in policy action is necessary to accelerate the process of energy efficiency.

iea ENERGY EFFICIENCY

Energy Efficiency: Advanced Economies Slow in, Emerging Markets Pick Up

Last year advanced economies like the European Union and the United States showed strong improvements in energy intensity. In contrast, China, a long-time leader in energy efficiency gains, saw its energy intensity sharply decline from its decade-long average of 3.8% annual improvements. India’s progress also slowed, posting just 1.5% improvement.

However, in 2024, the momentum has shifted. Advanced economies are seeing slower energy efficiency progress, with the EU expected to improve by only 0.5% and the U.S. by 2.5%.

Meanwhile, emerging markets and developing economies (EMDEs) are starting to pick up the pace. China’s energy intensity is projected to improve by 1.5%, bouncing back from 2023’s decline, while India’s progress has accelerated to around 2.5%. Similar gains are anticipated in Southeast Asia, where energy efficiency initiatives are gaining traction.

As energy demand rises, maintaining efficiency improvements is becoming more challenging. Advanced economies are slowing, while EMDEs are showing modest progress. This shift highlights the need for tailored policies to drive efficiency across diverse regions and economic stages, especially when the world has already set an ambitious energy target.

iea energy efficiency

Flexibility: Eases Grid Strain and Boosts Affordability

Another system-wide theme highlighted by IEA is flexibility across the grid. As renewable energy grows globally, the need for flexibility to balance grids is rising. Traditionally, grids relied on thermal and hydropower for flexibility. But now, demand-side management—such as smart appliances and battery storage, is emerging to provide this flexibility.

Following record growth in renewables in 2023, when nearly 565 GW was added, scaling up flexible, efficient solutions is crucial to manage demand and stabilize prices.

Government Strategies

Governments worldwide are responding. For example, the UK plans to release its Flexibility Markets Strategy by the end of 2024. It will focus on building a flexible market that contracted 4 GW last year. Australia’s New South Wales initiative is adding 1 GW of grid stability projects, and the Netherlands is committing $108 million to support battery storage integration.

Consumer Level Shift

The shift is not just confined to government policies but is also happening at the consumer level. In the UK, the Demand Flexibility Service trial involved 2.6 million households and 8,000 businesses, shifting demand and saving over 3.7 GWh during winter 2023-2024.

In the US and California, several federal initiatives are directed at improving grid flexibility and the growth of EVs. They are looking ahead to achieve this with support for smart heat pumps, dynamic-rate pilot programs, and funding for community-based grid innovation.

Digitization

Digitization plays a vital role in unlocking flexibility. New data-sharing platforms and dynamic tariffs, like Octopus Energy’s real-time rate and EDF’s EV charging scheme, incentivize users to adapt their energy consumption to grid needs. This will ease pressure on the grid and improve affordability. These efforts also highlight the growing integration of renewables, flexibility, and consumer-driven innovations.

iea energy efficiency

In conclusion, IEA predicts that accelerating energy efficiency could cut over a third of global CO2 emissions by 2030, helping achieve net zero by 2050. However, as said before this calls for faster electrification, improvement in technical efficiency, and setting up robust policies.

Disclaimer: Source of data and visuals IEA Energy Efficiency Report 2024

The post IEA’s 2024 Blueprint: Energy Efficiency is the Key to Emission Reduction appeared first on Carbon Credits.

COP29 Breakthrough: UN-Backed Global Carbon Market Takes Shape

/in /by

COP29 Breakthrough: UN-Backed Global Carbon Market Takes Shape

COP29, held in Baku, made a major breakthrough in global climate action during its opening day. Nearly 200 governments agreed on a framework under Article 6.4 of the Paris Agreement. This deal sets up a UN-led global carbon market, allowing countries and companies to trade carbon credits more efficiently. The goal is to create a stronger demand for carbon credits, especially to fund climate projects in developing nations.

COP29 President Mukhtar Babayev called the agreement a “game-changing tool” to support climate action in less wealthy countries. He also urged all nations to continue working together to make more progress during the summit, noting that:

“By matching buyers and sellers efficiently, such markets could reduce the cost of implementing NDCs [Nationally Determined Contributions] by 250 billion dollars a year.”

A New Era for Carbon Trading

Article 6 of the Paris Agreement outlines how countries can work together to reduce greenhouse gas emissions. Article 6.4 introduces a global carbon trading system, managed by a UN body. This system will let countries and companies trade emissions reduction credits generated from projects worldwide.

The new system replaces the older Clean Development Mechanism (CDM) from the Kyoto Protocol. It aims to be more transparent and effective, ensuring that carbon credits are credible and valuable.

In October 2024, Article 6.4 Supervisory Body finalized rules for how projects will work under this system. These include standards for carbon removal projects and emissions reduction methods. The system will let companies in one country earn credits for reducing emissions and sell them to companies in another country, fostering global cooperation.

Challenges and Pushback

Despite the breakthrough, reaching an agreement wasn’t easy. Some countries and groups raised concerns about how decisions were made. The Coalition for Rainforest Nations (CfRN), representing several developing countries, argued that Article 6.4 Supervisory Body bypassed proper procedures.

Kevin Conrad, CfRN’s Executive Director, said the body adopted rules without first getting approval from the Conference of the Parties (CMA), which oversees the Paris Agreement. As a compromise, the final text used softer language, like “take note,” to acknowledge the rules without fully endorsing them. This wording sends a message that future decisions must follow proper processes.

Despite these issues, Babayev assured participants that more discussions on Article 6.4 would continue. Negotiations will also focus on Article 6.2, which deals with how countries trade carbon credits directly.

Strengthening Carbon Markets With New Rules

The new global carbon market aims to solve problems that have plagued carbon trading in the past. Older systems often faced criticism for lacking transparency and effectiveness, which led to low demand and falling prices for carbon credits. 

The chart below shows the quarterly credit retirements, which represent demand, falling and are lower this year than prior years.

quarterly carbon credit retirements Viridios AI
Chart from Viridios AI report

With clear rules and a centralized structure, Article 6.4 hopes to restore confidence in carbon markets. Sebastien Cross, Chief Innovation Officer at BeZero Carbon, called the agreement a major win for COP29. “This framework provides the tools we need to make carbon markets work better,” he said.

The carbon finance sector is optimistic that this move will help revitalize trading. 

The agreement also benefits project developers by giving them clear guidelines to follow. Countries can align their climate policies with international standards, making it easier to meet their emission reduction goals. 

Economic and Environmental Benefits

A global carbon market could bring significant economic and environmental gains. For one, it will provide new funding opportunities for climate projects, especially in developing countries that need financial support.

By creating a market-driven system, Article 6.4 encourages businesses to reduce emissions in cost-effective ways. Companies that reduce more emissions than required can sell their extra credits for profit. Meanwhile, those struggling to meet their targets can buy carbon credits to make up the difference.

This system not only helps cut global emissions but also supports sustainable development in poorer regions. It also allows countries struggling to meet their target by purchasing carbon credits.

What’s Next?

The Article 6.4 framework is just the beginning. The next steps include registering project methodologies and establishing operational guidelines, expected to be in place by mid-2025. During this period, the Supervisory Body will focus on finalizing details to ensure the system operates smoothly.

However, significant work remains to address concerns about market integrity and inclusivity. Some stakeholders worry that a centralized system could disadvantage smaller or less-developed markets. Policymakers must ensure the system is fair and accessible to all participants.

While there are still challenges ahead, this agreement sets the stage for stronger international cooperation. By establishing a UN-backed carbon market, the deal promises to boost demand for carbon credits and direct funding to critical climate projects.

As COP29 continues, leaders will work to refine this system and tackle other important climate issues.

The post COP29 Breakthrough: UN-Backed Global Carbon Market Takes Shape appeared first on Carbon Credits.

U.S. DOE Greenlights Oklo’s First Commercial Nuclear Fission Plant at Idaho

/in /by

nuclear fission

Oklo, the California-based nuclear technology company recently announced that it has received clearance from the U.S. Department of Energy (DOE) and Idaho National Laboratory (INL) to proceed with site characterization for its first commercial fission power plant in Idaho.

The completion of the environmental compliance process is a significant milestone for Oklo as it can now initiate work for its fission power plant.

Jacob DeWitte, CEO and Co-Founder of Oklo noted,

“These approvals represent pivotal steps forward as we advance toward deploying the first commercial advanced fission plant. With this process complete, we can begin site characterization. Our unique business model of selling power directly to customers rather than power plants, combined with our early mover advantage, positions us to respond to a growing order book effectively and meet diverse energy needs across data centers, industrial processes, defense, and off-grid communities.”

Oklo Signed MOA with DOE for its Advanced Fission Power Plant

Oklo is dedicated to delivering clean, reliable, and affordable energy at a large scale. The company secured a site use permit in September through a Memorandum of Agreement with the DOE. This paved the way for its first commercial advanced fission power plant in Idaho, U.S. Interestingly, it’s the only advanced commercial fission company in the U.S. with a DOE site use permit.

The MOA will enable Oklo to conduct key site evaluations, including geotechnical studies, environmental surveys, and infrastructure planning. Additionally, it will also help maintain a schedule, manage costs, and support timely deployment.

On October 15, the company’s press release explained that they had also received DOE approval for its Conceptual Safety Design Report for the Aurora Fuel Fabrication Facility, which will recycle nuclear fuel material at Idaho National Laboratory (INL).

Subsequently, the Aurora Fuel Fabrication Facility will produce fuel for Oklo’s Aurora power plant at the Idaho National Laboratory (INL). It will essentially deploy high assay low enriched uranium recovered from spent Experimental Breeder Reactor-II fuel.

With a secured fuel supply, site use permit, and strong regulatory progress, Oklo is ready to launch its Aurora reactor. Its developed supply chain will further support the first deployment.

Now that the final clearance is approved by both the DOE and INL, CEO Jacob DeWitte is confident in the collaboration. He expects to bring Oklo’s first commercial nuclear fission plant online within the next few years.

From Waste to Power: Oklo’s Aurora Reactor Sets New Standards in Clean Energy

We discovered from World Nuclear News some unique features of the Aurora powerhouse, which are illustrated below:

  • It is a fast neutron reactor that generates electricity by moving heat from its core to a supercritical carbon dioxide power conversion system.
  • Designed to run on either fresh HALEU or recycled nuclear fuel, Oklo’s reactors can transform used nuclear fuel into clean energy.
  • It can generate 15 MWe, scale up to 50 MWe, and operate for over a decade before needing refueling.

The fission pioneer also explained that they use advanced recycling techniques to keep transuranic materials together as fuel. This avoids the need to create pure material streams, which is a unique feature of fast reactors.

________________________________________________________________________

Uranium Royalty Corp.: Powering Decarbonization with Nuclear Efficiency

The only pure-play uranium royalty company is focused on capturing value from uranium price shifts through strategic investments. These include royalties, streams, debt, equity in uranium companies, and even physical uranium holdings. Notably, the company is growing with the rising demand for uranium.

  • IEA revealed that in the U.S. alone, nuclear energy supplied roughly 19% of total electricity in 2022 and accounted for 55% of the nation’s carbon-free electricity.
  • This nuclear output mitigated around 482 MMT of CO₂ emissions, which is equivalent to taking 107 million gasoline-powered vehicles off the roads.

More Power per Punch: Nuclear Energy Outshines Fossil Fuels

carbon credits

________________________________________________________________________

Why Oklo’s Advanced Nuclear Fission is Just One of A Kind

Oklo’s advanced fission powerhouse has unique advantages over traditional power generation technologies. In short clean, resilient, reliable, and affordable are the four features that truly make it one of a kind.  

The reactors produce zero carbon emissions which makes them an environmentally friendly option. Oklo has stressed the fact that the energy density of nuclear fuel is a million times more than fossil fuels, hence it requires less land for mining. This attribute is significant for environmental preservation.

Moreover, unlike coal and gas plants that require frequent refueling, Oklo’s reactors can run for decades on a single load. This is how the nuclear company ensures long-term fuel reliability and independence.

Check out the landscape view of Oklo’s preferred site in Idaho

okloImage Source: Oklo Inc

Talking about the cost-effective factor, the immense energy density of its fuel makes it an economical alternative to fossil fuels. Also, nuclear fuel has fewer resource requirements and lower operational costs.

Most importantly Oklo’s reactors deliver consistent, clean energy, and heat with minimal refueling—sometimes as infrequently as every 20 years. This long-term reliability supports steady power output that’s ideal for critical energy needs.

Thus, starting with Aurora, Oklo is developing unique kinds of next-generation reactors. Furthermore, with the collaboration with DOE and INL, the company is just on the right path to establishing nuclear fission as an abundant, affordable, and clean energy source across the world.

The post U.S. DOE Greenlights Oklo’s First Commercial Nuclear Fission Plant at Idaho appeared first on Carbon Credits.

The G-20’s $1.1 Trillion Fossil-Fuel Subsidy and Carbon Pricing Initiatives

/in /by

The G-20's $1.1 Trillion Fossil-Fuel Subsidy and Carbon Pricing Initiatives

As the world gears up for the upcoming UN climate summit, COP29, in Baku, Azerbaijan, the G-20 governments face the challenge of crafting more ambitious climate plans. These plans must balance bold climate commitments with economic realities like budget constraints, a cost-of-living crisis, and the push for energy independence. The situation is further complicated by recent election outcomes.

However, not all G-20 countries are moving at the same pace. The latest Climate Policy Factbook by BloombergNEF, commissioned by Bloomberg Philanthropies, evaluates G-20 progress in three crucial policy areas:

  • Fossil-fuel subsidies,
  • Carbon pricing, and
  • Climate-risk policies.

Here’s our key takeaways from the report. 

Fossil-Fuel Subsidies Surge Despite Climate Goals

In 2022, G-20 countries provided a staggering $1.1 trillion in fossil-fuel support, the highest in over a decade. This spike was driven by the global energy crisis, as governments aimed to shield consumers from soaring energy costs. 

G-20 fossil-fuel subsidy 2018 - 2023

However, $500 billion of this went to producers and utilities, some of which reported record profits.

Despite global climate goals, the G-20 is expanding its coal power capacity. From 2019 to 2023, coal-fired capacity grew by 3%, adding up to 2 terawatts (TW) of operational capacity, with another 0.6 TW in development. Coal remains the largest contributor to climate change. 

The distribution of fossil-fuel support by type has remained largely unchanged in recent years. Although coal represents a small portion, its share is significant due to the high overall fossil-fuel support in 2022. G-20 governments allocated $49 billion to coal, the most emissions-intensive fuel.

Remarkably, OECD members reduced coal capacity by 22% since 2019. Conversely, non-OECD economies increased their coal capacity by 6%.

Country Progress

Australia is showing improvement by reducing coal-fired capacity and lowering fossil-fuel support in 2022. Meanwhile, China and Japan are labeled as making insufficient progress while Canada and the UK were downgraded to “mixed progress.”

Preliminary 2023 data suggests fossil-fuel subsidies fell to $945 billion, a 19% decrease from 2022 but still above pre-crisis levels. Reforming these subsidies is politically sensitive, as it could raise consumer prices. 

Canada offers a potential pathway by defining and eliminating inefficient fossil-fuel subsidies.

Carbon Pricing Gains Traction, But Is It Enough?

Carbon pricing is becoming more widespread across the bloc. It now account for about 25% of global greenhouse gas emissions and 29% of G-20 emissions through taxes or trading schemes, per BNEF analysis. This share is expected to grow as more programs roll out.

Share of global emissions covered by a carbon price

Currently, 14 G-20 economies, including the EU, have economy-wide carbon pricing mechanisms. Russia and the US have subnational schemes, while South Africa remains the only African Union member with a carbon tax in place.

value of major compliance carbon markets in the G20

While some G-20 countries, like Australia, China, and South Africa, have seen rising carbon prices, others, particularly in Europe, experienced declines. Only the EU’s Emission Trading Scheme (ETS) currently operates within the price range necessary to limit global warming to 2°C by 2030.

Expanding Carbon Markets

Canada, France, Germany, and Mexico lead the pack with multiple national-level carbon taxes or markets. 

Brazil, India, and Turkey are designing compliance carbon markets while Indonesia and Japan are considering additional carbon pricing programs. And all EU members will see another carbon market with the 2027 launch of the road transport and buildings ETS.

Notably, China’s carbon market, the largest globally by covered emissions, is set to expand to aluminum, steel, and cement sectors. The EU ETS leads in traded value, driven by higher prices and trading volumes, whereas Canada and California are on track to meet their targets by the end of the decade.

Carbon Market Valuations

The combined value of G-20 compliance carbon markets exceeded $800 billion in 2023, BNEF Factbook shows. Price increases across these markets stemmed from policy reforms aligning with climate goals, though trading volumes dipped in some due to economic impacts from Russia’s invasion of Ukraine.

As G-20 members strengthen their carbon markets, they create powerful incentives for emission reductions and sector-specific adaptation. As such, they can contribute significantly to the transition toward a low-carbon global economy.

Climate-Risk Policy: Who’s Leading and Who’s Lagging

G-20 members are at varying stages of implementing climate-risk regulations. Some, like the EU, Brazil, and the UK, lead the charge with comprehensive frameworks. 

However, others, including Argentina, Saudi Arabia, and Russia, lag behind, lacking even basic regulations. Other remarkable recent developments in this area include:

  • Turkey and the US made notable strides in climate-risk policy.
  • Nine G-20 countries have adopted or are developing regulations aligned with the International Sustainability Standards Board (ISSB).

The ISSB framework promotes consistency in climate-risk reporting. However, its effectiveness could be undermined by local variations and relatively low stringency.

What COP29 Means for G-20 Climate Action 

The G-20’s progress is uneven, with some countries advancing robust policies while others remain stuck in outdated systems. COP29 presents a crucial opportunity for world leaders to reassess their commitments and bridge these gaps.

Based on BNEF’s Climate Policy Factbook data, to accelerate the transition to a low-carbon economy, countries must:

  • Phase out fossil-fuel subsidies, starting with inefficient ones.
  • Strengthen carbon pricing mechanisms to provide real incentives.
  • Implement stringent climate-risk policies to build a more resilient economy.

Ultimately, meaningful climate action requires global cooperation and bold leadership, particularly from the G-20, which holds the key to the planet’s future.

The post The G-20’s $1.1 Trillion Fossil-Fuel Subsidy and Carbon Pricing Initiatives appeared first on Carbon Credits.

China and Indonesia Bolster Ties with $10B Deal in Strategic Sectors. How will it Impact Indonesia’s Nickel Industry?

/in /by

China and Indonesia partnered for a series of business agreements worth $10 billion during the Indonesia-China Business Forum in Beijing on Sunday. This high-level forum followed a Saturday meeting between China’s President Xi Jinping and Indonesia’s President Prabowo Subianto. Reuters revealed that the leaders expressed their plans for strategic economic growth across sectors like food, clean tech, biotechnology, and pressing issues related to water conservation, maritime resources, and mining, particularly nickel.

Notably President Prabowo Subianto said,

“We must give an example that in this modern age, collaboration — not confrontation — is the way for peace and prosperity.”

The joint statement further explained their plans to expand cooperation across new energy vehicles, lithium batteries, photovoltaic projects, and the digital economy. They also committed to advancing the global energy transition, securing mineral resources, and stabilizing supply chains.

Indonesia Nickel

Indonesia’s Nickel Surge: Fresh Billion-Dollar Deals from China

Indonesia’s nickel industry was a significant topic of discussion during the meeting. The country, which leads global nickel production always has been a major investment hub for Chinese firms.

In this regard, the latest news is that Chinese battery materials producer GEM Co., Ltd striking a groundbreaking deal with Indonesia’s PT Vale to build a high-pressure acid leaching (HPAL) plant in Central Sulawesi. The agreement with a deal value of $1.42 billion, will ensure the nickel plant maintains nickel supplies which is crucial for battery-grade materials.

Moving on, Tsingshan Holding Group and Zhejiang Huayou Cobalt, the two major Chinese companies, continue to dominate Indonesia’s nickel industry. Their investments reflect faith in Indonesia as a prominent supplier of raw materials for EVs, lithium-ion batteries, and other green technologies.

Elaborating this further, Bloomberg reported that Zhejiang Huayou Cobalt Co. is pursuing $2.7 billion in financing for its battery-nickel plant in Indonesia. The financing deal, backed by Ford Motor Co., is being coordinated by HSBC Holdings Plc and Standard Chartered Plc, who are inviting additional banks to participate.

The Pomalaa plant, located in Southeast Sulawesi, will use high-pressure acid leaching (HPAL) technology to produce battery-grade nickel for electric vehicles. Notably, it will have a capacity of 120,000 tons of nickel annually, making it one of Indonesia’s largest HPAL projects. 

Both nations consider the timing of these deals a boon to the slump nickel market. Currently, nickel prices are weak due to low demand in the stainless-steel market and slow growth of the EV sector.

The Ever-Expanding Indonesian Nickel Industry

Indonesia has always attracted foreign investment to boost its domestic nickel production. The country sees this as essential for boosting and adding value to its vast natural resources. Despite these market pressures, Indonesia and China remain committed to their long-term goals, with Indonesia flagging its nickel industry as an integral part of its economic strategy.

As one of the top producers of metallic commodities—including gold, copper, cobalt, and especially nickel—Indonesia produced over half of the world’s mined nickel in 2023. Indonesia’s cost-effective nickel industry spurred major shifts in the nickel market. While nickel prices have dropped since last year, the country still maintained a resilient and steady production.

According to S&P Global Commodity Insights, Indonesia’s mined nickel production is expected to reach 2.1 million metric tons in 2024. This value is more than 50% of the anticipated global output and more than 2X its 2020 levels.

Indonesia Nickel

Source: S&P Global Commodity Insights

However, the rapid increase could eventually result in a global supply shortage, pushing prices back up to $28,000 per metric ton.

New Ventures in Tech, Travel, and Trade

China and Indonesia are not limiting their partnerships to the resources sector. Credible media agencies reported that GoTo Gojek Tokopedia, a prominent Indonesian technology company, signed agreements with China’s Tencent and Alibaba to bolster Indonesia’s digital infrastructure.

These partnerships can advance cloud services and foster local digital talent. It also signals a long-term investment in Indonesia’s digital economy and improving digital literacy and infrastructure at large.

Notably, President Subianto envisions transforming Indonesia’s tech landscape with investments in the most advanced sectors like AI and cloud computing.

Reuters reported, in addition to high-level industry deals, China and Indonesia agreed to streamline travel and visa policies, introducing measures like multi-entry long-term visas. This will enable more bilateral exchanges, business trips, and tourism.

Furthermore, the nations also agreed to deepen trade in agricultural products, including fresh coconuts. Interestingly, President Subianto also secured export agreements during his visit. This expansion of agricultural exports creates new opportunities for Indonesian farmers while fulfilling China’s demand for tropical produce.

Overall, it is evident that President Subianto’s decision to choose China as its first state visit shows the nation’s strong intention to deepen ties with Beijing.

Source: China, Indonesia seal $10 billion in deals focused on green energy and tech | Reuters

The post China and Indonesia Bolster Ties with $10B Deal in Strategic Sectors. How will it Impact Indonesia’s Nickel Industry? appeared first on Carbon Credits.