In the lead-up to COP29, several major announcements on carbon markets are anticipated. These will likely include updates on Article 6 cooperation, enhanced compliance mechanisms, and new developments in voluntary carbon markets (VCM).

A report by the Allied Offsets on carbon markets outlines the evolving landscape and its implications for companies and policymakers. Here are our major takeaways from the report. 

What is Article 6 All About?

Article 6 of the Paris Agreement allows countries to meet their climate targets by working together through carbon markets (Articles 6.2 and 6.4) and other non-market approaches (Article 6.8). 

Article 6.2 facilitates international cooperative approaches, with 91 agreements currently in progress. Leading nations like Japan, Singapore, and Switzerland have spearheaded these efforts, with many deals at either the Memorandum of Understanding (MOU) stage (61%) or finalized bilateral agreements (22%).

• Among host countries, Cambodia is at the forefront, with the highest emission reductions (56.75 million tons of CO2 equivalent) authorized through various initiatives.

Rwanda has taken unique steps. It mandates that 10% of its mitigation outcomes go to domestic use, 2% contribute to global emissions mitigation, and 5% fund adaptation initiatives. Similarly, Malawi reserves 10% of its outcomes for national use.

The compliance market saw new additions to its eligible credit schemes, including Singapore’s carbon tax and Taiwan’s carbon levy. 

The report highlights the eligibility of voluntary carbon credits in the compliance market. Over 829 million unretired voluntary credits can now be used in 12 different compliance schemes worldwide. Colombia stands out for its market liquidity. Meanwhile, Taiwan and Singapore have set stringent criteria for using international carbon credits domestically.

Singapore’s tax, set at S$25 ($18) per ton for 2024-2025, allows corporations to offset up to 5% of taxable emissions with International Carbon Credits (ICCs). However, the credits must adhere to seven key principles to maintain high environmental standards. 

Taiwan’s Ministry of Environment has laid out foundational regulations for a carbon fee system that permits certain industries to offset up to 5% of emissions using internationally recognized credits.

Navigating Convergence of Voluntary and Compliance Carbon Markets

As of the latest update, there are 348,414,639 eligible carbon credits from 3,343 projects across 11 different schemes in the market that are available for domestic carbon pricing instruments. A significant portion of these credits (17%) and projects (36%) comes from Australia’s Safeguard Mechanism, with 2,339 projects participating. 

Among international market mechanisms, CORSIA-eligible credits have the highest trading activity, involving 119 brokers. In contrast, the highest number of unique brokers for compliance-eligible credits tied to domestic carbon pricing instruments is seen with Taiwan’s carbon levy (57 brokers) and California’s (47 brokers).

The line between voluntary and compliance markets is blurring as an increasing share of voluntary credits are retired for compliance. Presently, 28% of the VCM’s all-time credit retirements have been used for compliance purposes. 

• RELATED: Top Countries for Carbon Credit Investments in 2024: Colombia Ranks 1st
  

Colombia, South Korea, and South Africa are at the forefront of this shift. More entities turn to VCM credits to meet their national and regional emissions targets.

Of the VCM’s 1.6 billion all-time retirements and cancellations, 23% (367 million tons of CO2 equivalent) have been directed toward compliance under national carbon pricing systems. For example, Colombia, South Africa, and parts of Mexico (like Querétaro) are notable users of offsets under national carbon taxes. 

Larger markets such as Brazil, China, and India are integrating carbon offsets into emissions trading systems. Plus, many countries are expected to include carbon removals in these systems starting in 2025.

The U.S. leads in carbon credit cancellations, with over 267 million credits retired within California and Washington’s offset programs. Colombia follows closely with 61 million credits canceled.

South Korea and South Africa have also demonstrated significant activity in compliance offset markets. South Korea’s compliance program (KOP) canceled 20.5 million credits, while South Africa’s Carbon Offset Administration System canceled 15.2 million.

Expanding Role of Compliance-VCM Intermediaries

An increasing number of intermediaries are key in bridging the VCM and compliance markets. Since 2019, there’s been a 137% surge in entities actively involved in credit cancellation or retirement for compliance. South Africa, Colombia, and South Korea leading the trend. 

Companies like Primax Colombia, Chevron, and Biomax in Colombia, are prominent participants in compliance-retired credits. Hu Chems Fine Corp in South Korea, and Sasol and AEL Mining Services in South Africa are also part of the top 25 canceling entities.

Compliance Market Gains Momentum For National Commitments

Interest in Article 6-based cooperation has expanded among nations aiming to fulfill their Nationally Determined Contributions (NDCs). These cooperative approaches enable countries to count cross-border carbon credits toward their climate targets. 

Through initiatives under Articles 6.2 and 6.4, countries and companies alike can partake in carbon reduction activities beyond their borders, accelerating global emissions mitigation.

In 2024, other large countries like Brazil and India made strides in integrating avoidance and reduction credits in emissions trading schemes. This highlights a trend toward including more diverse offset types.

By 2025, countries like Japan, the UK, and the EU are anticipated to focus on incorporating removals. The EU is taking steps through regulations like the Carbon Removals and Carbon Farming Regulation (CRCF).

Ultimately, the report shows that the carbon market landscape is evolving rapidly, shaped by new cooperative agreements and compliance mechanisms. Most notably, it reveals the growing role of voluntary carbon market credits for regulatory compliance purposes. 

• READ MORE: Study: Fortune 500 Companies Using Carbon Credits Are Reducing Their Emissions Faster

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Uranium Royalty Corp. (NASDAQ: UROY, TSX: URC) recently announced the acquisition of a royalty on the Millennium and Cree Extension Uranium Projects located in Saskatchewan, Canada. The company purchased this royalty from a third-party industrial gas firm for $6 million in cash.

Scott Melbye, Chief Executive Officer of Uranium Royalty Corp. stated:

“We are very excited to acquire this significant royalty on the Millennium and Cree Extension Projects. Cameco has previously completed substantial development work on the Millennium project and it remains one of the largest undeveloped projects in Cameco’s portfolio. It represents an important potential contributor to the future global production pipeline. The transaction is another example of our ability to leverage the URC team’s experience and networks to source and execute accretive uranium royalty transactions.”

The Millennium Project

The Millennium Project is an advanced-stage conventional uranium project located 36 km northwest of Cameco’s Key Lake Mill in Saskatchewan, Canada. This project is a joint venture between Cameco and Japan Canada Uranium (JCU). Cameco holds a 69.9% equity share and operates the project.

As one of the largest global suppliers of uranium fuel, Cameco plays a vital role in promoting a clean-energy future. JCU, a Canadian exploration company, focuses on Saskatchewan’s Athabasca Basin and is jointly owned by Uranium Energy Corp. and Denison Mines Corp.

Figure: Location of the Millennium deposit – Source: Cameco Corporation website

The Cree Extension Project

The Cree Extension Project is currently in the exploration stage and is situated 36 kilometers northwest of Cameco’s Key Lake Mill. This project is a joint venture between Cameco, Orano Canada Inc., and JCU. The land is located to the west of Denison’s Wheeler River project and southwest of Cameco’s McArthur River project.

Cameco’s Uranium Revelation

Cameco Corporation, headquartered in Saskatchewan, Canada is the operator of the Millennium and Cree Extension Uranium Projects. The company submitted an Environmental Impact Statement (EIS) in 2009. The EIS outlined plans for the project to produce between 150,000 and 200,000 tons of ore annually, with a potential mine life of 10 years.

They reported that:

The Millennium Project contains an estimated 1.4 million tons of resources at an average grade of 2.39% U3O8. This equates to 75.9 million pounds of U3O8 in the indicated category.
Additionally, it has 0.4 million tonnes at an average grade of 3.19% U3O8, totaling 29.0 million pounds in the inferred category.

However, on May 15, 2014, Cameco decided to withdraw the EIS application due to unfavorable market conditions at that time.

The Millennium and Cree Extension Royalty

The press release revealed that the royalty consists of a 10% net profit interest (NPI) based on an approximate 20.6955% participating interest in the projects. This participating interest was transferred to the current owners in 1992.

In this profit-based arrangement, royalties are calculated from the revenue generated, with deductions allowed for certain expenses, including cumulative development costs. Royalties are only payable after all eligible preproduction expenses are recovered.

By securing royalties on these two projects, URC gains rights to about 12,800 hectares in the Athabasca Basin, which has the world’s top mining areas.

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

The U.S. government is boosting nuclear energy with a $6 billion program from the bipartisan Infrastructure Bill to support plants shifting to clean energy. The Inflation Reduction Act also offers Production Tax Credits that can drive investments to the upgradation of plants.

Nuclear energy is not only one of the safest but also among the most cost-effective and economical ways to achieve the decarbonization target.

Moving on and talking about sustainability, Uranium Royalty Corp. will collaborate with its property manager to measure emissions from its corporate office (Scope 1 and 2) for FY 2023. Additionally, the uranium miner will explore opportunities to co-invest with operators to advance shared sustainability priorities.

CHECK OUT: The Atomic Awakening: Unplugging the Energy Crisis, Fueled by Uranium

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned:

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Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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Microsoft added another feather to its cap with this sustainability commitment. It has partnered with Ebb Carbon to remove up to 350,000 tons of CO2 over the next decade using Ebb Carbon’s Electrochemical Ocean Alkalinity Enhancement (OAE) technology. The entire deal focuses on marine carbon dioxide removal (mCDR), and is believed to be the biggest so far in this space.

Understanding Ebb Carbon’s Flagship OAE Technology

Ebb Carbon, a climate tech start-up focused on marine carbon dioxide removal (mCDR), operates on the philosophy that “the ocean is one of the largest carbon sinks on the planet.”

The company is pioneering a new method for capturing atmospheric carbon and combating ocean acidification, known as Electrochemical Ocean Alkalinity Enhancement (OAE).

Inspired by nature, Ebb Carbon’s solution mirrors how plants absorb CO2. Instead of relying on land-based methods, they target the ocean to capture and store vast amounts of carbon dioxide permanently.

The 3-Step Process

Ocean alkalization is a natural process that occurs over millions of years as rain erodes rocks and carries alkaline molecules to the sea. These molecules help balance the ocean’s chemistry and can absorb CO2 from the air. Ebb’s OAE technology extracts alkalinity directly from seawater using bipolar electrodialysis (BPED) technology.

This technique is highly efficient and occurs in a fraction of the time. The company typically follows three steps which are explained in the diagram below:

Ocean deacidification
Permanent CO2 storage
Additional carbon removal

Regarding the deal, Ben Tarbell, CEO of Ebb Carbon, remarked,

“Microsoft is setting a powerful example with its commitment to becoming carbon negative by 2030 and by using its purchasing power to accelerate the most promising climate solutions. This agreement underscores the potential of Ebb Carbon’s technology to contribute meaningfully to gigaton-scale carbon removal in the years ahead.”

Credible media sources revealed that under the agreement, Ebb Carbon will start with an initial delivery of 1,333 tons of CO2 removals. Microsoft will have the option to secure up to an additional 350,000 tons over the next 10 years.

Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, also highlighted the significant role of the ocean in balancing the carbon cycle and praised Ebb’s OAE technology. He expressed his sentiment by saying,

“Ebb has developed technology to leverage the natural attributes of the ocean—its massive surface area and natural processes that already pull CO2 from the atmosphere—to durably remove and store large volumes of atmospheric carbon. We are pleased to collaborate with Ebb to accelerate the scientific foundation for ocean-based carbon dioxide removal and explore the potential of ocean-based carbon removal solutions at scale.”

SEE MORE: Equatic Reveals First-of-a-Kind Ocean CO2 Removal Tech, Inks Deal with Boeing

Advancing Oceanic Carbon Removal through Partnerships

Significantly, Ebb Carbon runs a 100-ton-per-year ocean carbon removal system at the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL) in Sequim, Washington. This project, in partnership with public, private, academic, and philanthropic organizations, aims to advance ocean CDR and promote safe, science-based practices.

The company is also partnering with the National Oceanic and Atmospheric Administration (NOAA) and the University of Washington. They focus on researching various carbon removal models to understand local impacts on carbon and acidification, as well as their effects on marine life such as oysters and eelgrass. Subsequently, they publish their findings to enhance transparency and public understanding.

Leveraging Isometric Protocol for Reliable CO2 Removal

Microsoft and Ebb will use Isometric’s Ocean Alkalinity Enhancement (OAE) protocol to verify carbon removal. Stacy Kauk, P.Eng., Chief Science Officer at Isometric, confirmed this.

She also stated,

“OAE is promising because of the vast surface area of the ocean. This same fact requires careful monitoring, reporting, and verification (MRV). Isometric’s protocol requires measurements and the use of internationally recognized ocean models to quantify carbon removal so buyers and suppliers can be sure one credit equals one tonne of carbon dioxide removed from the atmosphere. This is another step towards creating trust and transparency in carbon markets.”

Notably, Isometric’s OAE protocol is the world’s first protocol for this kind of carbon removal. It outlines how OAE can be carefully monitored, reported, and verified (MRV). This ensures that buyers can confidently purchase OAE carbon credits, knowing they meet high standards.

Microsoft’s Commitment to Carbon Removal Solutions

Apart from reducing direct operational emissions, investing in carbon removal is one of Microsoft’s key sustainability initiatives.

Microsoft’s latest sustainability report revealed that last year the company contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years.

Source: Microsoft sustainability report

For example, Microsoft recently partnered with UNDO to permanently remove 15,000 tons of CO2 from the atmosphere through enhanced rock weathering. Additionally, Direct Air Capture firm 1PointFive has also teamed up with Microsoft to remove 500,000 metric tons of carbon dioxide from the atmosphere.

In 2023, Scope 1 and 2 emissions decreased by 6.3% from the 2020 baseline. However, indirect emissions (Scope 3) increased by 30.9%, resulting in a 29.1% overall rise in emissions across all scopes since 2020.

Microsoft’s commitment to carbon reduction remains a top priority not only for itself but also for a greener planet at large. This partnership with Ebb Carbon is just another example of utilizing the vast potential of the ocean. No wonder it’s a groundbreaking step in oceanic carbon dioxide removal.

FURTHER READING: Ørsted Secures Major Carbon Removal Deal with Microsoft 

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Li-FT Power Ltd. (TSXV: LIFT) has announced a strategic, non-brokered private placement to raise around $21.25 million. The mineral exploration company focuses on the acquisition, exploration, and development of lithium pegmatite projects in Canada. 

Li-FT Power’s flagship project is the Yellowknife Lithium Project (YLP) in the Northwest Territories. Moreover, the company holds 3 early-stage exploration properties in Quebec, and the Cali Project in the Northwest Territories, which is part of the Little Nahanni pegmatite group.

Strategic Investment: A Boost for Canadian Lithium Projects

The lithium company’s newly announced private placement includes:

Flow-Through Shares: 2,694,895 shares priced at $5.6575 each.
Hard-Dollar Shares: 1,645,000 shares priced at $3.65 each.

This investment will be made by a single purchaser, who already holds 363,918 shares of Li-FT. Upon closing, the purchaser will own a total of 4,703,813 shares, equivalent to a 9.99% stake in the company.

As part of this strategic investment, Li-FT and the purchaser will negotiate an investor rights agreement, including customary terms.

Use of Funds:

Proceeds from the hard-dollar shares will support the development of Li-FT’s Canadian projects and general corporate purposes.
Funds from the flow-through shares will be allocated to Canadian exploration expenses, specifically for the company’s Northwest Territories projects. These expenditures qualify as flow-through critical-mineral mining expenses under Canadian tax laws, and all such costs will be renounced to subscribers by December 31, 2024.

The transaction is expected to close on or before November 12, 2024, subject to certain conditions. These include the completion of agreements with the purchaser and approval from the TSX Venture Exchange. 

Shares issued will have a hold period of four months and one day, as per Canadian securities regulations. Canaccord Genuity served as a financial advisor to Li-FT in this strategic investment.

Flagship Project and Other Strategic Ventures

In September, Li-FT Power expanded its Cali Project in the Northwest Territories, quadrupling its land position by adding 9,681 hectares. This move follows amendments to the Sahtú Land Use Plan, allowing the company to secure new claims, including spodumene pegmatite deposits that extend the existing Cali dyke swarm. 

SEE MORE: Li-FT Quadruples Cali Property Through Staking, Boosts Lithium Prospects

The company’s 2023 exploration revealed substantial lithium prospects at Cali. Field visits and surface exploration identified a larger-than-expected dyke system. Out of 163 samples, 124 had lithium grades above 1.0% Li₂O, prompting further drilling plans. 

CEO Francis MacDonald noted that the low-cost acquisition strategy enhances the project’s lithium potential. Moreover, Li-FT terminated its Shorty West claim agreement with Infinity Stone Ventures Corp.

Li-FT is committed to advancing multiple lithium projects in Canada, including the YLP and other early-stage sites in Quebec.

Earlier this month, the lithium company revealed its maiden mineral resource estimate (MRE) for the YLP in the Northwest Territories, Canada. This estimate solidifies the YLP as a significant spodumene resource, ranking it among the top 10 in the Americas and the third-largest hard-rock lithium deposit in Canada. 

The initial MRE reveals 50.4 million tonnes with 1.00% lithium oxide (Li₂O), translating to 1.25 million tonnes of lithium carbonate equivalent (LCE). The estimate covers 8 of the 13 spodumene-bearing dykes on the property. It has the potential for further resource growth as drilling continues. 

The project’s strategic location offers infrastructure advantages, including proximity to highways and railways, enhancing logistics for potential future exports. The company plans a Preliminary Economic Assessment (PEA) by Q2 2025, which will assess the project’s viability. The goal is to establish the Yellowknife Lithium Project as a major player in the North American lithium supply. 

READ MORE: Li-FT Power Reveals Initial Mineral Resource of 50.4 Million Tonnes at Yellowknife Lithium Project

The recent private placement is yet another milestone for Li-FT Power’s growth strategy, enhancing its position in the growing lithium market.

Disclosure: Owners, members, directors and employees of carboncredits.com have/may have stock or option position in any of the companies mentioned: LIFT

Carboncredits.com receives compensation for this publication and has a business relationship with any company whose stock(s) is/are mentioned in this article

Additional disclosure: This communication serves the sole purpose of adding value to the research process and is for information only. Please do your own due diligence. Every investment in securities mentioned in publications of carboncredits.com involve risks which could lead to a total loss of the invested capital.

Please read our Full RISKS and DISCLOSURE here.

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