Boosting Carbon Dioxide Removal (CDR) is crucial alongside rapidly cutting emissions to meet the Paris Agreement’s climate targets. A detailed report, analyzing the industry’s various key aspects, looks at the current state of the CDR. 

The authors found that there’s a big difference between what countries plan to do and what’s needed to meet the global climate goals. 

The report is done by experts in the field of CDR, who are authors of Intergovernmental Panel on Climate Change (IPCC) reports and lead major CDR research projects.

Bridging the Carbon Removal Gap

To keep warming below 2°C, the world needs to remove vast amounts of CO2 from the air. CDR includes ways to capture CO2 and keep it stored in places like soil, oceans, or products. Examples include planting more trees, using certain technologies to capture carbon and storing it. 

RELATED: Carbon Dioxide Removal (CDR) and CCS: A Primer

For the first time, the report estimated the total amount of CDR currently being deployed globally. It found that most current CDR (2 billion tonnes of CO2 a year) comes from traditional methods like planting trees. That translates to 99.9% of virtually all current CDR, primarily through afforestation and reforestation. 

Only a very small fraction – 0.1% or 0.002 GtCO₂/year – comes from new CDR methods, as shown below. Examples of novel CDR are Bioenergy with Carbon Capture and Storage (BECCS), biochar, and Direct Air Carbon Capture and Storage (DACCS).  

But to limit warming to 1.5°C or 2°C, these removal methods and reducing deforestation must increase by a lot in the next few decades. By 2050, land-based removals double in 1.5°C pathways and increase by 50% in 2°C pathways relative to 2020 levels. 

Countries need to work hard to meet these goals by using policies and better land management to amplify these efforts. It’s a big challenge, but it’s essential to tackle climate change.

The “CDR gap” size varies among scenarios based on how the world shapes the global economy toward net zero emissions. But right now, countries have limited plans to increase CDR beyond current levels, creating a significant shortage.

National Commitments vs. Concrete Plans

According to the report, around 120 national governments have a net zero emissions target, implying the use of CDR for residual emissions. However, only a few have actionable plans for developing CDR in their Nationally Determined Contributions (NDCs), particularly for new methods.

The chart above shows that CDR is crucial in scenarios to meet the Paris Agreement’s temperature goal, alongside emission reductions.

Closing the CDR gap, illustrated below, needs rapid growth of novel carbon removal methods. 

RELATED: Scaling the Carbon Removal Industry: The Urgent Push

The analysts suggest that novel CDR grows by a factor of 30 by the decade end and as much as 540 in certain scenarios. That growth goes up to a factor of 1,300 and as much as 4,900 in certain scenarios by 2050.

Innovation in CDR approaches has expanded significantly in recent years. It is evident in >$4 billion of public funds injected into Research, Development and Demonstration (RD&D) on CDR. Moreover, a total of about $200 million was invested in CDR from 2020 to 2022. 

Buyers of CDR credits have also shown growing support for novel methods. CDR purchases soared 437% in the first half of 2023. 

Public discussions about CDR are also increasing, yet awareness about it remains lower compared to other climate change aspects. Studies show that while people support research on CDR, they worry about its large-scale implementation. 

In particular, methods like afforestation, which seem more natural, receive better public perception compared to other CDR approaches. On Twitter, talks about CDR are rising, with most methods garnering positive sentiment, except for BECCS.

The Rising Profile of Carbon Removal

Given the uncertainties surrounding scaling up CDR, emitters can reduce reliance on it by swiftly cutting emissions and using energy more efficiently. 

Scientific scenarios outline various pathways to meet climate goals, suggesting various strategies like reducing fossil fuel use, switching to electric power in most sectors, stopping deforestation, and deploying both traditional and new CDR methods on land. 

Notably, new and innovative startups in the carbon removal sector show a strong dedication to fighting climate change by creating practical solutions to store CO2 in various environments. 

Though there are doubts about how well these methods can be scaled up, the substantial investments going into these projects highlight a growing belief in their crucial role in tackling climate change.

READ MORE: Carbon Removal Startups Are Finding More Places and Funds to Store CO2

The global effort to limit temperature rise requires a robust strategy to close the Carbon Dioxide Removal (CDR) gap. Balancing traditional methods with innovative techniques is essential. Governments and industries must prioritize CDR development alongside emission reductions for a sustainable, low-carbon future.

The post What it Takes to Close the Huge Carbon Removal Gap? appeared first on Carbon Credits.

As this year’s United Nations climate summit, COP28, continues to deliberate the most pressing climate change concerns, we’re sharing the top updates impacting the future of climate finance. Here are the top four highlights that stand out.

Oil and Gas Charter Aims 2050 Zero Methane 

Saudi Arabia’s Aramco and the UAE’s ADNOC, along with 29 other national oil companies, signed a non-binding agreement to target zero methane emissions and end routine flaring by 2030.

Overall, 50 oil and gas companies, which represents 40% of global production, committed to decarbonize their operations by 2050.

While Aramco and ADNOC have announced carbon reduction objectives, these targets don’t include emissions from customer fuel use. Sultan Al Jaber, ADNOC’s CEO and CO28 President, emphasized the need for more action, despite many national oil companies setting net zero emissions 2050 targets.

This initiative, called the Oil and Gas Decarbonization Charter, saw companies like PetroChina, Brazil’s Petrobras, TotalEnergies of France, ExxonMobil of the US, and BP and Shell from Britain signing on. However, unlike COP28 decisions, these commitments are voluntary.

Prepared ahead of COP28, these pledges aim to expedite the energy industry’s decarbonization. Yet, a non-profit representative noted that voluntary commitments from the industry may not be enough to address climate change adequately. What is more crucial is having government policies in place to drive swift and equitable transition away from fossil fuels. 

Canada Aims to Slash Methane Emissions by 75%

Canada has shared a new plan to cut methane pollution from its oil and gas industry by at least 75%. The potent gas contributed about 13% of Canada’s total emissions in 2021. 

The country’s Environment Minister made this announcement on the sidelines of COP28. 

Canada ranks among the top oil producers globally, with most methane emissions coming from oil and gas, agriculture, and waste.

Two years ago, the nation promised to create a plan to significantly lower methane emissions from oil and gas by 2030, aligning with the Global Methane Pledge.

The new draft involves stricter rules for Canada’s oil and gas sector, following global suggestions. It aims to stop routine venting and flaring, which emit methane, and introduce better leak detection methods.

RELATED: Canada Explores Options to Cap Oil and Gas Emissions

The federal government estimates that these new regulations will reduce emissions by 217 million metric tonnes of CO2e from 2027 to 2040. The government also plans to invest $30 million in a Methane Centre of Excellence. 

The proposed regulations also include third-party inspections and safety exemptions. However, Alberta and Saskatchewan, provinces rich in oil and gas, criticized the plan, calling it too costly and challenging. They argue that the federal government is intruding on provincial control.

The draft regulations will roll out in 2027, but opposition from the provinces may lead to further discussions and revisions.

Bhutan is The First National Registry Under CAD Trust 

The Kingdom of Bhutan has become the inaugural national registry to achieve full integration with the Climate Action Data Trust (CAD Trust) Metadata Layer, marking a significant milestone announced at COP28. 

This development positions Bhutan as a leader in regional climate action and aligns with the Paris Agreement’s Article 6 objectives.

Launched in December 2022, CAD Trust is an initiative led by the World Bank, the International Emissions Trading Association (IETA), and the Government of Singapore. It operates as a decentralized blockchain-based platform, aiming to promote transparent carbon market accounting, in accordance with the Paris Agreement.

READ MORE: Climate Action Data Trust Launched

Bhutan, known for its vast forests occupying over 72% of its land, holds a pivotal role as a ‘carbon bank’. The country contributes to global biodiversity and carbon sequestration. 

As the world’s first carbon-negative country, Bhutan’s integration into CAD Trust underscores its commitment to climate mitigation and proactive measures.

This integration ensures Bhutan’s climate mitigation efforts adhere to Article 6 guidelines by leveraging innovative digital infrastructure, including blockchain technology. This is to safeguard the accuracy of carbon credit data and prevent duplication, a critical principle of Article 6.

The development marks the beginning of an expanding network for CAD Trust. The platform will connect with other national and independent carbon market standards over the coming weeks and months.  

Tanzania’s Major Carbon Credit Deal

Tanzania has signed a significant carbon credit deal at COP28 covering 6 national parks across 1.8 million hectares. Parks included are Burigi-Chato, Katavi Plains, Ugalla River, Mkomazi, Gombe Stream, and Mahale Mountains.

The agreement involves Tanzania’s national park agency, Tanapa, and a local company, Carbon Tanzania. The country boasts 48 million hectares of reserved forests, which offers significant opportunities for carbon trading.

In a move coinciding with COP28, the deal aims to trade carbon credits while also preserving and managing the national parks, safeguarding their natural ecosystems and wildlife. This move positions the country as a key player in Africa’s carbon credit market.

Mohammed Enterprises Tanzania Limited, led by businessman Mohammed Dewji, will provide funding for the project. This deal follows an earlier preliminary agreement encompassing 8.1 million hectares in Tanzania, also directed towards carbon credit initiatives. That area represents about 8% of the East African nation’s total land mass.

RELATED: Tanzania Carbon Credit Projects Attract $20B from Companies

However, these deals have faced criticism for their potential impact on local lands and communities, drawing concern about neocolonialism. While developers assert that their projects follow stringent regulations and offer community benefits, critics question the agreements’ true impact.

Despite the criticism, these agreements could see vast land areas dedicated for carbon credit projects across Africa once finalized.

As COP28 unfolds, pivotal strides in carbon credit market and climate finance are apparent, spanning from oil and gas industry pledges to national initiatives and global registry integration. These developments emphasize the imperative role of collaborative efforts and policy implementations in tackling climate change.

The post The Top 4 Important Highlights at COP28 appeared first on Carbon Credits.

Many fail to realize this is not the first energy transition.

Although the media have made it appear as if it’s the first energy transition, it’s not.

For example, the nuclear energy industry development which started in WW2 was a major energy transition. In today’s dollars, half a trillion dollars went into the research and development of nuclear reactors along with uranium mines and fabrication plants that would feed the operating nuclear reactors.

In fact, one of the most fascinating stories of collusion, corruption and cartels happened as America was developing its first energy transition. Amazingly, it almost “destroyed” the nuclear industry.

So, before you think the current Energy Transition has failed (which it is not over and will happen) let’s explain the drama that almost took down the first major Energy Transition in America.

Have you ever heard of the Yellow Cartel?

The Yellow Cartel

Everyone knows about the oil cartel called OPEC. But did you know that in the 1970s, a uranium cartel was conspired by one of the largest mining companies in the world and the Canadian government?

From 1955 through 1970 hundreds of billions of dollars were being committed by the US, France, Sweden, Japan and West Germany to build nuclear power plants. The Yellow Cartel started in 1971 with the London based mining giant, Rio Tinto approaching the Canadian government concerning the formation of a cartel for controlling uranium market pricing.

The first official meeting occurred in February 1972, in Paris, and the International Uranium Cartel was created.

Eventually, 29 producing companies would become members of the International Uranium Cartel, which was nicknamed the ‘Yellow Cartel” for the color of yellowcake that the cartel was colluding to price fix.

Rio Tinto, Uranerz (the large German uranium producer in the 70s), the Canadian Government and ultimately a total 29 uranium producers made up the Uranium Cartel.

The Uranium Cartel was successful in increasing the price of uranium almost 10-fold in a few short years by deploying illegal tactics such as price fixing schemes.

Later, the Canadian government would form two uranium entities which would lead to the creation of Cameco, a top 5 uranium producer worldwide.

There were two real catalysts that caused the formation of the International Uranium Cartel. But why did Rio Tinto pitch this plan that almost would turn the energy world upside down and risk America’s energy security and the first major energy transition?

The first catalyst was the move by the US government to place an embargo on all foreign uranium in 1964 to protect its own uranium mines.

At that time, the United States consumed about 70% of the global uranium production (for both its military and energy needs) and with that demand for uranium now gone outside the USA, the price of uranium crashed to $5 per pound in 1970.

But because the price of uranium was so high during the 1950s and first half of the 1960s, significant amounts of risk capital was spent on exploration for new uranium deposits globally. As a result of all this new uranium exploration was major uranium discoveries were made in places like Niger and Australia.

By the late 1960s significant uranium deposits would be discovered in Australia such as Jabiluka 1 & 2.

Eventually the massive discovery of Olympic Dam which would become one of the largest polymetallic mines (including uranium) in the world. Olympic Dam would soon replace the depleting uranium from the Rum Jungle Mine in Australia which was producing uranium since 1954 and was shut down for good in 1971.

Because of and other events such as those mentioned above, by 1971, there was over 220 Million pounds of global uranium production and only 55 Million pounds of uranium global demand. The uranium market was oversupplied by 400%.

Because of both the US embargo on foreign supplies of uranium and an oversupply of uranium production to demand by 400%, the price of uranium was hovering around $5/pound in 1971.

But because of the price fixing tactics of the Uranium Cartel, the price of uranium surged to $40/pound.

The move in uranium prices brought down the world’s largest nuclear reactor builder in the world, Westinghouse Electric Corp. on September 8, 1975.

Westinghouse was able to become the world’s largest developer and installer of nuclear reactors because it had the best track record, nuclear technology and most importantly it promised a long-term supply of uranium feed to power the Westinghouse PWR reactors. A dream trifecta for large utilities and government entities alike.

To put things in perspective, half of the world’s current operating nuclear power plants are using the basis of Westinghouse’s PWR reactor technology. Between 1960 and 1970, Westinghouse was able to secure US government backed utility contracts (and same in Sweeden) worth tens of billions of dollars because Westinghouse committed to supply 65 million pounds to the American and Swedish nuclear reactors with a fixed price contract.

But things quickly turned very bad for Westinghouse. The utilities, citizens and the American Government. Because the price of uranium increased 10X (1000%) from when Westinghouse signed those fixed price utility contracts, on September 8th, 1975 Westinghouse announced that it would not honor the 65 million pounds of uranium it committed to the American and Swedish utilities.

It was revealed in legal documents that the American consumer ended up paying billions of dollars in additional electricity costs due to the Uranium Cartels actions. In fact, New York state alone paid over $1Billion in electricity prices shortly after the Yellow Cartel activities.

On October 15, 1976, Westinghouse took matters into its own hands. It filed for conspiracy, in violation of United States anti-trust laws against the 29 producing uranium companies that made up the International Uranium Cartel estimating damages between $4-6 Billion.

Uranium continued to soar after 1976, surpassing $100 per pound throughout the late seventies.

Around that time, people called for the end of the energy transition citing the negative impact caused by the Uranium Cartel. This was just one of many attacks survived by the uranium industry. In fact, the nuclear sector not only survived the Uranium Cartel fiasco, but Chernobyl, Fukushima and countless other project and sector setbacks over the years.

Right now, we are in the greatest energy transition in human history. Tens of trillions of dollars will be spent worldwide on energy transition and decarbonization. Nuclear is a big part of the solution.

In fact, without uranium, there is no clean, long term base load nuclear power. Which is why we are currently in one of the greatest uranium bull markets of all time.

There are three uranium giants in global uranium production. The largest global producer came out of the fall of the Soviet Union, Kazatomprom. The third largest global uranium producer, as described above, was the result of the Canadian Government merging two state owned enterprises and created Cameco.

But do you know who the second largest producer of uranium globally is?

And the major moves this company is making after almost blowing itself up?

In an upcoming feature article, we will bring to the forefront the under the radar moves that the second largest producer of uranium is doing and how investors can benefit.

The post Has the Energy Transition Failed and is it Over? appeared first on Carbon Credits.

The recently released “State of the Voluntary Carbon Markets 2023” report by Ecosystem Marketplace (EM) reveals a significant trend shift within the VCM. It identifies a concentration of demand toward high-integrity and high-quality voluntary carbon credits, despite their higher price, that offer co-benefits beyond mitigating greenhouse gas emissions.

Analysis of transaction data indicates a substantial 82% surge in average carbon credit prices from 2021 to 2022, accompanied by a decline in overall transaction volumes. These findings imply a market consolidation among smaller yet dedicated purchasers willing to pay more for credits of superior quality. 

Notably, there’s a high demand for nature-based credits that hold certifications for co-benefits and align with Sustainable Development Goals (SDGs).

Here are the key points to particularly note from EM’s research.

5 Key Takeaways From the Report: 

Prices are at their peak, volume is down

The average prices of voluntary carbon credits have reached their highest point in 15 years, while the overall trade volumes have declined from the peak seen in 2021. Even though the volume of voluntary carbon credits traded fell by 51%, the average price per credit surged significantly by 82%. It jumped from $4.04 per ton in 2021 to $7.37 in 2022, which hasn’t been seen since 2008. 

Chart from EM Report
Chart from EM Report

Despite the drop in trade volume and value, this price increase allowed the VCM to remain relatively stable in 2022. In fact, despite dropping ~$0.40/ton, average prices to date in 2023 are still higher than in 15 years. 

Nature-based credits take the biggest market share

Nature-based solutions (NBS) were a primary contributor to the high market value, constituting nearly half of the market share – 46%. NBS credit prices were more than doubled in 2021 and 2022. EM is also seeing more premium for these credits in preliminary 2023 VCM data. 

The average price of credits from nature-based projects, including forestry, land-use, and agriculture projects, witnessed an increase of 75% and 14%, respectively, from 2021 to 2022. 

REDD+ projects dominate the NBS credits, but also include other projects in the Agriculture and Forestry and Land Use categories. These include Sustainable Agriculture Land Management Afforestation/Reforestation/Revegetation (ARR), Agroforestry, Improved Forest Management (IFM), and Blue Carbon (mangroves, seagrasses).

Agriculture project credits, also called agricultural carbon credits, also experienced a substantial surge in volume, rising by 283%.

Credits with co-benefits are pricier

Credits associated with robust environmental and social co-benefits, extending beyond carbon, commanded a significant price premium. Projects with at least one co-benefit certification had a 78% price premium compared to those lacking such certification. 

According to experts surveyed by Ecosystem Marketplace, these certifications are becoming increasingly necessary for buyers actively looking for these projects. Moreover, projects aligned with the UN SDGs demonstrated a considerable price premium, 86% higher than projects not linked to SDGs. This indicates a strong buyer preference for credits that contribute more to societal and environmental well-being. 

RELATED: Carbon Credits and the Sustainable Development Goals

Buyers prefer newer credits

Newer carbon credits are commanding a higher price, suggesting that voluntary buyers are inclined towards recent vintages featuring more robust methodologies. EM reporters also suggested that these buyers prefer credits closely aligning with their current emissions years. 

In 2022, there was a 57% premium for credits with a more recent vintage, reflecting recent emissions reduction activities, compared to a 38% recency premium observed in 2021. This comparison used a historical 5-year rolling cutoff date from the transaction year.

CORSIA-eligible credits surge

Credits eligible under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) experienced a significant surge in market value, marked by a 126% increase in price. The notable growth of CORSIA in the VCM in 2022 indicates an expanding relationship between compliance markets and the VCM. This is crucial for market participants due to several factors:

The quality criteria outlined by CORSIA have been adopted by the Voluntary Carbon Markets Integrity Initiative (VCMI) until the Integrity Council’s core carbon principles are fully established. 
CORSIA will enter its inaugural compliance phase in 2024. 
Countries are beginning to implement Paris Agreement’s Article 6, further emphasizing the relevance of CORSIA in broader carbon markets.

A Shift Towards Integrity and Quality

The latest report by Ecosystem Marketplace delves into self-reported transaction data from >160 participants in their annual market survey. These contributors represent credits sourced from 1,530 projects across over 130 project types traded globally. 

Typically, respondents encompass project developers, investors, and intermediaries. Moreover, data regarding project registrations, credit issuances, and retirements were collated from project registries, adding depth to the comprehensive analysis presented in the report.

Stephen Donofrio, Managing Director of Ecosystem Marketplace, highlighted the pivotal moment witnessed in the VCM, noting that:

“While the data do not show the same type of growth by volume present in previous reports, our market analysis shows a critical, increased shift in market behavior towards integrity and quality.”

READ MORE: Real Voluntary Carbon Market Value is $2 Billion

Donofrio further emphasized the evolving sophistication of credit buyers, underscoring their eagerness to understand the actual impact of their investments.

EM’s full report is available for download here.

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