Carbon Credits and Article 6 in 2024. What to expect, according to MSCI (Trove), IETA and A6IP.

Today is Monday, January 29, 2024.

Last week we attended the following two meetings that, among others, deserve highlighting:

• "2023 VCM in Review: Carbon Markets at an Inflection Point".

• "The state of Article 6 implementation after COP 28. What opportunities exis t for the private sector?".

The first session, organized on a quarterly basis, "reviewed 2023's key global carbon markets developments and explored potential inflection points to look out for in 2024". Contents are always thorough, evolving over time and presented by an evidently knowledgeable team, led by Guy Turner, founder of Trove Research, part of MSCI Inc. since November 2024. One part we from Carbon Credit Markets like in special is the quarterly assessment they do live with the audience, about expected carbon prices for nature restoration, REDD+, renewable energy and clean cooking. Why do we like? Because they engage with transparency. They follow-up and update perspectives. One slide: "Did prices end 2023 where we all expected?". Next slide: "Pool results: what will carbon prices be at the end of 2024?".

Here is the link to a short LinkedIn post, from where you have the way to the recording and slides.

The other session was jointly organized by the Article 6 Implementation Partnership (A6IP) and IETA.

After the opening remarks by Kazuhisa Koakutsu, Director of A6IP Center and Andrea Bonzanni, International Policy Director of IETA - "challenging year 2023, for bad reasons, some explained, others surrounded by ideology", the Program Manager of the Paris Agreement A6IP Center presented trends and updates, after negotiations at COP-28. Here the highlights:

• "Absence of decisions from COP-28 does not prevent countries from continuing to cooperate under Article 6".

• Article 6.2: key areas of broad convergence already achieved but also topics still with divergent views.

• Article 6.4: substantive progress in 2023. And recommendations on methodology requirements and activities involving removals.

• The way forward: demonstration of actual projects accelerate Article 6 implementation (specially by the private sector).

Slides attached hereto.

Supanut_A6IP-COP28-Summary_24Jan_2024

.pdf

Download PDF • 343KB

Then the International Policy Advisor from IETA started his presentation by saying: "Although there was a "failure" in reaching agreement, it is moving ahead". What happened at COP-28 related to Article 6 was presented with some more details, including the "no agreements". On the other hand, IETA also presented a slide with several MoUs and bilateral agreements already achieved - Morroco, Norway, Rwanda, Kuwait, Singapore, Fiji, Senegal, Costa Rica, Chile, Tunisia, Switzerland, Papua New Guinea - and some national and regional frameworks on the pipeline. To name a few, Turkey's ETS in 2025 and Nigeria's drafting its National Carbon Market Strategy. And several other specific VCM developments. Great slides with links to other key documentation. According to Andrea Bonzanni, "unprecedent annoucements and cooperation".

Here the slides.

IETA_A6IP_Webinar_24Jan_2024

.pdf

Download PDF • 1.16MB

We noted that Baku was mentioned several times. This is probably an indication of the high expectations related to Article 6 for the next COP-29.

Concluding, a panel moderated by Mr. Takashi Hongo from Mitsui:

• Kazuhisa Koakutsu, A6IP Center: "Challenges: growing and developments at various national levels. At the end of the day, it is the private sector that will be implementing and financing all that".

• Edwin Aalders, DNV: From the COP28 "frustration" to the lessons learnt, for exemple from the CDM. "We have probably already 95% of the rules in place".

• Florence Laloë, Conservation International: "Ideological discussion still open whether nature based removals should or not be allowed on Article 6.4. Frustrating. Besides the need to push for high integrity."

At the end of the panel, Mr. Hongo presented a survey about the JCM. You may recall our post "J-Credit: Tokyo Stock Exchange to start carbon credit trading on October 11". As can be seen at the image below, the following two questions were answered by ~50 buyers and ~25 sellers:

1. What is needed to scale up the use of JCM in the future?

2. What types of projects do you expect JCM in the future?

Really interesting to notice the level of convergence - or not - per subject between buyers and sellers in the Japanese Carbon Market.

#carboncredits

#article6

#carbonmarkets

www.carboncreditmarkets.com

Slide JCM Survey presented at Article 6 implementation Partnership Webinar 24 January 2024