COP28 Update On Day Six: The Most Important Developments For The Carbon Industry

COP28 Indicates Failure To Push For Fossil Fuels Phase Out - Carbon Herald

COP28 is proving to be as interesting and controversial as expected. With too many announcements and developments happening in the space of a few days we’ve decided to put everything relevant to the carbon industry in one place.

Exxon CEO defends carbon capture

After becoming the first CEO of a major oil company to attend COP on Saturday, Darren Woods was quick to reject a report by the International Energy Agency (IEA) which said carbon capture should let go of the “illusion” that the technology is part of the climate change solution. Woods claimed the same can be said about EVs and solar power.

In the last few years Exxon has established a business unit called Low Carbon Solutions and shared plans for $17 billion of investments with biofuels, hydrogen and carbon capture set to play important roles. The company has also stated that the total addressable market for this is $6 trillion.

President Biden and IMF push for price on carbon

The EPA announced a new set of limits for methane at COP, a vital effort to reduce the short-term damage the gas has been causing. But observers noticed that (a form) of carbon pricing was also included in what is an active federal regulation.

Dubbed the “social cost of carbon,” it is an aggregation of the financial cost of extreme weather and pollution from greenhouse gas emissions and could act as a tool for enforcing stricter standards on the energy industry.

IMF chief Kristalina Georgieva has also been discussing carbon pricing at COP, though in its more familiar form of prices for carbon credits. According to Georgieva decarbonization can’t accelerate without the pricing mechanism.

University of Oxford calculates damages of adopting carbon capture

A report published by the Smith School of Enterprise and the Environment at the University of Oxford has made a direct comparison between decarbonization scenarios involving carbon capture and those without it (relying only on renewbles to clean up the grid).

According to the paper a transition to renewables by 2050 would be $30 trillion cheaper compared to what one of the two carbon capture adoption scenarios it has formulated.

1 gigaton of carbon storage by 2030

President Biden’s Carbon Management Challenge announced on Tuesday that the international initiative is setting itself an ambitious 1 gigaton of operational storage capacity by 2030.

Scientists say carbon removal is becoming necessary

A report from nonprofits World Climate Research Programme, Future Earth and the Earth League says that keeping global warming within current targets will need “a rapid and managed fossil fuel phase-out.” They also pointed out that the carbon removal shouldn’t be considered as a replacement for “rapid and deep emissions reductions,” but has a place as an additional layer of protection from the most severe consequences of a warming planet.

CFTC

Though not strictly hapenning at COP28, the CFTC appears to have timed its push for increased and improved oversight of voluntary carbon markets.

“Today’s action by the CFTC is the culmination of a two-year examination of carbon markets, and many more years of in-depth work regarding the impacts of climate on financial markets. The Voluntary Carbon Market Proposed Guidance is a clear statement that the CFTC will do its part to elevate the standard setting efforts already underway,” said CFTC Chairman Rostin Behnam. “Our goal all along has been to help shape standards in support of integrity, which will lead to transparency, liquidity, and ultimately price discovery – all established hallmarks of CFTC regulated markets. I am incredibly proud of our agency for taking such intentional and impactful action today.”

End-to-End Integrity Framework for carbon credits

Two important announcements were made at COP28 that will likely change the landscape of the voluntary carbon markets. The first one involves the Science Based Targets initiative, GHG Protocol and the Integrity Council for the Voluntary Carbon Market (ICVCM) and Voluntary Carbon Markets Initiative, who will be setting up an End-to-End Integrity Framework.

The end result of the collaboration will provide a higher level of alignment between the parties and is aimed at solving one of the emerging challenges of the market – having a unified and clear standard for project developers, intermediaries and buyers of carbon credits.

Unified carbon standards

Another coalition was unveiled on Monday bringing together the leading independent carbon crediting standards – ACRARTClimate Action ReserveGlobal Carbon CouncilGold Standard, and Verra (importantly all these organization are CORSIA-approved).

The standards plan to establish a structure to continue exchanging knowledge to improve their crediting programs, better assist activities that bring about mitigation and real community benefits, and offer strong mechanisms for countries to implement their Article 6 strategies.

Read more: Unified Carbon Standard Coalition Announced At COP28

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