Carbon Pulse

The World Bank has priced what it says is the first bond linking investors' financial return to carbon removals from reforestation in the Amazon. The 9-year, $225 million, principal-protected Amazon Reforestation-Linked Bond, issued by the World Bank, provides investors with a coupon including a fixed guaranteed component and a variable component linked to the generation of carbon removal units (CRUs) from reforestation projects in parts of Brazil's Amazon rainforest. It is the first outcome bond to connect investors' financial return to removing atmospheric carbon, differing from previous transactions linked to the sale of carbon credits from avoided emissions, the World Bank said in a statement. The transaction will see about $36 mln of capital mobilised to support the reforestation activities of Mombak, a carbon removals developer located in Brazil, which will use the funds to acquire land or partner with landowners in the Amazon to reforest the land with native trees. Read our coverage in full 👉 https://lnkd.in/eX_tJx7A

International air carriers' association IATA has urged that greater supply of CORSIA carbon credits be made available to the market to enable the aviation industry to effectively decarbonise, warning of a looming shortage. There is a significant disparity between supply and demand of Eligible Emissions Units (EEUs) under the UN's international aviation offsetting scheme, according to the organisation. As of 2024, 126 countries have opted to participate in CORSIA, which is operated by UN agency ICAO, with the demand for EEUs projected to range between 64-162 million units during Phase 1 (2024-26), depending on traffic forecast scenarios. But the current supply of EEUs is “extremely limited”, with just 4.6 mln units made available earlier this year through the Architecture for REDD Transactions programme (ART TREES), which is tied to a project in Guyana. Read our coverage in full 👉 https://lnkd.in/e8iGHNzG

Carbon markets globally are being held back due to a lack of trust, but they could be a game changer in advancing climate action and bring tangible benefits, especially for developing countries, according to a report published by the World Bank. In a report titled “High Integrity, High Impact: The World Bank Engagement Roadmap for Carbon Markets”, released this week, the World Bank said that if done right, carbon markets can serve as a crucial mechanism for financing decarbonisation efforts and significantly enhance financial flows to developing countries. “By assigning a financial value to carbon reduction and removal, carbon markets encourage private sector engagement in projects that might otherwise struggle to secure funding, especially without a clear price signal,” the bank said. “Countries and communities blessed with natural resources, such as forests, can generate millions, if not billions of dollars from new sources of revenue from protecting, preserving, restoring, and regenerating them.” To date, the World Bank has supported 47 nations in the development of REDD projects under its Forest Carbon Partnership Facility (FCPF), launched in 2008. Read in full here 👉 https://lnkd.in/eWiDYRmx

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Nearly one third of credits will not be able to use the Integrity Council for the Voluntary Carbon Market (ICVCM)’s Core Carbon Principles (CCPs) label, the standard-setting body said Tuesday, while allowing one more methane methodology into the high-integrity category. The ICVCM board has decided that eight methodologies used to design and implement renewable energy projects fail to meet the CCP Assessment Framework requirements on additionality because they are insufficiently rigorous in assessing whether the projects would have gone ahead without the incentive of carbon credit revenues. These methodologies cover approximately 236 million unretired credits, making up 32% of the issued voluntary carbon market. Some 68% of the unretired credits in the market have now failed to make the CCP grade, either because they have been rejected by the ICVCM or they fall outside of the scope of the body's assessment. Read our coverage in full here 👉 https://lnkd.in/eiT_BayE

Two recent high-level climate meetings have sent promising signs that remaining Article 6 issues will be resolved at COP29, and that governments remain committed to last year's pledge to transition away from fossil fuels, according to an EU source. The Ministerial on Climate Action (MoCA) was held on July 22-23 in Wuhan, China, and quickly followed by a heads of delegation meeting organised by the Azerbaijani COP29 presidency on July 26-27 in Shamakhi, Azerbaijan. “There were a lot of reassurances during MoCA that governments were taking the commitments that they took last year in Dubai seriously. That includes the UAE consensus, in particular from China and from other major developing countries, acknowledging the commitment to transition away from fossil fuels,” they said. This follows widespread concern expressed by NGOs and negotiators alike at UN climate talks in Bonn in June, where governments failed to discuss how to take forward or acknowledge the commitment they made to “transition away from fossil fuels” at December's COP28 in Dubai. Read our coverage in full 👉 https://lnkd.in/e8sxjd6n

Tech giant Microsoft accounted for more than 90% of durable carbon removals over the first half of 2024, according to analysis published this week. The report, published by platform CDR.fyi, found that 4.8 million tonnes of durable carbon removal (CDR) transaction volume was recorded in the second quarter of the year, the highest quarterly figure to date. Through the first six months of the year, the market has grown 18% on full-year 2023. Read our coverage in full 👉 https://lnkd.in/eswFSckW

The Science Based Targets initiative (SBTi) will formally consider the use of voluntary carbon credits under its corporate net-zero standard, according to technical papers published Tuesday, with proposals that would allow companies to use units towards climate targets under certain circumstances. The organisation published the documents as part of a revision to its Corporate Net-Zero Standard (CNZS), which could now be opened up to carbon credit use by companies towards meeting Scope 3, or value chain, climate targets. Published documents included findings from an independent review on the effectiveness of carbon credits based on a public call for evidence, as well as a discussion paper on their potential use towards science-aligned corporate net zero targets that included the different scenarios now under consideration. Circumstances where carbon credits could be permissible include in-value chain mitigation activities to substantiate emissions reductions, the neutralising of residual emissions, and to support beyond value chain mitigation (BVCM), SBTi said. The cross-stakeholder body underlined that for each of the three possible scenarios involving carbon credits under consideration, the priority remains the direct decarbonisation of a company's value chain and that any units could not be used as a substitute. This means that under no scenario outlined would voluntary carbon credits be allowed to be used for offsetting emissions, SBTi underlined. Meanwhile, under BVCM, the organisation said that credits could be used to cover emissions excluded from target boundaries under the current standard, which would therefore encourage additional finance for climate action. Earlier this year, SBTi set out corporate guidelines for beyond value chain emissions cuts via voluntary carbon credits. Read our coverage in full here 👉 https://lnkd.in/epN67Sz2

Air New Zealand on Tuesday dropped its 2030 carbon emissions intensity target and announced it is withdrawing from the Science Based Target initiative (SBTi), citing uncertain regulatory support and lack of sustainable aviation fuel (SAF) supply. The carrier had set itself a target of reducing its emissions intensity by 28.9% below 2019 levels by the end of this decade on its way to hitting net zero by mid-century, working with the SBTi on how to achieve it. However, those plans have now been scrapped and the goal removed from the carrier’s website. “Many of the levers needed to meet the target, including the availability of new aircraft, the affordability of alternative jet fuels, and global and domestic regulatory and policy support, are outside the airline’s direct control and remain challenging,” Air NZ said in an announcement to NZX, the New Zealand stock exchange. The company said it remains committed to its 2050 net zero emissions target, and that it has begun work to consider a new near-term emissions target. Read our coverage in full 👉 https://lnkd.in/dyBvn4f7

Targeted government support will be needed to scale the supply of high-integrity carbon credits and to ensure strong demand and price premiums for these issuances, the OECD said in a report published Thursday. Voluntary carbon markets (VCMs) could, if accompanied by robust social and environmental safeguards, support both climate mitigation and development objectives, research from the multilateral organisation said. However, carbon credits also have a number of undesirable characteristics from a jurisdictional perspective – they require a source of demand or public expenditure, they are associated with high administrative costs, and targeting carbon credit revenues is difficult – it added. Governments must therefore implement targeted strategies, develop comprehensive regulation, and work with private and non-governmental stakeholders to help scale good quality credit supply. Read the report in full here 👉 https://lnkd.in/erEpGgtN