COP28: New Framework for the Carbon Market

The UN climate conference in Dubai marks a historic turning point with the adoption of a framework for the global carbon market.
Avenir prometteur pour le marché carbone

Partagez:

A significant milestone has been reached amid intense preparations for the UN climate change conference in Dubai. The supervisory body for Article 6.4 of the Paris Agreement, after two years of intensive negotiations, has agreed a framework for project methodologies and carbon removals. These recommendations will be presented to COP28 for approval by the GCA of the Paris Agreement.

Carbon Exchange Mechanism

Article 6 of the Paris Agreement sets out the rules for global trade in greenhouse gas emission reductions. It provides countries and companies with an essential means of achieving and accelerating their climate objectives. Article 6.4, in particular, allows a company in one country to reduce its emissions locally and sell them to another company in another country. This operationalization will provide a new structure for the global carbon market.

Objective 2024

Olga Gassan-zade, President of the Article 6.4 Supervisory Body, expressed confidence that the mechanism would be fully implemented by 2024. The decision on eligible carbon projects was a difficult process, marked by tense and demanding negotiations.

Challenges and solutions

The recommendations on greenhouse gas removals and methodological requirements were particularly challenging because of their impact on the mechanism as a whole. However, the ratification of a document finalized by the countries at COP28 is eagerly awaited with some trepidation. Carbon markets, both regulated and voluntary, are following these developments closely.

Impacts on the Carbon Market

The voluntary carbon market is directly concerned by Article 6.4, as it will create a new emissions trading market. In addition, the definition and adoption of the rules remain uncertain, raising questions among buyers and developers of carbon projects.

Consensus Difficult

Agreement on eligible projects and methodologies took longer than expected. Virtual meetings were held to agree practical standards for the development of carbon credit methodologies and carbon removals.

Technical problems and solutions

Difficult questions have emerged concerning baselines and their adjustment, as well as the rules for including greenhouse gas removals under Article 6.4. The supervisory body has recognized the need for further guidance on these issues.
The methodologies developed will have a major impact on the voluntary carbon market, which is currently facing problems of integrity and accusations of greenwashing. In addition, the UN-backed rules of Article 6.4 could provide the direction needed to restore investor and buyer confidence in the voluntary carbon market.

The agreement on the Article 6.4 framework represents a major step forward in the fight against climate change. As COP28 approaches, the world looks forward to the ratification of these directives, which could fundamentally transform the global carbon market and accelerate global efforts to reduce greenhouse gas emissions.

Budapest and Bratislava jointly reject the European Commission's proposal to ban Russian energy supplies, highlighting significant economic risks and a direct threat to their energy security, days ahead of a key meeting.
Libya officially contests Greece's allocation of offshore oil permits, exacerbating regional tensions over disputed maritime areas south of Crete, rich in hydrocarbons and contested by several Mediterranean states.
Hungary, supported by Slovakia, strongly expresses opposition to the European Commission's plan to phase out imports of Russian energy resources, citing major economic and energy impacts for Central Europe.
Israeli military strikes on Iran's Natanz nuclear site destroyed critical electrical infrastructure but did not reach strategic underground facilities, according to the International Atomic Energy Agency (IAEA).
The French president travels to Nuuk on 15 June to support Greenlandic sovereignty, review energy projects and respond to recent US pressure, according to the Élysée.
Kazakhstan has selected Rosatom and China National Nuclear Corporation to build two nuclear power plants totaling 2.4 GW, a decision following a favorable referendum and coinciding with Xi Jinping’s upcoming strategic visit.
Israeli strikes against Iranian nuclear sites disrupt US-Iranian talks on the nuclear deal. Tehran now considers canceling the upcoming negotiation round in Oman, heightening regional economic concerns.
Facing alarming breaches of uranium enrichment thresholds by Iran and explicit existential threats, Israel launches targeted military strikes against Iranian nuclear infrastructure, escalating regional tensions dramatically.
The Kremlin has confirmed that Vladimir Putin aims to help resolve the nuclear dispute between the United States and Iran, leveraging strengthened strategic ties with Tehran.
President Lee Jae-myung adopts an energy diplomacy rooted in national interest, amid a complex international landscape of rivalries that could create challenging situations for the country and its energy businesses.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.
Donald Trump firmly rejects any uranium enrichment by Iran, while Russia affirms Tehran’s right to civil nuclear power, intensifying tensions in negotiations over the Iranian nuclear program.
Syria has signed a $7bn agreement with a consortium of companies from Qatar, Turkey and the United States to rebuild its national power sector.
Friedrich Merz confirmed that Germany would block any attempt to relaunch the Nord Stream 2 pipeline, despite internal calls suggesting a potential reopening of dialogue with Moscow.
A memorandum of understanding formalises energy cooperation between the European Union and the Latin American Energy Organization, including permanent EU participation in the organisation’s governance bodies.
Prime Minister Viktor Orban announced that Hungary would oppose the EU's plan to ban Russian energy deliveries by 2027, both legally and politically.
Michael Kretschmer, Minister-President of Saxony, proposed restarting dialogue with Russia on the Nord Stream 2 pipeline, despite clear opposition from the German government to any reactivation of the project.
Donald Trump is calling on the United Kingdom to abandon wind energy in favor of revitalizing offshore oil extraction, sparking debate over the economic and political implications of such an energy strategy after their recent trade agreement.
China and Egypt concluded over 30 energy-focused agreements, including electric vehicles, smart grids and storage technologies.
Facing Russian dominance in the Akkuyu nuclear project, Turkey accelerates international negotiations, aiming to mitigate risks related to energy dependency and potential strategic conflicts of interest.