Forecasts show that the carbon credit market will grow tremendously. By 2030, it could increase to $7 billion to $35 billion, according to MSCI. This expansion is being driven by several factors. Demand for carbon removal credits is growing. Many see them as more credible, even if they cost more. Companies with ambitious climate targets by 2030 are likely to rely on carbon credits to offset emissions. Buyers are now focusing on high-quality credits. They prefer projects with strict standards and clear transparency.

Looking ahead, MSCI predicts that the market could reach $45 to $250 billion by 2050 This growth will be driven by urgent corporate demand as many companies approach their zero-hour deadlines. (Jennifer L, more at carboncredits.com)

This year, companies are improving their climate strategies by integrating carbon offsets. The focus is on projects that create real environmental benefits. With increasing public scrutiny, transparency and quality are top priorities. (more…)

The analysis focuses on evaluation of ten existing carbon credit mechanisms, which relate to climate-friendly agriculture. The aim is to identify strengths and weaknesses these (more…)

Climate change has become a pressing global issue, and innovative solutions are emerging to combat its effects. Among these, carbon cryptocurrencies are playing a key role by leveraging blockchain technology to trade carbon credits. These cryptocurrencies allow individuals, businesses, and governments to offset their emissions while investing in sustainable and green initiatives.

By ensuring transparency and accuracy in the measurement and verification of carbon emissions, these projects make carbon trading more efficient and accessible. They also encourage collaboration between organizations, governments and businesses to create a circular economy and support a sustainable low-carbon future. (More on analyticsinsight.net)

Like stocks, investors can buy and sell exchange-traded funds (ETFs) whenever the market is open. Often, investing in carbon credits through ETFs offers a simple and diverse way to enter this expanding market. We've covered some of the best ETFs for 2025 in the carbon credit market and how they support sustainable investing. (More on carboncredits.com)

The Carbon Market Regulations Tracker is developed to improve the understanding and transparency of carbon market regulations and support governments, project developers, investors and other market participants in navigating the changing regulatory landscape.

The tracker serves as a central information hub, offering standardized summaries and direct links to relevant regulations related to core and credit market activities within voluntary carbon markets and markets under Article 6 of the Paris Agreement. It includes both implemented and planned or consulted regulations, but does not include carbon tax policies or emissions trading schemes unless they involve carbon credits. The tracker is hosted on the Gold Standard website and will be regularly maintained to ensure that it remains a relevant tool to support market certainty and facilitate knowledge sharing among key market participants across jurisdictions. (More on goldstandard.org)

Recently introduced by the European Union (" EU "), carbon border adjustment mechanism (" CBAM ") applies to imports into the EU from "third countries" ( i.e. . from non-EU countries) with the broad aim of reducing carbon emissions. emissions and promoting the EU's climate objectives. Long before the adoption of the CBAM in May 2023, the EU launched the world's first carbon market in 2005 and introduced the Emissions Trading System (hereinafter referred to as the "ETS"). ETS " and the EU ETS, " EU ETS "). (More at lexology.com)

The global carbon credit market remained flat in 2024, worth about $1.4 trillion, according to an MSCI report. Demand for carbon credits – measured by the number of credits “retired” or permanently used – did not grow significantly. Carbon prices meanwhile, they continued to decline.

However, the market is showing signs of potential growth. As more companies commit to ambitious climate goals and new policies emerge, experts believe the market could expand significantly.

• By 2030, the market is expected to reach $7 to $35 billion and by 2050 it could climb to 250 billion USD .

(Jennifer L, more at carboncredits.com)

The Carbon Removal Certification Framework Regulation (hereinafter referred to as the ‘CRCF Regulation’ or ‘the Regulation’), which aims to facilitate and promote the permanent reduction of greenhouse gas emissions, will enter into force on 26 December 2024. To achieve this objective, the Regulation establishes a broad voluntary framework for the certification of carbon removals and land reductions in the voluntary carbon market. The reliable and harmonised application and enforcement of the quality criteria set out in the Regulation should help prevent so-called greenwashing and ensure that greenhouse gas reduction efforts are transparent and credible. This should increase the trust of buyers in carbon removal certificates and incentivise the development of new carbon removal projects, ultimately helping the Union to achieve its climate objectives. ( More on lexology.com)

The decisions taken at COP29 in Baku (2024) have significantly moved carbon markets under Article 6 of the Paris Agreement towards functionality. This is likely to also have an impact on the Voluntary Carbon Market (VCM), where most emission reduction credits (ERs) have been traded so far.

The VCM will continue to operate in parallel with the markets under Article 6, while A6.4ER (emission reductions approved by the Article 6.4 mechanism) and ITMO (internationally transferable mitigation outcomes) will be traded on the VCM.

It is difficult to predict yet to what extent Article 6 markets will affect VCM. However, it is likely that the clarity and transparency of the rules agreed at COP29 will lead to increased demand for A6.4ER and ITMO from states.

Potential positive impacts on VCM:

• Increased trust and integrity: It is expected that the transparency and integrity that comes with the authorization of A6.4ER and ITMO under Article 6, will gradually restore confidence in the quality of VCM credits.
• Greater standards compatibility: Existing carbon standards (Verra, Gold Standard, Puro Earth) will likely focus more on compatibility with Article 6 requirements so that their ERs can more easily qualify as A6.4ER or ITMO. This could lead to higher integrity and price of ERs approved by carbon standards.
• Investment stimulation: If ERs authorised under Article 6 become internationally accepted as emission compensation, This could lead to greater investment in ER projects and an expansion of their offer.
• Potential for regulation: The functioning of markets under Article 6 could lead to greater confidence of states in the implementation of domestic regulation, which would force or incentivize companies to purchase ER to offset their emissions.

Potential negative impacts on VCM:

• Higher price of A6.4ER and ITMO: Increased demand from states for A6.4ER and ITMO could lead to an increase in their price and discourage private entities from purchasing them.

Important aspects for companies participating in VCM:

• Monitoring progress: Companies must monitor developments in Article 6 markets and their impact on VCM in order to adapt their strategies.
• Considering purchasing A6.4ER and ITMO: Companies should consider purchasing A6.4ER and ITMO if their budget allows to take advantage of their potential benefits.
• Compatibility with Article 6: Companies should ensure that their ER projects meet the requirements of Article 6 in order to be able to apply for authorization as A6.4ER or ITMO in the future.

The VCM and Article 6 markets will be closely linked in the coming years. Companies participating in the VCM need to monitor developments and respond to changes in a timely manner to remain competitive and contribute to reducing emissions. Spring

This study guide summarizes key aspects of the carbon market under Article 6 of the Paris Agreement and related topics. It focuses on the mechanisms under Articles 6.2 and 6.4, their functioning and implications for the voluntary carbon market (VCM).

What is the difference between an internationally transferable mitigation outcome (ITMO) and an Article 6.4 emission reduction (A6.4ER)?

• ITMO is an emission reduction transferred between States under Article 6.2. A6.4ER is an emission reduction generated by an activity approved by the Paris Agreement Crediting Mechanism (PACM) under Article 6.4.

What is the role of authorisation in the context of Article 6.2?

• The authorization in Article 6.2 ensures that the ITMO is properly accounted for and transferred to the acquiring party. Both parties must approve the use of the ITMO to achieve the NDC or other international mitigation purposes (OIMP).

What does the term "first transfer" mean at ITMO and why is it important?

• The “first transfer” is the first official application of the corresponding adjustment (CA) in national registries. It provides certainty and transparency as to when the emission reductions are to be applied to the acquiring country.

 

What are the main elements of transparency in the Article 6.2 mechanism?

• Transparency in Article 6.2 includes disclosure of information about ITMO, the authorization process, first transfers, ownership, cancellations and use to achieve NDC or OIMP.

What are the key points agreed at COP29 regarding Article 6.4?

• COP29 approved standards for methodologies and emission removals, clarified the authorization process for A6.4ER, and set rules for the transition of CDM activities to PACM.

What is a Mitigation Contribution Unit (MCU) and how can it become an A6.4ER?

• An MCU is an emission reduction that has not been authorized as an A6.4ER. It may become an A6.4ER if the host party issues an authorization statement within a specified timeframe.

What is the process for transitioning activities from the Clean Development Mechanism (CDM) to the PACM?

• CDM activities may be transferred to the PACM after approval by the UNFCCC Secretariat and the designated national authority of the host Party. They must comply with all relevant standards and procedures under Article 6.4.

What are the main tasks of the Supervisory Body under Article 6.4 (SBM) and the UNFCCC Secretariat before COP30?

• The SBM is tasked with developing standards, tools and guidelines for PACM, while the UNFCCC Secretariat is to establish a PACM registry and support the transition of CDM activities.

How might COP29 decisions affect the voluntary carbon market (VCM)?

• COP29 decisions may increase the trust and integrity of the VCM, as A6.4ER and ITMO will also be traded on the VCM.

What are the potential impacts of Article 6 carbon markets on VCM?

• Article 6 carbon markets could stimulate VCM by increasing demand for quality emission reductions, but could also lead to higher prices.

Glossary of key terms

A6.4ER: Emission reductions approved by the Paris Agreement Credit Allocation Mechanism (PACM) under Article 6.4.

Authorization: The process by which a host country approves the use of emission reductions such as A6.4ER or ITMO.

CDM: The Clean Development Mechanism, established under the Kyoto Protocol, operated until 2020.

ITMO: Internationally transferable mitigation result, transferred between States pursuant to Article 6.2.

MCU: Mitigation Contribution Unit, emission reduction that was not authorized as A6.4ER.

NDC: Nationally Determined Contribution, a country's commitment to reduce emissions and adapt to climate change.

OIMP: Other international mitigation purposes, the use of emission reductions for purposes other than achieving NDCs.

PACM: Paris Agreement Credit Allocation Mechanism, Market for A6.4ER under Article 6.4.

First transfer: First official application of the corresponding adjustment (CA) in national registries, transferring the emission reductions to the acquiring party.

SBM: The supervisory authority under Article 6.4, which oversees the functioning of the PACM.

VCM: A voluntary carbon market where companies buy and sell emission reductions to offset their emissions.

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The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) was held in Baku, Azerbaijan, from 11 to 24 November 2024. with regard to Article 6.4, one with regard to Article 6.2 and one with regard to Article 6.8. In particular, these decisions, after nine years of negotiations since the 2015 Paris Agreement, contained the final agreements needed to finally move carbon markets under Article 6 towards functioning. (Alex Blomfield, William Ferris, more on lexology.com)

Glossary of key terms

A6.4ER: Emission reductions approved by the Paris Agreement Credit Allocation Mechanism (PACM) under Article 6.4.

Authorization: The process by which a host country approves the use of emission reductions such as A6.4ER or ITMO.

CDM: The Clean Development Mechanism, established under the Kyoto Protocol, operated until 2020.

ITMO: Internationally transferable mitigation result, transferred between States pursuant to Article 6.2.

MCU: Mitigation Contribution Unit, emission reduction that was not authorized as A6.4ER.

NDC: Nationally Determined Contribution, a country's commitment to reduce emissions and adapt to climate change.

OIMP: Other international mitigation purposes, the use of emission reductions for purposes other than achieving NDCs.

PACM: Paris Agreement Credit Allocation Mechanism, Market for A6.4ER under Article 6.4.

First transfer: First official application of the corresponding adjustment (CA) in national registries, transferring the emission reductions to the acquiring party.

SBM: The supervisory authority under Article 6.4, which oversees the functioning of the PACM.

VCM: A voluntary carbon market where companies buy and sell emission reductions to offset their emissions.

The Conference of the Parties (COP), the decision-making body responsible for monitoring and assessing the implementation of the United Nations Framework Convention on Climate Change (UNFCCC), has just concluded its meetings in Baku, Azerbaijan (COP29). COP29 adopted a series of decisions expanding the role of carbon markets under the Paris Agreement and brought about a breakthrough in establishing a global carbon market managed by the UN. (More on lexology.com)

Documents Standard: Application of the requirements of Chapter VB (Methodologies) for the development and evaluation of methodologies for the Article 6.4 mechanism and : Standard: Requirements for activities involving removal under the Article 6.4 mechanism, They set out key rules and procedures for the mechanism of Article 6.4 of the Paris Agreement.

1. What are “removals” in the context of the Article 6.4 mechanism?

“Removals” refer to processes by which greenhouse gases are removed from the atmosphere as a result of intentional human activities and are either destroyed or permanently stored through anthropogenic activities. These include, for example, afforestation, ecosystem restoration and carbon capture and storage.

 

2. How are removals monitored under the Article 6.4 mechanism activities?

Monitoring of removals shall be carried out on the basis of data obtained from measurements, sampling, remote sensing, third-party sources and published literature. Such data shall be robust, statistically representative, conservative and shall take appropriate account of associated uncertainties. The methodology of the mechanism shall include provisions specifying monitoring approaches for all parameters necessary to calculate removals by type of emission reduction activity.

 

3. How are the risks of reversal of removals taken into account?

Participants in activities must prevent and minimize the risks of reversal of removals. Reversal of removals for which A6.4ER units have been issued must be fully remedied. Participants must conduct a risk assessment, which must include a risk mitigation plan, using the Reversal Risk Assessment Tool to identify, assess and mitigate risks and to calculate an overall percentage risk assessment (hereinafter referred to as the “Risk Assessment”) that takes into account both reversible and irreversible reversals.

 

4. What is a Reversal Risk Buffer Pool Account and how does it work?

The Supervisory Body shall establish an account in the Mechanism Registry called the Reversal Risk Buffer Pool Account, which shall serve to fully correct both reversible and irreversible reversals by cancelling the equivalent quantity and status of the authorization (authorized A6.4ER or mitigation contribution unit) of the A6.4ER Buffer Units. This account shall pool all contributions of the A6.4ER Buffer Units.

 

5. What happens if an event is detected that could lead to a reversal of removals?

Participants in activities must notify the Supervisory Body of any observed event involving the release of stored greenhouse gases that could lead to a reversal within 30 days of the detection of such event. Upon receipt of this notification, the Supervisory Body shall instruct the mechanism registry administrator to suspend the issuance, transfer and cancellation operations of A6.4ER units originating from the activity involving the removal of emissions.

 

6. How is it ensured that emission removal activities have a positive impact on sustainable development?

Participants in activities must implement robust social and environmental safeguards to minimise and, where possible, prevent negative environmental and social impacts of the activity in accordance with the requirements set out in the Article 6.4 Sustainable Development Tool, the Article 6.4 Mechanism Activity Standard, the Article 6.4 Mechanism Activity Cycle Procedure for Projects, as well as any other relevant provisions developed by the Supervisory Body in this regard.

 

7. How is emission leakage addressed in connection with emission removal activities?

Participants in activities shall address the risk of emission leakage and take into account any residual leakage when calculating net emission removals in accordance with the requirements set out in the document “Standard: Application of the requirements of Chapter VB (Methodologies) for the development and assessment of Article 6.4 mechanism methodologies”.

 

8. What are the requirements for methodologies for emission removal activities under the Article 6.4 mechanism?

The methodology of the mechanism must, inter alia, support ambition over time, be realistic, transparent, conservative and credible, take into account pent-up demand and ensure a fair sharing of mitigation benefits among participating parties. They must be consistent with the long-term temperature goals of the Paris Agreement and its long-term objectives. Spring

 

Article 6.4, often referred to as the Paris Agreement’s credit allocation mechanism, sets out key principles for the creation of a global carbon credit market. This market allows countries to achieve their nationally determined contributions (NDCs) and net-zero emissions targets through the purchase and sale of carbon offset credits. By this year, the Parties to the Paris Agreement were to finalise the technical rules and procedures necessary to implement the mechanism under Article 6.4.

By October 2024, the UN-backed oversight body responsible for setting the framework for the Paris Agreement's credit mechanism has finalized two key standards on carbon removal and the development of carbon allocation projects. First standard (standard) contains requirements for the development and evaluation of projects under this credit mechanism. The second standard sets criteria for projects that remove greenhouse gases from the atmosphere.

These standards provide the necessary guidance for developers of carbon offset projects, including the development and submission of methodologies for their projects. This enables these projects to be registered under the Paris Agreement’s credit allocation mechanism and increases the dynamism of the global carbon market by ensuring the verifiability of emission reduction projects. The credit mechanism also facilitates direct financing for the implementation of these projects, thereby incentivizing countries and the private sector to reduce their carbon footprint.

The Authority plans to continue its work in 2025, in particular to clarify the rules on credit risk. Notably, a recent decision requires the Authority’s work to be guided by “the best available science.”

The adoption of Article 6.4 standards at COP29 represents an important step towards a more efficient and integrated global carbon market. However, the Paris Agreement parties still need to agree on several remaining aspects of Article 6, including Article 6(2), which would allow different parties, such as countries and private companies, to exchange emission reductions through bilateral agreements. Spring

The emerging ASEAN (Association of Southeast Asian Nations) carbon markets represent a unique opportunity to address climate change while supporting economic development. The region’s natural resources and strategic location, which includes 10 dynamic economies, offer great potential to become a leader in global decarbonization efforts. (Jennifer L, more at carboncredits.com

This document deals with the importance of international cooperation in the field of carbon pricing as a key tool to achieve the goals of the Paris Agreement on climate change. The document highlights that while there are a number of initiatives to support carbon pricing, progress in their implementation has been slow, particularly in developing countries.

The document focuses on the following key aspects:

• Connecting ambitions with actions: The paper analyses whether international cooperation can help bridge the gap between ambitious climate goals and their actual implementation. It points to studies that suggest that global use of carbon markets could double climate mitigation efforts. However, it also warns that there is still a lack of emphasis within the UN on the possibilities for international cooperation on carbon pricing.
• Current status of carbon pricing: The paper provides an overview of the current state of carbon pricing at both the domestic and international levels. It notes that most existing carbon pricing mechanisms are located in developed countries, while implementation in developing countries has been slower. The paper identifies several international initiatives that are trying to fill this gap, including those led by international organizations (such as the World Bank, OECD and UNDP) and those led by individual countries or groups of countries (such as ICAP, GCPC, A6IP and the Florence Process).
• Obstacles and convergence: The document identifies obstacles to the effective implementation of carbon pricing and highlights the need for better coordination between existing initiatives. It also highlights the importance of building capacity in developing countries and ensuring compatibility between different carbon pricing systems.
• Recommendations: Based on the analysis, the document formulates specific recommendations to strengthen international cooperation on carbon pricing. These recommendations include:
  • Providing financial and technical assistance to developing countries to build their capacity in carbon pricing.
  • Supporting developing countries in implementing domestic carbon pricing mechanisms, such as emissions trading systems and carbon taxes.
  • Ensuring a minimum level of compatibility between emission allowance markets and credit markets.
  • Improving coordination and integration between existing international initiatives.
  • The active role of the G20 in connecting developed and developing countries in international cooperation.

The document emphasizes that Carbon pricing is a key tool for mitigating climate change and that international cooperation is essential for its successful implementationHowever, it also points out that existing initiatives need to be better coordinated and focused on supporting developing countriesto ensure the achievement of the goals of the Paris Agreement. The full document is available here

The 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), known as COP29, adopted decisions on the implementation of Article 6 of the Paris Agreement. After almost a decade of negotiations, COP29 laid the foundations for an effective global carbon market that includes all Parties to the Paris Agreement and mandated the technical body responsible for Article 6.4 to effectively implement these standards. It also enhanced the mechanisms under Article 6.2, which will now be monitored by the UNFCCC Secretariat.

The COP29 conference took place from 11 to 22 November in Baku, Azerbaijan, and focused on multilateral negotiations on the mechanisms defined in Article 6 of the Paris Agreement. These mechanisms include: (i) a centralized market under Article 6.4 for trading emission reduction credits (A6.4ERs), to be managed by a designated supervisory authority; and (ii) Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6.2, which will enable countries to achieve climate goals through bilateral or multilateral agreements.

Key results

Article 6.4 of the Paris Agreement

A new framework for Article 6.4 was adopted at COP29, building on the previous standards of the Supervisory Authority and introducing stricter requirements for the removal of emissions and the methodology for their reduction or removal. The Supervisory Authority is now tasked with further developing and implementing these standards.

The adopted guidelines include:

1. Monitoring and reporting requirements that must be based on robust and conservative measurements and supported by thorough reporting.

2. Post-loan monitoring, which is required after the end of each loan period.

3. Accounting for reductions through net change in greenhouse gas storage and emissions.

4. Assessment of the risk of reversal, based on which participants must have a risk mitigation plan in place.

5. Quick cancellation notification in case of any changes.

6. Establishment of a reversal risk reserve account.

Social and environmental safeguards and the rights of indigenous peoples are also taken into account.

Article 6.2 of the Paris Agreement

The conference also clarified authorization, which covers cooperative approaches, ITMOs and participating entities, and introduced a new framework for transparency and disclosure of information on approved ITMOs. The UNFCCC Secretariat is responsible for monitoring compliance with the statutes, although sanctions for non-compliance are not yet established.

Next steps

The COP29 decisions strengthen the functioning of the mechanisms under Articles 6.2 and 6.4, while the main technical work on their implementation is still ongoing. The responsibility now lies with the Supervisory Body and the UNFCCC Secretariat to ensure the proper implementation and monitoring of these standards. Further discussions are expected, which could take place during future meetings of the subsidiary bodies and the UNFCCC conference in 2025. Spring

This document presents a proposal for a Regulation of the European Parliament and of the Council establishing a Union framework for the certification of permanent carbon removal, carbon management and carbon storage in products. The main objective of this Regulation is to support the achievement of EU climate goals in accordance with The Paris Agreement, through:

• Increases in carbon removal from the atmosphere,
• Reductions in emissions from soil,
• Support for sustainable practices in agriculture and forestry.

The regulation introduces voluntary certification systemwhich is to ensure transparency and credibility activities aimed at carbon removal. At the same time, it has prevent greenwashing, i.e. false claims about ecological sustainability.

Key points of the regulation:

• Definitions: The regulation clearly defines terms such as "permanent carbon removal", "carbon economy", "carbon storage in products", "operator" and others.
• Eligibility criteria: Activities eligible for certification must meet the following criteria:
  • Quantification: Carbon removal and emission reduction from land must be quantified accurately and reliably.
  • Additionality: Activities must go beyond existing legal requirements and be financially viable through certification.
  • Storage, monitoring and accountability: Operators must ensure long-term carbon storage, monitor risks of leakage and be held accountable for any leaks.
  • Sustainability: Activities must not have a negative impact on the environment and must benefit sustainability goals such as climate change mitigation, biodiversity protection, etc.
• Certification methodology: The European Commission will develop detailed methodological guidelines for different types of carbon removal activities.
• Certification: Certification is carried out by independent certification bodies accredited by national authorities.
• Certification schemes: Operators must participate in certification schemes that must be transparent and reliable.
• Registers: The European Commission will establish a Union carbon removal registry to track certified units and prevent double counting.
• Recognition of certification schemes: Only schemes recognised by the European Commission can be used to demonstrate compliance with the Regulation.
• Reporting: Certification schemes must regularly report on their activities to the European Commission.

The regulation further establishes a review and amendment process, as well as a process for the delegation of powers.

Permanent carbon removal refers to human activity that removes CO ₂ removed from the atmosphere and stored safely and permanently for centuries. Some examples:

The annexes to the regulation provide detailed information on the elements of the certification methodology and the minimum content of certificates. You can download the document here.

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