6th week Carbon Credit Markets 2025. NDC, ETS2, CBAM, IASB, ISSB, Carbon Asset Tracking System, IGES, UNFCCC, Article 6, Carbon Credits in Brasil, Peru, Pakistan, Indonesia, CDP and Coty, SBTi, FSA®.
- Art Dam
- Feb 17
- 8 min read
Monday, 17 February 2025.
Among the main recent news, the updates of the NDCs - Singapore, Marshall Islands, Zimbabwe and Canada - stand out, despite 95% of countries being behind. Germany adopted ETS 2 and established national provisions for the implementation of CBAM. Improvements to the World Bank's Carbon Asset Tracking System and climate issues and other uncertainties in financial statements addressed by the IASB and ISSB are important topics. The cooperation between IGES and UNFCCC under Article 6 and the registration mechanism for Article 6.4, with a cost comparison, are other news of interest. In Brazil, the initiative "Support to the Federal Government through the analysis of a Carbon market framework in Brazil" stands out. In Peru, the government recognized two Verra methodologies, while Pakistan published guidelines for the carbon market and in Indonesia the Financial Authority discusses carbon credits. Regarding companies, Coty increased its CDP Climate score from B to A-. And take note: on April 10, 2025, the Critical Materials Forum will take place in Chile. SBTi reviews the Corporate Net-Zero Standard and invites experts, while the IFRS Foundation promotes the FSA® credential. 🔔 This is a summary of today's topics for your reading at CarbonCreditMarkets.com
CLIMATE GOVERNANCE
Updates to NDCs, Nationally Determined Contributions. About 95% of countries are behind.
In the last few days, 4 more countries have released their updates. Until last week, Carbon Credit Markets had already reported around 10 countries that had met the deadline, including Brazil, the United States, the United Arab Emirates, Uruguay, Switzerland, the United Kingdom, New Zealand, Andorra, Ecuador and Saint Lucia. Regarding these respective NDCs, with special reference to Article 6, see our previous weekly posts. The expected deadline for the approximately 170 signatory countries of the Paris Agreement to send new NDCs was February 10, 2025. Regarding these 4 most recent ones, we highlight:
Singapore: “Intends to use internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement towards Singapore’s 2nd NDC. … led initiatives to strengthen trust and confidence in carbon markets, to mobilise greater flows of private investment … This includes the establishment of the Climate Action Data Trust (CAD Trust), in partnership with the World Bank and the International Emissions Trading Association. CAD Trust syncs up data across carbon crediting registries, and publishes this data at no cost on its online platform as a public good that enhances transparency in markets. Singapore is also working with Gold Standard and Verra to develop an Article 6 Crediting Protocol, to help other Parties under the Paris Agreement more easily participate in Article 6 cooperative approaches.”
Marshall Islands: “While RMI <Republic of the Marshall Islands> does not currently envisage making use of Article 6 mechanisms, RMI does not exclude the possibility of making use of these mechanisms.” NDC below for download. Worth reading.
Zimbabwe: Um Carbon Trading Framework foi regulamentado em 2023. “Forests hold significant potential for emissions reduction through development of carbon projects. The country developed its first Forest Reference Emission Level with an intention to participate in results-based payment schemes. Plans are in place to develop a jurisdictional REDD+ programme which will aid in emission reductions.”
Canada: “Le Canada continuera d’explorer l’utilisation possible d’approches coopératives en vertu de l’article 6 de l’Accord de Paris comme moyen d’aider à atteindre les cibles du Canada tout en soutenant le développement durable à l’étranger et en renforçant la coopération internationale. Si le Canada s’engage dans des approches coopératives, il mettra en œuvre les règles et les orientations établies en vertu de l’article 6 de l’Accord de Paris afin de garantir une comptabilité solide, l’intégrité environnementale, la transparence et l’absence de double comptage. En date de février 2025, le Canada n’a pas encore conclu d’accord pour utiliser les RATI au titre de l’article 6 relatif à la CDN en vertu de l’article 4 de l’Accord de Paris.”
Germany adopts Emissions Trading System 2 (ETS 2) and establishes national CBAM implementation provisions
On January 31, 2025, the German Bundestag approved an amendment to the Greenhouse Gas Emissions Trading Act (Treibhausgas-Emissionshandelsgesetz), incorporating new European Union regulations on emissions trading systems into national legislation. This system will replace Germany's national emissions trading system (nEHS), which has been operating since 2021. ETS 2, which is scheduled to come into effect in 2027 (or 2028, under certain conditions), will mainly cover the transport and buildings sectors. For example the maritime sector will be included gradually, with 40% of emissions covered in 2024, 70% in 2025 and 100% in 2026. The aviation sector will also have reductions in permitted emissions, as well as new reporting obligations for "non-CO2 effects". The European Carbon Border Adjustment Mechanism (CBAM), which prices CO2 emissions from certain energy-intensive imports, was also discussed. CBAM payment obligations will begin on January 1, 2026. Below is a link to the official press release (in German).
IASB, ISSB, climate issues and other uncertainties in financial statements
On February 19, 2025, a joint meeting will take place to discuss these uncertainties in more detail. The meeting will be based on the presentation of feedback from stakeholders, which highlighted the need for consistent and practical approaches to dealing with these uncertainties. The main focus will be on how to improve understanding and communication of financial risks associated with climate, ensuring transparency and clarity in financial statements. In July 2024, the IASB proposed examples to illustrate how companies apply IFRS Accounting Standards when reporting the effects of climate and other uncertainties in their financial statements. Remember our article about it here.
CARBON CREDITS
Improvements to the World Bank's Carbon Asset Tracking System
The World Bank has released an enhanced version of its Carbon Asset Tracking System (CATS). The new CATS 2.0 dashboard introduces important improvements to align with international compliance frameworks such as Article 6 of the Paris Agreement, while supporting the bank's own new emissions reduction programs and initiatives. The CATS platform now integrates services for funds managed by the World Bank Climate Change Group, including FCPF, ISFL, TCAF, Ci-Dev and SCALE. Read more in an article on the Forest Carbon Partnership Facility portal, managed by the World Bank.
Registration mechanism for Article 6.4 and extensive cost comparison
The matter was discussed at the 15th meeting of the Article 6.4 Supervisory Board, held in Bhutan between February 11 and 14. Here's a summary:
Real-time public information
Types of accounts according to guidance 7/CMA.4 and opened upon approval of the respective countries (relevant Parties)
Multiple accounts allowed, specific conditions for suspension, reactivation and termination
Serial numbers assigned by country, year and activity
KYC provisions under development to mitigate risks
Ownership, security issues, terms and conditions still under development
A6.4 Registration Fees, account opening $500 and annual maintenance: $400
PS1: Penultimate slide with a table comparing the costs of Gold Standard, Verra, Universal Carbon Registry, Global Carbon Council, ACR Winrock, Puro Earth, Climate Action Reserve and CTX.
PS2: Last slide with an interesting flowchart
IGES, UNFCCC and Article 6
The Institute for Global Environmental Strategies (IGES) and the UNFCCC Secretariat have formalized cooperation that establishes a strategic partnership to strengthen capacity building and support the implementation of Article 6 of the Paris Agreement. The collaboration will focus on developing high-integrity carbon markets and promoting ambitious climate action through the Article 6 Implementation Partnership (A6IP).
Key Areas of Cooperation include:
Strengthening Training and Knowledge Sharing
Mobilization of Resources and Technical Support
Promoting Collaborative Efforts
Brazil and “Support to the Federal Government through the analysis of a Carbon market framework in Brazil”
ICC Brasil and WayCarbon, in collaboration with UK PACT Brasil, launched this first technical report. The document provides subsidies for the regulation of the Brazilian Emissions Trading System (SBCE), with an emphasis on the integration of carbon credits as a compensation mechanism. Click here to read a little more and access the report.
Peru, government recognizes two Verra methodologies
The government of Peru has officially recognized Verra's Verified Carbon Standard (VCS) Program and two of its methodologies, VM0047 and VM0048, as eligible mechanisms for the certification of carbon credits. This will allow VCS-certified projects to be registered in Peru's National Registry of Mitigation Measures (RENAMI). This approval strengthens Peru's ability to use carbon markets, especially nature-based approaches, to advance its climate goals and benefit the local communities that manage these lands. Read more in Verra's press release.
Pakistan publishes guidelines for carbon market
Pakistan recently published its regulatory framework for voluntary and compliance carbon market activities, seeking economic and social benefits. Aiming to ensure environmental integrity and transparency in activities, these guidelines focus on attracting investments and boosting climate actions, aligning with best international practices and Article 6 of the Paris Agreement. Countries such as Singapore, Norway, Switzerland and South Korea have already shown interest.
In 2022, Pakistan faced large-scale devastating droughts and floods. First, a severe heat wave - of intensity that would occur only once every 1000 years - with temperatures continually above 45°C, resulting in crop failures, blackouts and forest fires. Then came the unprecedented monsoon rains, the most intense and concentrated on record.
World Bank report highlights that Pakistan will need around $348 billion in investments by 2030 to address climate and development challenges.
Indonesia, Carbon Credits, Financial Authority
According to the Indonesia Financial Services Authority (OJK), since the launch of the Indonesian Carbon Exchange on September 26, 2023 until December 30, 2024, the accumulated value traded reached IDR 50.65 billion, relating to a total volume of 908,018 tCO2e. According to OJK, in addition to the enormous amount of carbon units that the country can generate, the great potential of the Indonesian Carbon Exchange is reflected in the 4,118 stakeholders on the basis of the National Registry System for Climate Change Control (SRN PPI). Here is OKJ's monthly infographic.
CORPORATE
Coty increased its CDP Climate score from B to A-
Thanks to strong cross-functional collaboration and team efforts, in 2024 Coty managed to increase its CDP Climate Change score, in addition to publishing its CDP Water Security and Forests rankings for the first time. CDP is the main global disclosure system that evaluates companies on their management of environmental impacts. Click here for the press release and here for the "Beauty that Lasts" Sustainability Report.
OPPORTUNITIES
SBTi reviewing its Corporate Net-Zero Standard and inviting experts
SBTi announced this week that it will seek additional stakeholder feedback on its Corporate Net-Zero Standard. With the aim of making it more effective and actionable, a second public consultation will be held and new expert working groups will be formed, focusing on the following five main themes:
Scope 2 (purchased electricity)
Scope 3
Removals
Ongoing emissions and Beyond Value Chain Mitigation (BVCM) activities
Quality, guarantee of data and reports
Public consultation will be launched around March 2025, and experts can register until February 28, 2025. Follow along.
FSA® credential, developed by the IFRS Foundation.
The credential aims to provide a fundamental understanding of the relationship between sustainability information and a company's ability to create value. The registration period for the Level I exam is still open. Candidates who pass the Level I exam receive exclusive benefits such as discounts at the IFRS Foundation Symposium, access to an exclusive LinkedIn group and recognition in the FSA Directory. More than 8,000 professionals from 86 jurisdictions have signed up for the FSA Credential. Interested? Click here.
EVENTS
April 10, 2025, Critical Materials Forum, Chile
The event taking place during CESCO Week Santiago 2025, with the support of the Comisión Chilena del Cobre, will present analyzes on developments and future perspectives for copper, lithium and rare earths markets. Topics to be discussed include opportunities for copper in electric vehicle markets, impact of electric car markets on the lithium industry, and market trends for rare earths. Participants from various countries, consumers of raw materials for batteries, producers, specialized traders, governments and service providers. Click here for more details and registration.
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