Baku and Brazil, Tuesday, 12 November 2024.
🇦🇿 On the first day of COP 29, negotiators reached a consensus on the standards for the creation of carbon credits, under Article 6.4 of the Paris Agreement.
However, the parties must still debate and seek consensus on several other outstanding issues related to Article 6, for example Article 6.2 which establishes the framework for bilateral carbon trading between countries.
The official press release on the COP29 portal states, among others:
(1) What is Article 6 and why is it important?
Article 6 of the Paris Agreement structures carbon markets as an important investment channel for developing countries.
Establishes and explains the objectives of the mechanism, supervised by a designated supervisory body.
Its full operation will allow for both greater cost effectiveness and greater mitigation and adaptation ambitions in Nationally Determined Contributions (NDC).
According to IETA - International Emissions Trading Association - Article 6 carbon markets represent a potential saving of around US$250 billion annually in terms of the costs of implementing countries' NDCs.
(2) What was agreed on the 1st day of COP 29?
Among all the provisions of Article 6, specifically Article 6.4 was approved.
This standard part will ensure that the international carbon market is high integrity, and that emissions reductions and removals are real, additional, verified and measurable.
The standards of article 6.4 agreed on this 1st day of COP 29 may still be enhanced by the negotiators, who have been dealing with the topic since October with direct support from the COP29 Presidency.
(3) What are the next steps?
Deal with the other parts of Article 6, as you can see here. This includes Article 6.2 and the final elements of Article 6.4.
Once these negotiations are concluded, the COP29 Presidency will encourage the adoption of Article 6 carbon trading so that countries can realize its potential benefits.
Click on the image below for the full and official press release.
🇧🇷 In Brazil, the bill to create the national Carbon Market was included on the agenda today, November 12th. An Ordinary Deliberative Session is indicated, with discussion in a single shift. Let’s see.
We take the opportunity to highlight three more amendments submitted at the last minute (until the closing of this edition), in addition to those that we previously reported. They are:
Article 1 (Preliminary provisions)
Exclusion of some advanced renewable fuels from the scope of the law, so as not to burden transition efforts already underway (RO);
Article 2 (Initial considerations)
Adds retention to the concept of carbon credits, as one of the possibilities for generating credits, in addition to reduction and removal of GHG (PB);
Article 28 (Allocation of SBCE resources)
Exclusion of the indicated time limitation (MS);
Article 30 (Operators and installations subject to SBCE regulation)
Adequacy of the definition and applicability to waste treatment and final disposal units (SE);
Article 37 (Penalties under the SBCE)
That the fines are proportional to the obligations not fulfilled or to the economic gains obtained by the offender (MS);
Article 51 (Final and Transitional Provisions)
On defining the percentage of CRVEs (Certificate of Verified Emission Reduction or Removal) for annual international transfers throughout the project generation period (SC);
Others
New article: Favoring the registration of methodologies already accredited in the Kyoto Protocol and the Paris Agreement (PA);
Articles 4, 5 and 24: Better harmonization with the Renovabio program, considering the sectors already regulated, resulting in lower costs for society and greater alignment with the Brazilian NDC (PB);
Articles 4 and 30: To consider direct and indirect emissions in greenhouse gas measurement methodologies (PA);
Articles 6, 8, 10 and 23: Recommendations regarding the segregation of strategic direction, regulation and operation roles (PA);
Busy days and times for carbon credit markets.
