# Carbonaires — Full Site Content > London-based carbon finance specialists delivering high-integrity carbon removal. ## Company Overview Carbonaires is a carbon finance company headquartered in London, UK (Moray House, 23-35 Great Titchfield Street, London W1W 7PA). We specialise in high-integrity carbon removal credits, carbon finance structuring, and technology platforms for carbon market participants. ## Core Services ### Carbon Removal Credit Sales Carbonaires sources and delivers verified, high-integrity carbon removal credits to organisations. We help buyers build diversified carbon credit portfolios with expert guidance on credit quality, verification standards, and impact measurement. Our credits cover a range of removal methodologies including biochar, enhanced weathering, direct air capture, and nature-based solutions. [Learn more](https://carbonaires.com/carbon-removal) ### Carbon Finance We structure financial instruments and solutions for carbon removal projects and credit portfolios. Our carbon finance team brings deep experience in project finance, structured products, and carbon market dynamics to help project developers and investors unlock capital for high-integrity removal projects. [Learn more](https://carbonaires.com/finance) ### Technology Platform Our AI-powered technology platform provides tools for carbon credit verification, portfolio management, policy tracking, and market analysis. The platform helps corporates, investors, and project developers make informed decisions in the carbon markets. [Learn more](https://carbonaires.com/technology) ### Roadmapr Roadmapr is our net-zero planning and carbon accounting platform designed for CFOs and finance teams. It helps organisations manage their climate risk, track emissions, model net-zero pathways, and comply with climate disclosure requirements. [Learn more](https://carbonaires.com/roadmapr) ## Key Pages - [Home](https://carbonaires.com) - [Technology](https://carbonaires.com/technology) - [Finance](https://carbonaires.com/finance) - [Carbon Removal](https://carbonaires.com/carbon-removal) - [About](https://carbonaires.com/about) - [News & Media](https://carbonaires.com/news-media) - [Events](https://carbonaires.com/events) - [Contact Us](https://carbonaires.com/contact-us) - [Submit Projects](https://carbonaires.com/submit-projects) - [General Inquiry](https://carbonaires.com/general-inquiry) - [Submit RFP](https://carbonaires.com/submit-rfp) - [Partnership Proposal](https://carbonaires.com/partnership-proposal) - [Book a Demo](https://carbonaires.com/book-demo) - [Newsletter Signup](https://carbonaires.com/newsletter-signup) - [Roadmapr](https://carbonaires.com/roadmapr) ## Our Team ### Ahmet Douas — Business Development Advisor With over 15 years of commercial experience globally in shipping, commodity trading and technology, Ahmet joined Carbonaires to spearhead commercial efforts around our carbon removal credit sales and decarbonisation services ### Alison Barto — Chief Partnerships Officer Before joining Carbonaires, Alison held several pivotal roles at HSBC. Among her key responsibilities was serving as the bank's Global Chief Procurement Officer, where she managed an annual spend of $15 billion. After her tenure as CPO, Alison advanced to HSBC Corporate Banking, stepping into the position of Regional Director for Northern UK. Her last role at HSBC was as the Head of Government Funding, orchestrating the bank's response to the Covid loan challenge. As one of HSBC's most senior female leaders, Alison melds a robust understanding of procurement with a nuanced grasp of financial services products. In her current role, Alison chairs the Chartered Institute of Procurement and Supply (CIPS), actively influencing the global procurement landscape and endorsing best practices. She also remains a fervent advocate for the Sustainable Procurement Pledge. ### Elodie Broad — Chief of Staff Elodie brings over a decade of experience at the intersection of strategy, sustainability, and innovation. Before joining Carbonaires, she was the first Head of Sustainability at European VC firm Balderton Capital, where she built and led the sustainability function and partnered with more than 100 portfolio companies to help them grow responsibly. She began her career at Deloitte, working across the London and Sydney offices on corporate strategy, public policy design, and large-scale program delivery. Over time, she developed a focus on ESG strategy and sustainable finance, advising both private and public sector clients on how to embed sustainability into decision-making and long-term value creation. ### Erdem Celik — Co-Founder, Partner, Technology Erdem has more than 25 years' experience driving business expansion and digital transformation within world-class tech companies. His global business experience as Head of Media Buying Solutions, as well as Head of Sales managing +150 M USD businesses at Google and Facebook, provides a far reaching and extensive network. The team's start-up lead, alongside his role at Carbonaires, he is a seasoned investor and entrepreneur. Erdem is renowned for providing fresh and innovative solutions across the digital world, as a ground-breaking visionary with a practical and commercial talent for flawless execution. Currently, Erdem is serving as a founding partner at Carbonaires with his evolving passion for sustainability and pivotal intuitions on the global net-zero transition. He contributes largely to our team through his provision of a wealth of experience and knowledge in business development. ### Jerome Ryan — Head of US Operations, Chief Risk and Compliance Officer Jerome joins our leadership team from BDO USA, LLP where he was Managing Director Forensics. He has 20+ years of leadership roles in global risk management and resilience across diverse industries. His expertise is robust internal controls and technology solutions, optimising processes, improving efficiencies and elevating internal rates of return (IRR) on investment. With a strong corporate and consulting background in Fortune 500 companies, Jerome has a track record of meeting stringent cross-sector regulatory requirements. He actively contributes to public service through roles on the Board of Directors for Disaster and Recovery Institute International and a high school mentorship program in New York City. ### Jessica Leigh — Lead, Nature-based Solutions Jessica is an Imperial College London graduate with a Master's degree in Applied Biosciences and Biotechnology and a Bachelor's degree in Biological Sciences. With a keen interest in the biological impacts of nature-based solutions and carbon sequestration strategies, she applies her expertise to the Voluntary Carbon Market. She is responsible for detailed due diligence of nature-based carbon sequestration projects and analysis of their long-term environmental and financial implications. Jessica evaluates and conducts in-depth assessments of technological support to enhance the scalability and effectiveness of such projects. Driven by her passion for nature's role in sustainable carbon sequestration, she aims to translate scientific principles into meaningful insights and solutions for a more sustainable planet. ### Marika Niekowal — Policy Manager Marika has a background in Environmental Economics and Policy from Imperial College London and leads climate policy at Carbonaires. In her role, she works across both the demand and supply sides of the carbon market -covering voluntary, compliance, and Article 6 mechanisms. Her work focuses on advising public and private entities on carbon market strategy, policy development, and the credible integration of carbon credits into corporate decarbonisation strategies. She is particularly passionate about leveraging carbon markets as a tool to scale climate finance, ensuring environmental integrity while enabling global emissions reduction and removal at scale. ### Martyn Porter — Co-Founder, Partner, Finance & Investor Relations Martyn enjoyed a successful 28-year career in international banking and financial services with HSBC across Asia-Pacific and EMEA. Throughout his career he built professional skill sets for global financial management and risk analysis. Among his roles, Martyn served as CEO of HSBC Private Bank Monaco and Luxembourg, overseeing more than US$12 bn AuM; COO Vietnam; and CEO and GM roles at AMCA. His outstanding leadership skills and extensive networks make him an ambassador for his industry with the highest degree of integrity. He is known for his strong people management, strategic transformation, profit optimisation and robust board-room experience in corporate governance and compliance. ### Michael Spenley — Co-Founder, Partner, Carbon & ESG Michael Spenley has been a passionate advocate of ethical business and corporate sustainability for more than 25 years. Michael has served as chair, NED and consultant to the United Nations Global Compact Network UK and prior to co-founding Carbonaires he worked as an advisor to high growth startups and companies with a combined annual turnover of $10 billion. ### Nadja Vitorovic — Lead, Engineered Solutions Nadja is a physics graduate from the University of St Andrews, who recently completed an MSc in Environmental Technology at Imperial College London focusing on the Global Environmental Change and Policy option. She contributes to Carbonaires' technical due diligence of engineered solutions and the development of the Carbonaires Intelligence platform and technology strategy. Nadja is driven by her passion for accelerating global efforts towards a green future. ### Professor Niall Mac Dowell, FRSC — Chief Science Advisor Niall brings over a decade of consulting experience serving public and private sectors. He is Professor of Energy Systems Engineering at Imperial College London, a Chartered Engineer and Fellow of both the IChemE and the Royal Society of Chemistry. Recognised as an authority on carbon capture and storage, he has authored more than 150 peer-reviewed papers. Niall contributes to technical working groups within the Zero Emissions Platform and the Carbon Capture and Storage Association, and has received awards including the Qatar Petroleum medal and the IChemE's Nicklin and Junior Moulton medals. ### Peter McKee — Chief Financial Officer Peter is an experienced and purpose-driven Chief Financial Officer with more than 20 years of finance and operational expertise. His career started at Arthur Andersen in Business Assurance and he later joined PwC's Transaction Services and Corporate Finance teams. Over the past decade Peter has focused on the commodities and financial services sectors. As Group Finance Director of the Spectron Group he steered the divestment and exit of the business to a private equity firm. After the sale, he held several roles at Marex including Head of Corporate Treasury, Chief Financial Officer of Professional Trading Services and Head of Strategy. ### Philip Jackson — Head of Tech Strategy and Execution Philip joined Carbonaires from Arrival, the UK electric vehicle technology company, and previously worked in Aston Martin’s Special Vehicles division. With extensive CleanTech experience leading cross-functional, multinational teams, he leads our technology efforts, delivering the platform that underpins investment decision-making and developing AI products that help businesses of all sizes start and scale climate action. He also heads our engineered solutions stream, leading technical due diligence and delivery on engineering projects while serving as an advisor to Google's Startups for Sustainable Development program. ### Rasih Ozturkmen — Co-Founder, Managing Partner Rasih is a tenacious entrepreneur and cool-headed decision maker with a natural talent for trading. Having held senior roles with organisations including HSBC and Li & Fung - which saw him head up the exports function in New York for HSBC - Rasih invests in and runs businesses in New York, Hong Kong and London. With a track record in the industrial services sector, he has overseen teams of 500 people and managed US$500 million turnovers. Rasih is a member of the Young Presidents' Organisation (YPO) and brings a wealth of experience to Carbonaires. ### Rebecca Walker — Head of Environmental Strategy and Execution Rebecca holds a Master's degree in Environmental Sustainability from the University of Edinburgh, where her dissertation explored how climate change and extreme environmental behaviours are represented within society. She has a strong commitment to sustainability and a deep understanding of what practical implementation of ethical business practices in global corporations requires. Rebecca has a proven track record of navigating corporate commercial targets while enabling and driving practical, achievable green goals. Her background in fast-paced, multi-cultural business environments and expertise in sustainable supply chains informs Carbonaires' values of transparency and net-zero transition. ### Samuel Burke — Senior Manager, Structuring Samuel holds an MSc in Climate Change from University College London and a BSc in Geography from the University of Leeds. Bringing energy and enthusiasm, he happily juggles multiple responsibilities at Carbonaires. A numbers person at heart, Samuel focuses on financial modelling to find the best commercial returns from carbon-market transactions. An advocate for the Voluntary Carbon Market, he works tirelessly to find commercial solutions with innovation at the heart of everything he does. ### Dr. Sascha Roest-Ellis, DPhil — Head of Science Sascha is an Earth Scientist who holds a Ph.D in carbon geochemistry from the University of Oxford and an MSc in Geoscience. Her thesis focused on understanding how environment-ocean chemistry and climate influenced mineralisation pathways and sediments, with specific focus on the carbon and phosphorous cycles. She also collaborated with scientists at Stanford University's synchrotron (SSRL) and the International Centre for Carbonate Reservoirs (ICCR) and trained with the Natural Environment Research Centre for Doctoral Training (NERC CDT). At Carbonaires, Sascha is the Head of Science, where she ensures the scientific assessments of nature-based, engineered and hybrid carbon removal (CDR) approaches are robust and evidence-based. Sascha is a focal point for developing collaborations with scientific communities and suppliers to drive innovation and maximise both climate impact and scientific integrity. Sascha previously worked in strategy consulting at ZS Associates and has experience in the energy sector. Her unique combination of scientific expertise and commercial strategy enables her to drive, shape, and communicate Carbonaires scientific strategies. ### Tilda Benezra — Head of Projects Tilda is an accomplished land and real estate professional with a strong network in Turkey, the USA, the Gulf and throughout Africa. In her spare time, she also runs a fruit farm. With her strategic insights and drive for success, she helps open doors, create opportunities and propels Carbonaires portfolio of assets forward. Tilda's eye for detail, entrepreneurial vision and energy is an exceptional advantage. She is also the team adventurer and the one of us most likely to be found climbing a notable mountain or exploring a rainforest when on vacation. ## Advisory Board ### Anna-Marie Slot Anna-Marie was named Most Innovative Sustainability Lawyer of the Year 2021 by the Financial Times. She's a Partner at Ashurst, a leading multinational law firm and trusted advisor to corporates, financial institutions and governments worldwide. An exceptional senior deal lawyer with global reach and stellar connections and a pathfinder in the field of sustainability law. As well as leading sustainability for Ashurst, she is Ashurst's Global Head of High Yield. Prior to joining Ashurst, Anna-Marie was a Partner at White & Case. ### Professor George Jackson, FRS George is a world leading scientist and Fellow of the Royal Society. He is Professor of Chemical Physics at Imperial College London. George has received many awards for his work including the Rossini Award and Guggenheim medal. He leads the world in the thermodynamic properties of complex fluid and is one of the spiritual fathers of the statistical associating fluid theory (SAFT). His work and leadership places him at the forefront of Molecular Systems Engineering and carbon capture. ### Kristine Rea Kristine is an inspirational, intuitive, and momentum-focused global leader in the management and optimisation of leadership. Now working in private equity after time spent in consulting, for the prior 16 years she was in clinical psychology practice, providing executive coaching and psychotherapy for leaders and executives. She worked at YSC, part of Accenture, in their private equity leadership strategy practice in Hong Kong and NYC, leading talent and leadership development for numerous global large-cap and mid-cap private equity firms. Kristine played a pivotal role as a member of the APAC private equity leadership team significantly contributing to the strategic expansion and growth of the private equity business. She is currently the Chief Talent Officer at Energy Capital Partners, leading their talent and leadership development in-house and across portfolio companies. ### Matthias Stausberg A globally renowned expert in his field, Matthias advises Sir Richard Branson and the Virgin Group on public advocacy across a broad portfolio of global issues including climate action and human rights. He also works closely with Virgin Group companies around the world, developing strategies and programmes to translate advocacy into tangible corporate engagement. Matthias joined Virgin in 2012, after a decade at the United Nations Global Compact, the world's largest corporate sustainability initiative. As Spokesperson and Head of Public Affairs, he was a tireless campaigner for more responsible business practices around the world. Matthias is both a Fulbright scholar and a German National Merit scholar. ### Roberto Croci Roberto is an investor, innovator, connector, creative leader and startup advisor. Having worked as EMEA Emerging Markets Regional Head for Google Marketing Platforms and the Managing Director of Microsoft for Startups in the Middle East and Africa region, Roberto's passion lies in innovation, startups and people. He was nominated as the 'Best Googler Inspiring Hero' in 2016. Currently Roberto acts as the Director of Value Creation & Transformation at Public Investment Fund (PIF). ## Events ### Role of Carbon Markets in Credible Net-Zero Strategies (2026-04-14) [Event page](https://carbonaires.com/events/xynteo-carbon-markets-net-zero-barbican-2026) ##### About the Evening Carbon markets are gaining significant momentum as regulatory frameworks tighten, voluntary commitments deepen, and new market mechanisms emerge. But for many businesses, the path from ambition to action remains unclear. Join Xynteo and Carbonaires for an evening of focused discussion on what's changing in carbon markets, why timing matters now, and how companies are moving from intent to implementation. ##### What the Evening Includes - Setting the scene — framing the current state of carbon markets and the evolving regulatory landscape - Panel discussion — hear from corporate and market practitioners on real-world strategies for integrating carbon credits into credible net-zero pathways - Practical takeaways — actionable insights on navigating market mechanisms, selecting quality credits, and building stakeholder confidence ##### Networking & Refreshments The evening will conclude with networking and refreshments — an opportunity to connect with peers, practitioners, and thought leaders working at the intersection of carbon markets and corporate sustainability. ## Published Articles ### Carbonaires and Xynteo Join Forces to Support Organisations Navigating the Growing Demand for High-Quality Carbon Credits (2026-03-05) [Read on website](https://carbonaires.com/news-media/carbonaires-and-xynteo-join-forces-to-support-organisations-navigating-the-growing-demand-for-high-quality-carbon-credits) #### Partnership Announcement PRESS RELEASE: 5 MARCH 2026, LONDON, UNITED KINGDOM Carbonaires and Xynteo announce a strategic partnership to support organisations engaging with high-quality carbon markets, integrating strategic sustainability advisory with deep carbon market and asset expertise to enable rigorous, practical decision-making and execution. The partnership brings together Xynteo's long-standing experience in strategic sustainability advisory and implementation expertise with Carbonaires' specialised capabilities in high-integrity carbon assets, project due diligence, and offtake & project finance structuring. Together, the organisations will support clients across carbon market cycle — combining technology, finance, and design-led approaches with a shared focus on quality, integrity, and real-world impact. > Carbon markets are a critical component for many organisations' climate transitions. By partnering with Carbonaires, we combine complementary capabilities to help organisations move from carbon market strategy to confident, practical execution. > — Rasmus Lundsgaard Nielsen, Partner and CEO, Xynteo #### Complementary Expertise Carbonaires brings deep expertise in assessing and managing carbon assets to help buyers and institutions navigate the evolving voluntary carbon markets. Xynteo contributes over two decades of strategic advisory experience across sustainability challenges, helping organisations integrate carbon markets into broader transition and value-creation strategies. > Working with Xynteo strengthens our ability to unlock practical solutions for high-quality carbon offtake and finance. Together, we combine rigorous carbon asset expertise with strategic frameworks to help organisations invest in and scale credible removals. > — Rasih Ozturkmen, Co-Founder and Managing Partner, Carbonaires #### Addressing Market Challenges Uncertainty around carbon credit quality and the complexity of market mechanisms have historically challenged organisations seeking to deploy capital with confidence. By aligning strategic advisory and rigorous carbon market expertise, the Xynteo–Carbonaires collaboration aims to provide clients with both contextual strategy and detailed operational support – from initial market assessment through diligence, offtake structuring, and transaction execution. In 2026, the partnership will deliver a series of open, collaborative events and thought leadership initiatives. These sessions will be open to external participants and designed to convene corporates, financial institutions, and project developers around practical carbon market insights. #### About Carbonaires carbonaires.com is a specialist provider of carbon asset expertise, focused on ensuring high-integrity outcomes in carbon markets. With core strengths in project due diligence, offtake structuring, and credit assessment, Carbonaires helps organisations and investors navigate both voluntary and compliance carbon markets with confidence and transparency. #### About Xynteo xynteo.com is a specialist advisory firm, based in Europe and India, on a mission to help global organisations and investors accelerate sustainable impact and value creation. Xynteo combines strategic insight with deep operational, commercial, and techno-economic expertise to help clients design and implement credible, values-based strategies. #### Media Contacts ##### Carbonaires Erdem Celik, Founding Partner erdem@carbonaires.com | (44) 7740542050 ##### Xynteo Zara Khan, Marketing Business Partner zkh@xynteo.com | (91) 8939013419 ### Carbonaires delivers high-integrity carbon removals to Shoosmiths (2025-10-13) [Read on website](https://carbonaires.com/news-media/carbonaires-delivers-high-integrity-carbon-removals-to-shoosmiths) #### Introduction Carbonaires delivers high‑integrity carbon removals to Shoosmiths Carbonaires has entered into a partnership with London‑based law firm Shoosmiths, enabling the firm to effectively achieve zero net operational carbon emissions for the 2024–2025 financial year while advancing corporate access to high‑integrity carbon removal credits and decarbonisation services. The partnership combines Shoosmiths' ambition to be a low‑carbon law firm, enabling a sustainable future for their clients, communities and their people, with Carbonaires' technology and carbon expertise, supporting organisations in taking transparent, science‑based steps toward decarbonisation. #### Carbon Removal Delivery Specialist carbon advisor Carbonaires has enabled Shoosmiths to effectively achieve zero net operational carbon emissions for the 2024–2025 financial year through the purchase and retirement of durable biochar carbon removal credits. The credits were sourced from HUSK, a women‑led company operating in Cambodia and Vietnam, and are certified under the European Biochar Certification (EBC) “Carbon‑Sink Standard”, ensuring durable carbon storage for at least a century. Retired via Carbonaires' integration with Carbonplace, the process provides full digital traceability from issuance to retirement. HUSK's model, “building soil, sinking carbon, improving livelihoods”, supports smallholder farmers by improving soil health and structure, leading to improved crop yields, reduced fertiliser use and higher incomes, while delivering long‑term carbon sequestration and environmental benefits. > Our vision is to be a low carbon law firm, enabling a sustainable future for our clients, communities, and our people. This milestone reflects our commitment to reducing emissions at source whilst investing in the development of the market for removals that meet the highest standards of integrity, transparency, and long‑term impact. > — Max Finney, Senior Sustainability Manager at Shoosmiths #### Strategic Partnership This achievement marks the start of a strategic partnership combining Carbonaires' technology‑driven solutions with Shoosmiths' commitment to sustainability and innovation. > We are delighted to partner with Shoosmiths through this strategic partnership. Together, we are supporting their journey toward zero net operational emissions and helping to expand access to high‑integrity carbon removals. At Carbonaires, we focus on solutions that are based on rigorous science, certified to the highest standards, and fully transparent in their impact. > — Sascha Roest‑Ellis, Head of Science at Carbonaires > At HUSK, we are proud to deliver biochar that meets the highest standards of carbon integrity while uplifting smallholder farmers and regenerating degraded soils. Women‑led innovation has a vital role to play in shaping a more equitable and resilient future, and we're excited to see companies like Shoosmiths leading with purpose. > — Heloise Buckland, HUSK Co‑Founder ### Carbonaires Joins Carbonplace to Expand Financing and Access to High‑Quality Carbon Removal Credits (2025-03-25) [Read on website](https://carbonaires.com/news-media/carbonaires-joins-carbonplace-to-expand-financing-and-access-to-high-quality-carbon-removal-credits) #### Carbonplace Partnership for Carbon Removals Carbonaires Joins Carbonplace to Expand Financing and Access to High‑Quality Carbon Removal Credits Carbonaires has partnered with Carbonplace to accelerate the growth of the carbon removal market by expanding access to its high‑integrity carbon removal credits. Through Carbonplace’s secure, bank‑grade infrastructure, this collaboration will streamline financing and connect more buyers and sellers to Carbonaires’ substantial pipeline of trusted carbon removal credits. Through this partnership, Carbonaires’ carbon removal credits will now be available on Carbonplace, offering seamless access to a broader range of institutional and corporate buyers. The collaboration enhances market reach by leveraging both companies’ complementary global networks, enabling efficient distribution of high‑quality removal credits. Both companies share a strong commitment to accelerating climate impact by promoting transparency, trust and efficiency in the carbon removal market. This partnership empowers businesses to meet their net‑zero goals by accessing credible, high‑integrity carbon removal credits, helping them deliver on their sustainability commitments. Clients will benefit from simplified transactions, as they can now access, hold and retire Carbonaires’ removal credits through Carbonplace’s multi‑registry portfolio account. The platform offers bank‑grade security, with robust settlement infrastructure and counterparty risk/know‑your‑customer (KYC) processes backed by its founding banks. Additionally, Carbonaires brings deep technical credibility to the partnership. Its credits and processes are backed by rigorous scientific, financial, procurement and risk methodologies, ensuring buyers have access to a reliable stream of high‑quality credits. Carbonaires also offers extended client support, providing a range of pre‑ and post‑execution services. This includes credit investment and procurement planning, as well as post‑execution credit monitoring and management, de‑risking the entire journey. This partnership highlights Carbonplace’s growing network of high‑impact carbon project providers and marks a significant step forward in building a more accessible and efficient carbon removal market. Together, Carbonaires and Carbonplace will drive growth and increase financial participation in the removal credit space, contributing to a more sustainable future. > Institutionalising carbon markets depends on trusted infrastructure and strong institutional partnerships. Carbonplace shares our commitment to transparency and integrity, making this collaboration a natural step toward scaling high‑quality removals for institutional buyers. > — Peter McKee, CFO of Carbonaires > We are thrilled to partner with Carbonaires to expand the reach of carbon markets and make carbon removals more accessible to a wider audience. This collaboration will drive the kind of transparency, liquidity and integrity that is critical for accelerating progress toward global climate goals. > — Scott Eaton, Chief Executive Officer of Carbonplace Find out more about Carbonaires – https://carbonaires.com/ Find out more about Carbonplace – https://carbonplace.com/ ### Innovating Carbon Finance in Uncertain Times (2025-02-04) [Read on website](https://carbonaires.com/news-media/innovating-carbon-finance-in-uncertain-times) #### Introduction Today we are seeing unprecedented change and transformation in the economic landscape. AI and Climate Change are two distinct but not completely independent themes emerging. Companies must pivot towards resilient and forward‑thinking strategies. At Carbonaires, we believe that innovation in carbon finance is not only essential for mitigating risks—it is a vital catalyst for sustainable progress. It is also an example of how businesses can participate in both megatrends. In this edition, we explore how high‑integrity carbon credits and emerging technological tools are paving the way for smarter, more secure investments. #### Understanding the Role of High‑Integrity Carbon Credits Investors and corporate decision‑makers are prioritizing reputation. High‑integrity carbon credits offer a reliable avenue for lowering investment risk while making a tangible environmental impact. At Carbonaires, our integrated approach—combining scientific rigor, technological innovation, and financial expertise—simplifies the complexities of carbon finance. We are committed to ensuring that every investment supports a verifiable path to a decarbonized economy. #### Why It Matters - Risk Mitigation: High‑integrity credits de‑risk investment portfolios by ensuring quality and transparency. - Sustainable Impact: These credits not only support net‑zero goals but also foster long‑term environmental stewardship. #### Introducing Our Upcoming Tech Tools As part of our commitment to innovation, we are excited to share that Carbonaires is on the verge of launching a suite of advanced technological tools designed to empower your sustainable investment decisions. Here’s what to expect: - Policy Tool: A tool to navigate and understand the ever‑changing carbon market policy and claims landscape. Stay on top of the latest regulatory changes and understand what they mean for you and your business. - Carbon Pricing: Gain insights on market dynamics and optimize your investment strategies with a tool that provides accurate pricing based on market and project criteria. - Portfolio Management: Streamline your approach with a tool designed to tailor a carbon credit portfolio to your criteria, ensuring your investments or credit purchases align with both your financial, environmental and impact goals. - Digital Monitoring: A tool to bring transparency and monitor the performance of a carbon credit generating project, giving confidence to your carbon credit investments and purchases. These tools are engineered to provide the transparency and agility needed to thrive in an exciting market, making sustainable finance accessible and efficient. #### A Landmark Deal Endorsed by UBS We are proud to highlight a recent milestone that underscores the effectiveness of our approach. In collaboration with leading financial institutions, including our esteemed partner UBS, Carbonaires successfully facilitated a high‑impact carbon finance deal. This transaction demonstrates the real‑world benefits of integrating scientific insight with innovative financial strategies and serves as a powerful example of how rigorous, high‑integrity processes can yield sustainable results. #### Join the Movement Towards Sustainable Investment At Carbonaires, we are committed to spreading the word. We invite you to engage with us: - Stay informed: Keep an eye out for our upcoming tech tools and more insights in the near future. - Connect with us: For more detailed information or to discuss how our solutions can benefit your organization, don’t hesitate to reach out via our contact form. Together, we can drive sustainable progress and shape a resilient, low‑carbon future. Thank you for being part of our journey. Let’s innovate, invest, and inspire change—one high‑integrity credit at a time. Carbonaires – Simplifying the journey to a decarbonized economy through science, technology, and financial expertise. ### The VCM and CDR at COP29 (2025-01-02) [Read on website](https://carbonaires.com/news-media/the-vcm-and-cdr-at-cop29) #### Introduction 2 January 2025 This year COP29 in Baku was characterized as the “Finance COP,” with the Azerbaijani Presidency prioritizing the establishment of the New Collective Quantified Goal (NCQP). The NCQP aims to define the financial commitments of developed countries to developing nations, building on the earlier $100 billion per year target set for 2020. Additionally, COP29 was intended as a "bridging COP" in preparation for the next round of Nationally Determined Contributions (NDCs) due by February 2025. Discussions also centred on the Mitigation Work Programme (MWP), which sought to advance last year’s Global Stocktake (GST) commitments, and on finalizing key elements of Articles 6.2 and 6.4 of the Paris Agreement. The latter, Article 6.4 Mechanism, is now termed the Paris Agreement Crediting Mechanism (PACM). #### Key Outcomes ##### NCQP As anticipated, the NCQP was the most contentious topic. Proposals ranged from the previous $100 billion target to over $1.3 trillion annually – an amount identified by the UN Independent High‑Level Expert Group on Climate Finance as necessary to limit global warming to below 2 °C. While early drafts referenced voluntary carbon markets as a potential funding source, these mentions were excluded from the final text. As the negotiations extended 18 hours into overtime, negotiators from the Alliance of Small Island States (AOSIS) and Least Developed Countries (LDCs) walked out of the negotiations, risking a collapse of the talks. Ultimately, they returned, and an agreement was reached for $300 billion annually until 2035, coupled with a broader commitment to mobilize $1.3 trillion from public and private sources. This “Baku to Belem” roadmap will aim to outline strategies for mobilising the higher figure, considering potential levies on emissions or voluntary carbon markets. Many Parties expressed disappointment, refusing to accept the outcome immediately after its adoption. ##### Mitigation Work Programme (MWP) The MWP aimed to build on Dubai’s GST agreement to phase down unabated coal, transition from fossil fuels, and triple renewable energy capacity by 2030. Despite these ambitions, the final text was heavily influenced by fossil groups of countries, resulting in the removal of references to fossil fuels and the 1.5 °C temperature target. Consequently, the agreement failed to translate Dubai’s commitments into actionable measures. ##### Article 6.2 Article 6.2 enables cooperative approaches between countries or private entities through bilateral agreements. Under this mechanism, financing is provided for projects in exchange for corresponding adjustments by host countries. As a decentralized mechanism, Article 6.2 lacks direct oversight from the UN, relying instead on methodologies from the VCM. Key agreements included guidance on authorisations, revocations of corresponding adjustments, establishing registries, defining first transfer, and managing inconsistencies. A significant decision for the market was that authorizations cannot be revoked after the first transfer unless specified in the T&Cs of the Letter of Authorization (LoA). However, the definition of "first transfer" can vary by host country, being either authorization, issuance, or use, introducing uncertainty, and revocation can still happen until this point. Further ambiguity surrounds the authorization of entities eligible to use Internationally Transferred Mitigation Outcomes (ITMOs). It remains unclear whether end users, such as corporations retiring credits, must be authorized, or if this applies only to project developers. The process for identifying inconsistencies in ITMOs was also deemed weak. While parties are required to address flagged inconsistencies and not use such flagged ITMOs, there are no enforcement mechanisms or consequences for not doing so. ##### Article 6.4 (Paris Agreement Crediting Mechanism – PACM) The PACM, a successor to the Clean Development Mechanism (CDM), will serve as a centralized international carbon market under UN oversight, incorporating its methodologies and processes. In an unprecedented move, the Article 6.4 Supervisory Body (SBM) finalized recommendations on methodologies and removals before COP29, hoping to avoid opening the text and political disputes during the event. On the first day of COP, the Parties acknowledged these recommendations, making the PACM operational. However, further guidance on several aspects, including methodology development, is still needed. The PACM’s first projects will involve transitioning CDM projects, with crediting expected to commence in late 2025. The SBM and its methodological expert panel face a significant workload in 2024, with 79 action items spanning methodologies, governance, and capacity building. Priority areas for methodology development are energy, waste, cookstoves, rural electrification, and transport. Methodologies will be developed on a bottom‑up basis, allowing submissions from VCM actors. This creates new opportunities for project development certified with a UN “stamp of approval.” However, concerns have been raised about the VCM's role if PACM assumes responsibilities for project approval, issuance, and registry operations. The supply of Article 6.4 Emissions Reductions (ERs) is unlikely to reach sufficient scale before 2026. #### Impacts of Article 6 on VCM and CDR ##### VCM working within Article 6.2 Under Article 6.2, the VCM plays a crucial role in facilitating transactions within the framework of cooperative approaches, which operate on a decentralized bilateral basis. The VCM has already been involved in enabling Article 6.2 transactions in practice, and it will likely continue to do so. However, the absence of direct oversight for these transactions beyond existing VCM standards necessitates a strong focus on maintaining scrutiny and integrity. In this regard, the Integrity Council for the Voluntary Carbon Market (ICVCM) and its Core Carbon Principles (CCPs) are expected to play a significant role in establishing and upholding minimum standards for these transactions. ##### Quality concerns in Article 6.2 The decentralized nature of Article 6.2 has raised concerns about the potential risks to its integrity. Unlike Article 6.4’s centralized mechanism, Article 6.2 relies on bilateral agreements, often facilitated through the VCM, without direct oversight or standards from the UN. This reliance on existing market mechanisms has sparked fears about the presence of “bad players” in the market. To address this, the VCM must continue advancing quality and integrity. Mechanisms like the ICVCM’s CCPs can provide a framework for maintaining high standards and mitigating risks. While these concerns are valid, the VCM’s ongoing efforts to improve credibility will be critical for sustaining confidence in Article 6.2. ##### Article 6.4, removals, and demand for CAs The operationalization of Article 6.4, and specifically the recommendations on removals, is a positive development for CDR, offering a UN‑endorsed “stamp of approval” that reinforces the importance of developing CDR projects. PACM will function as a centralized system running parallel to the VCM. An interesting question is whether corporates will prefer credits from PACM or those from the VCM. While PACM credits may benefit from their perceived quality assurance, ensuring robust methodologies and guidance for Article 6.4 remains essential. Another important factor is whether corporations will seek credits with corresponding adjustments under Article 6.4 or be content with Mitigation Contribution Units (MCUs), which are Article 6.4 credits without a corresponding adjustment. Corporate decarbonization and claims standards are likely to set the precedent here. Many believe that corresponding adjustments should only be required for credits purchased for compliance purposes, such as in Emissions Trading Systems (ETS) or under carbon taxes. ##### Issue of demand remains While the adoption of Article 6 represents a significant step toward increasing the supply of carbon credits, demand challenges remain. Corporates are the primary buyers in the VCM, but many remain cautious about large‑scale purchases due to uncertainties in the claims landscape. On a national level, countries such as Japan, Switzerland, Singapore, and Norway have emerged as leading buyers of ITMOs. However, many nations, including the U.K., have indicated a preference for investing in domestic mitigation efforts over purchasing ITMOs. It will be interesting to see which countries incorporate Article 6 as part of their climate strategies and how this affects global demand dynamics. ##### Implications for VCM stakeholders ##### Corporates - New Supply Streams: Article 6 introduces an additional supply source of carbon credits, offering corporates the choice between procuring credits through the VCM or the Article 6 mechanism. - Short‑Term Confusion: In the near term, corporate carbon procurement teams may face confusion regarding the differences, similarities, and applications of these two markets, necessitating education and capacity building. - Increased Competition: As Article 6 frameworks are implemented globally, a potential shortage of ITMOs could emerge, particularly for corporates seeking Article 6 credits for voluntary or compliance purposes. ##### Project developers - Expanded Certification Options: Article 6 provides an alternative avenue for project certification, requiring strategic decisions about whether to issue credits through Article 6 or the VCM. These decisions will depend on factors such as project type, host country policy, and market demand. - Compliance Opportunities: Projects certified under Article 6 and receiving corresponding adjustments may benefit from increased demand, as these credits become eligible for compliance schemes like CORSIA or Singapore’s carbon tax, offering developers a level of demand certainty. #### Overall Thoughts In the short term, the agreements under Article 6 are unlikely to bring immediate transformative impacts. Article 6.2 approaches have already gained some traction and are expected to continue at pace, while much of the infrastructure required for Article 6.4 remains under development. The primary drivers of demand – corporates and developed countries – remain unchanged. Outside of existing prominent national buyers like Japan, Singapore, and Switzerland, there has been little movement among other countries. However, the longer‑term implications are more substantial. The finalization of Article 6.4 adds credibility and momentum to carbon markets, reinforcing their role in achieving the Paris Agreement’s goals. It also lays the groundwork for the development of removals and the associated infrastructure. While there are weaknesses in the guidance, particularly around quality and enforcement, the agreements provide a solid foundation for future progress. It will be critical for the VCM to maintain its focus on integrity in Article 6.2 projects. For Article 6.4, much work remains, and while it may not be perfect from the outset, similar to the initial shortcomings of mechanisms like the EU ETS, there is hope that lessons have been learned from the failings of the CDM. A key point to emphasize is the original purpose of Article 6 in the Paris Agreement: to enhance ambition and cost‑effectiveness in meeting NDCs. NDCs are intended to function as a quasi‑compliance scheme for countries, allowing them to optimize their mitigation strategies. A well‑designed Article 6 strategy should align with a country’s holistic NDC mitigation and cost requirements, positioning it as either a buyer (likely developed countries seeking cost‑effective mitigation abroad) or a seller (developing countries leveraging the mechanism to attract climate finance for sectoral mitigation). However, significant capacity‑building efforts will be required before large‑scale implementation of Articles 6.2 and 6.4 can take place. Few countries have established Article 6 frameworks, and many are still in the process of development. This will be a critical area of focus for carbon policy in the Global South over the next several years. ##### Broader COP implications Beyond carbon markets, the outcomes of COP29 were mixed, particularly regarding climate finance. While the agreements under Article 6 were a positive development for carbon markets, progress on broader financial commitments fell short. The pledge of $300 billion annually remains far below the estimated $1.3 trillion needed each year. The effectiveness of broader market mechanisms on the “road to Belem” next year will be critical to monitor. Notably absent were concrete outcomes on adaptation and loss and damage – issues that remain severely underfunded compared to mitigation. This is especially significant given their immediate importance for addressing the pressing challenges facing the Global South. It is important to be conscious of the impact of COP from the perspective of developing countries, who were left feeling that their urgent needs were overlooked, and the financial support promised to them remains unfulfilled. ### The Pivotal Role of the Chief Risk Officer in Carbon Financing: Insights from Carbonaires CRO, Jerome Ryan (2024-12-05) [Read on website](https://carbonaires.com/news-media/the-pivotal-role-of-the-cro-in-carbon-financing) #### Introduction As the global community intensifies its efforts to combat climate change, carbon financing has emerged as a crucial mechanism for reducing greenhouse gas emissions. However, the burgeoning voluntary carbon market brings with it a complex web of risks that require meticulous navigation. In our opinion, there has until now been a lack of senior professional risk management officers within the carbon finance ecosystem. We have done our bit to change that, as have South Pole with a notable appointment in Q4 2024. At Carbonaires, where I have had the privilege of serving as Chief Risk Officer (CRO) since 2022, we recognized early on that adept risk management isn’t just beneficial—it’s essential for the integrity and success of both our company and the wider carbon finance industry. Through proactive and strategic risk oversight, we aim to shape a resilient future for carbon finance. It was clear that financial services levels of risk due diligence had yet to be practically and pragmatically applied in the VCM as a industry standard. Our aim was to make that BAU. #### The Multifaceted Responsibilities of the CRO in Carbon Finance In the realm of carbon finance, the CRO’s role is both unique and expansive. It transcends traditional risk management, encompassing regulatory compliance, environmental stewardship, market analysis, and reputational safeguarding. A day in the life of a CRO at Carbonaires might involve: - **Assessing New Projects:** Evaluating the viability and risks associated with new carbon offset projects, including technological feasibility and environmental impact. - **Market Analysis:** Monitoring carbon market trends to anticipate price volatility and adjust strategies accordingly. - **Regulatory Compliance:** Ensuring all operations adhere to both local and international laws, as well as industry standards. - **Stakeholder Engagement:** Collaborating with investors, regulators, and community leaders to align on expectations and responsibilities. Our involvement in carbon asset management—originating and overseeing carbon projects—introduces layers of risk across various dimensions. My role is to systematically identify, assess, and mitigate these risks to ensure safeguarding our company’s interests and promote the robustness of the carbon finance market. #### Why Every Voluntary Carbon Market (VCM) Company Needs a CRO The novelty and rapid evolution of carbon finance mean that many companies are still grappling with its complexities. This uncertainty elevates the importance of the CRO from merely beneficial to absolutely essential. Without strategic risk management: - **Market Instability Could Increase:** Unchecked risks could lead to project failures, undermining confidence in carbon markets. - **Regulatory Non‑Compliance Risks:** Failure to adhere to evolving laws can result in legal penalties and reputational damage. - **Environmental Goals May Be Jeopardized:** Ineffective projects could fail to deliver the promised emission reductions, hindering climate action efforts. By establishing a dedicated CRO position early on, Carbonaires has been able to anticipate potential pitfalls and set a precedent for accountability and credibility in the sector. The CRO’s role extends beyond protecting the company’s interests; it is about ensuring that every project contributes meaningfully to global emission reduction goals. #### Enhancing Success Through Proactive Risk Management Our pioneering approach at Carbonaires involves not just mitigating risks but also leveraging them as opportunities for improvement and innovation. For example: - **Case Study – Navigating Regulatory Uncertainty:** We once considered a project in a region with ambiguous environmental regulations. Our thorough due diligence revealed potential legal hurdles that could have delayed or derailed the project. By identifying these challenges early, we redirected our resources to more stable opportunities, safeguarding our investments and timelines. - **Integrating Technological Solutions:** We employ advanced analytics and risk modeling software to predict market trends and project performance, enabling us to make data‑driven decisions. This proactive stance allows us to enhance the effectiveness of our carbon finance initiatives while reinforcing investor confidence. #### Embedding Risk Management in Every Operation As the global economy transitions toward sustainability, the expansion of carbon finance is both inevitable and necessary. Yet, this growth must be managed carefully to align financial incentives with environmental imperatives. At Carbonaires, risk management isn’t a standalone function but an integral part of our DNA: - **Project Lifecycle Oversight:** From initial concept to credit issuance, we continuously monitor projects to ensure they adhere to standards and achieve desired outcomes. - **Sophisticated Risk Models:** We utilize predictive analytics to assess potential market shifts and project performance changes. - **Investor Assurance:** By maintaining rigorous risk management practices, we offer our investors confidence in the long‑term viability and impact of their investments. #### The Crucial Role of Transparent and Verifiable Due Diligence One of the most significant challenges in carbon finance is ensuring the authenticity and effectiveness of carbon offset projects. The value of carbon credits is inherently tied to the legitimacy of the underlying projects. To address this: - **Stringent Verification Processes:** We conduct in‑depth assessments of each project's environmental impact, legal framework, and financial stability. - **Third‑Party Audits:** Engaging independent verifiers adds an extra layer of credibility to our projects. - **Comprehensive Documentation:** Transparent reporting practices ensure that all stakeholders have access to detailed information about project performance. By extending due diligence beyond environmental metrics to include geopolitical and technological factors, we build resilience into our projects and foster trust among stakeholders. #### Leading the Future of Carbon Finance The decisions and standards we establish today will shape the trajectory of carbon finance for decades to come. By prioritizing the CRO role and embedding robust risk management practices, Carbonaires aims to set a benchmark for excellence in the industry. Our commitment includes: - **Continuous Improvement:** Regularly updating our risk management frameworks to adapt to new challenges. - **Industry Collaboration:** Sharing insights and best practices with peers to elevate the entire sector. - **Aligning with Global Goals:** Ensuring our business objectives support international efforts to mitigate climate change. The CRO function, therefore, is not just about safeguarding our company—it’s about contributing to a sustainable and credible carbon finance ecosystem. #### A Call to Action for Industry Collaboration The effectiveness of carbon financing as a tool against climate change hinges on our collective ability to manage risks transparently and responsibly. I encourage leaders in the field to prioritize risk management and consider the strategic value a dedicated CRO brings to an organization. #### Let's Collaborate for a Sustainable Future If you're interested in learning more about our approach to risk management or eager to strengthen your organization’s risk practices, I invite you to connect with me. Together, we can help shape a carbon finance industry that delivers real environmental benefits and stands the test of time. #### About the Author As the Chief Risk Officer at Carbonaires, Jerome Ryan brings extensive experience in risk management from his time at BDO and State Street. Passionate about leveraging carbon finance for positive climate action, he is committed to advancing industry standards and increasing transparency across the carbon finance sector. ### Landmark carbon removals finance deal signed (2024-11-14) [Read on website](https://carbonaires.com/news-media/carbonaires-completes-first-of-a-kind-carbon-finance-transaction-collaborates-with-ubs-and-the-carbon-removers) #### Introduction Landmark carbon removals finance deal signed #### Carbonaires completes first of a kind carbon finance transaction, collaborates with UBS and The Carbon Removers Carbonaires, the leading London‑based carbon finance specialist, announces a ground‑breaking product offering with a lead transaction that aims to provide returns to investors from the sale of carbon removals credits generated by removing carbon dioxide from the production and supply chain of the Scotch whisky industry. Global bank UBS and The Carbon Removers, the Scotland‑based carbon removal company, collaborated with Carbonaires on this innovative pilot product. This first‑of‑a‑kind transaction is expected to generate approximately 134,000 carbon removals credits over a time span of several years, based on analysis conducted by Carbonaires. The product, which is available to professional investors only, offers returns from carbon removal credits, which are measured, managed and verified with due diligence developed from the financial services and insurance sectors. The credits will be verified by Puro Earth, a specialist carbon removals certifier and registry. The investment structure makes use of capabilities of the Carbonplace platform, a carbon credit transaction network and settlement technology originally founded by leading banks. Carbonaires were instrumental in structuring the deal and introduced the project developer, The Carbon Removers. The transaction is underpinned by removals credits and constitutes a segment of the carbon markets that is forecast to experience growth in demand according to McKinsey analysis, given the role they may be able to play compensating for emissions that cannot be abated, alongside credible climate targets, when they are verified in accordance with international standards. Further to this collaboration, UBS also supports the development of emerging climate technologies with landmark commitments with Climeworks, NextGen and Neustark for high‑quality technological carbon removals. > Carbonaires has been proud to structure this offering with UBS. Widening access to investment opportunities in the voluntary carbon market has been needed for some time, and it feels great to have had a hand in developing that process. It is fair to say that we expect significant new capital flows into carbon removal project investment on the back of this new way of investing. > — Alison Barto, Chief Partnerships Officer, Carbonaires > Our primary interest in this investment with UBS is commercial, as with all the deals that we do. Our strategy includes backing new technology and innovations, both of which are involved in this offering. The juxtaposition of big global names and newer players in the deal underpinning the offer is, for us, a blend of both innovation, trust and stability. We also see the value of investing in the green economy, as we are a multigenerational family office with a mandate to develop strategies that encompass a longer‑term outlook. > — Cem Tufekci, Principal, Pakua Capital > We continuously work with our clients to develop innovative climate finance solutions that enable them to support the transition to a low carbon economy. Financial innovation as demonstrated through this first‑of‑a‑kind carbon transaction is critical to ensure emerging climate technologies attract the funding at the speed and scale required to build a negative emissions industry. > — Kevin Arnold, Executive Vice Chairman, UBS > We are a carbon removal company. This recent UBS investment not only expands our projects but directly integrates UBS customers into carbon dioxide removal today, while bringing to the market permanent and measurable Carbon Removal Credit. This is a climate positive statement to the international banking world and a mechanism that allows The Carbon Removers to further deploy technology. > — Richard Nimmons, CEO, The Carbon Removers > We welcome the opportunity to work with UBS on this offer and with Carbonaires and The Carbon Removers to provide high‑quality supply and liquidity in the voluntary carbon market. Providing high‑quality supply and liquidity in the voluntary carbon market is a clear priority for Carbonplace, and this new collaboration can be successful in addressing that challenge. > — Scott Eaton, CEO, Carbonplace ### Internal Carbon Pricing: A Catalyst for Sustainable Business (2024-09-05) [Read on website](https://carbonaires.com/news-media/internal-carbon-pricing-a-catalyst-for-sustainable-business) #### Introduction Carbon pricing is a mechanism designed to reduce greenhouse gas emissions by assigning a financial cost to them. This cost can be implemented through various methods, including carbon taxes, cap‑and‑trade systems or internal carbon pricing (ICP). While the former two are typically set at the government level, ICP is a corporate strategy and the focus of this month’s newsletter. The cost of carbon is influenced by a complex interaction of economic modelling, market mechanisms and policy decisions. This cost represents the emissions of CO₂ into the atmosphere as well as the removal, avoidance or reduction of these emissions. In cap‑and‑trade systems, the market price is set by the supply and demand for emissions allowances. Carbon taxes, on the other hand, are fixed by governments to reflect environmental goals. The greatest variability in carbon pricing occurs at the company level where ICPs are often determined by factors such as anticipated regulations, sustainability objectives, stakeholder expectations and the extent to which carbon ‘revenues’ are to be collected and allocated. #### The Mechanics of Internal Carbon Pricing The concept of an ICP allows companies to align strategic objectives and operations with sustainability goals by assigning a monetary value to the cost of emitting carbon. This approach considers carbon emissions as a tangible factor, incentivising decarbonisation across business operations and value chains. By adopting an ICP, companies can more effectively plan for and manage regulatory and market‑based risks, while seizing the opportunity to lead the transition towards a low‑carbon economy. ICPs are a strategic tool for businesses with sustainability goals. They involve assigning a financial value to carbon emissions and encouraging more environmentally conscious decisions. There are two primary types of ICPs: actual and shadow pricing (also known as shadow pricing). Actual ICPs involve a company charging itself (different sub‑companies, divisions, or departments) a fee for each tonne of carbon emitted. These funds are typically allocated towards emissions reduction initiatives, such as investing in carbon removal projects or improving energy efficiency. This approach directly converts carbon emissions to financial costs, incentivising more sustainable practices. Shadow ICPs, on the other hand, assign a hypothetical price to carbon emissions without collecting actual fees. This allows companies to assess the environmental impact of their operations without incurring immediate financial costs. While it doesn’t involve direct financial transfer, shadow pricing can raise internal awareness and inform future investment decisions. Both actual and shadow ICPs aim to reduce corporate carbon footprints. However, they differ in their approach. Actual ICPs are directly tied to market conditions, reflecting the real‑world value of carbon. Shadow ICPs offer more flexibility, allowing companies to set prices based on internal factors and future projections. #### Why Implement an ICP? Adopting an Internal Carbon Price (ICP) demonstrates a company’s commitment to sustainability and positions it for future climate challenges. By proactively addressing carbon emissions, businesses can mitigate risks associated with changing regulations and capitalise on emerging opportunities in the low‑carbon economy. Key benefits include: - **Risk Management:** ICPs can help companies prepare for future regulatory changes and market risks associated with carbon emissions. By incorporating carbon costs into decision‑making, businesses can mitigate potential financial penalties and ensure long‑term sustainability. - **Cost Reduction:** ICPs can drive efficiency and process optimisation, leading to long‑term cost savings. By identifying carbon‑intensive activities, companies can explore more efficient alternatives and reduce their overall environmental footprint. - **Innovation:** ICPs can incentivise the development of low‑carbon products and services, fostering innovation and positioning companies as leaders in the sustainable market. - **Reputation Enhancement:** Adopting an ICP can improve a company’s reputation among stakeholders, including investors, customers and employees. It demonstrates a commitment to sustainability and aligns with growing consumer and investor expectations. #### The Growing Adoption of ICPs ICPs are gaining significant traction, with nearly half of the world’s top 500 companies incorporating carbon accounting into their business strategies. Companies like Microsoft, Orsted and Mitsubishi Corporation are leading the way by implementing ICPs and using the revenue to fund emissions reduction projects. This trend is reflected in the growing number of companies setting internal carbon prices, with other notable examples including Apple, Google, and Unilever. These companies have established ICPs to align their operations with sustainability goals, reduce their carbon footprints and uphold their reputations as good corporate citizens in the increasingly climate‑conscious market. #### Challenges and Future Outlook Despite the growing adoption of ICPs, one of the primary challenges lies in determining an accurate carbon price. While guidelines and frameworks exist, there is no universal standard, leading to variations across industries and regions. This makes it difficult for companies to compare and benchmark their efforts effectively. Furthermore, the social cost of carbon, representing the economic damage caused by each tonne of carbon emitted, is often underestimated. Many ICPs are significantly lower than the true environmental cost, potentially hindering effective emissions reduction. Another concern with ICPs is the potential for greenwashing. While companies may announce impressive internal carbon prices, there is a risk that these are merely symbolic gestures without underlying emission reductions. If companies fail to disclose how and when ICP funds will be used, it raises concerns about the credibility of their environmental action. To ensure ICPs contribute meaningfully to climate action, companies must be transparent about their carbon pricing practices and demonstrate how they are driving emissions reductions, regardless of whether the ICP is actual or theoretical. As the world confronts the urgency of climate change, Internal Carbon Prices (ICPs) will play an increasingly vital role. By accurately valuing carbon emissions, companies can make informed decisions, reduce their environmental impact and contribute to a more sustainable future. To ensure the effectiveness of ICPs, it is essential that they are implemented transparently, aligned with the true social cost of carbon, and used to drive concrete emissions reduction initiatives. ### Transitioning voluntary carbon markets to compliance: Japan case study (2024-07-31) [Read on website](https://carbonaires.com/news-media/transitioning-voluntary-carbon-markets-to-compliance-japan-case-study) #### Introduction Japan’s emissions trading scheme (ETS) – known as the Green Transformation ETS (GX‑ETS) – is a cornerstone of the country’s strategy to reduce greenhouse gas emissions and become carbon neutral by 2050. Launched in 2023, the GX‑ETS combines a mixture of fiscal and policy measures in defining a 10‑year roadmap to transform various industrial sectors and accelerate decarbonisation. Over 150 trillion Yen ($1.1 trillion USD) of investment has been earmarked to make it happen. The ultimate outcome will be a national cap‑and‑trade system that integrates with international carbon markets, increasing the flexibility and cost‑effectiveness of achieving emissions reduction targets. While the GX‑ETS is entirely voluntary, strong incentives from the Japanese government have seen over 600 companies participate (accounting for 60% of the country’s total emissions). Currently in its first phase, the scheme operates as a voluntary baseline‑and‑credit system which will last until the end of March 2026. After this, participation in the scheme will become compulsory as it transforms into a cap‑and‑trade system. In addition to ensuring nationally determined contribution targets are met, the use of CDR voluntary credits in the GX‑ETS is expected to enhance the competitiveness of Japanese companies in relevant technological fields. #### Japan’s carbon market history Over the past two decades, Japan has implemented schemes to reduce carbon emissions and facilitate carbon trading. One example is the Tokyo Cap‑and‑Trade Program, a regional pilot initiative that has been operating since 2010 and serves as a model for a national scheme. It was Japan’s first mandatory ETS and the world’s first urban cap‑and‑trade program that requires emissions reductions from large commercial and industrial buildings. In 2013, the Government set up the J‑Credit Scheme which promotes low‑carbon technologies, improved energy efficiency and enhanced integrity of forestry and agriculture projects. Credits issued within the J‑Credit Scheme can be used to meet both voluntary and regulatory requirements. While the J‑Credit Scheme operates solely in Japan, the Joint Credit Mechanism (JCM) was introduced to target international audiences. The JCM aims to facilitate global emissions reductions by adopting Japanese low‑carbon technologies in developing nations. The GX‑ETS builds on the strong foundations and lessons of the previous schemes, with the goal of achieving broader emissions reductions across multiple sectors. #### GX‑ETS backs CDR In April 2024, the Japanese Government made the landmark decision to admit a selection of international CDR projects within the GX‑ETS, having previously only allowed offsets from the country’s J‑Credit and JCM systems. Projects include carbon capture and utilization (CCU), blue energy with carbon capture and storage (BECCS), coastal blue carbon and direct air carbon capture and storage (DACCS) from overseas projects. Other CDR technologies are also on the table for discussion. For international credits to be eligible they must be used in “compliance with international standards” in terms of additionality, permanence and avoidance of double counting, or involve the Government of Japan in the operation of the programme. Companies wishing to use CDR credits must have a total investment of at least 20 % in the project or provide the technologies or solutions – such as maintenance and monitoring – necessary for successful delivery. It’s worth noting that Japan is also considering including CDR in its J‑Credit market, though plans for this are still in the early stages. #### Quality Assurance Japan's ETS includes several guardrails to ensure the quality of carbon removals. The measures are designed to maintain the integrity and effectiveness of the GX‑ETS in delivering measurable, verifiable and permanent emissions reductions. Carbon removal projects must be accredited by recognised bodies and verified by independent third‑party authorities to ensure they meet high governance standards. Projects must implement continuous monitoring systems to track emissions reductions accurately and must submit regular reports to track progress. Though a voluntary market, the Japanese Government provides strict regulatory oversight to ensure compliance with ETS rules. Non‑compliant projects face penalties, including fines and exclusion from the trading scheme. The GX‑ETS also mandates the use of standardised protocols – such as those set out by Gold Standard, CDM or VCS – for different types of carbon removal projects, including soil carbon sequestration, carbon capture and storage (CCS) and others. These outline the procedures for project implementation, monitoring and verification. This ensures that Japan’s ETS has the potential to be integrated within a global carbon market and also upholds high quality and credibility of carbon removals. #### So, what can be learned from Japan’s approach? Japan’s ETS is an excellent example of a voluntary carbon market that, when backed by strong government support and with stringent guardrails in place, can transform into a compliance‑based national cap‑and‑trade system. Transparency and integrity are key. Countries must demand detailed disclosure of project methodologies, external verification and regular updates to track emissions reductions and verify the ongoing efficacy of carbon removals. By implementing rigorous and standardised international protocols, Japan – and other nations – can integrate their ETS within a global carbon market framework. While establishing the GX‑ETS has faced challenges, ongoing efforts to refine and expand the scheme, along with complementary measures, are expected to enhance its effectiveness in the coming years. Finally, the phased approach of starting the GX‑ETS as a voluntary programme before transitioning to a mandatory scheme offers numerous benefits that international countries can learn from. In essence, it allows nations to iron out any potential hurdles before the market becomes fully regulated by building capacity and experience, fostering stakeholder engagement and reducing compliance risks. It can also encourage early action and allow for regulatory flexibility. This strategy helps ensure a more robust, efficient and widely accepted emissions trading system, ultimately contributing to Japan’s long‑term climate goals and reputation as a global climate leader. ### Carbonaires extends global footprint through collaboration with NUMA Partners on carbon removal projects and financing in Latin America (2024-05-22) [Read on website](https://carbonaires.com/news-media/carbonaires-extends-global-footprint-through-collaboration-with-numa-partners-on-carbon-removal-projects-and-financing-in-latin-america) #### Latin America Expansion with NUMA Carbonaires extends global footprint through collaboration with NUMA Partners on carbon removal projects and financing in Latin America 23 May 2024 – Carbonaires, the London‑based carbon asset manager, today announces that it has signed a Memorandum of Understanding (MoU) with NUMA Partners (NUMA), a developer of investment strategies in private equity and other markets, to collaboratively develop and manage high quality carbon removal projects in Latin America. This pioneering agreement leverages the companies’ unique capabilities to facilitate lower‑risk investments and acquire high‑integrity carbon credits. The partnership expands the company’s reach and solidifies its position as a leader in the Voluntary Carbon Markets (VCM). Under the agreement, Carbonaires will apply its proprietary due diligence systems to ensure delivery of measurable, additional and transparent carbon removal projects of the highest quality. This includes, but is not limited to, carbon credit project feasibility analysis, volume projections, certification and sales processes. The MoU will leverage NUMA’s financial structuring expertise and established network in Latin America to identify and monitor projects and partner with local project developers. NUMA will collaborate with Carbonaires to secure funding for both its strategic growth and project initiatives. The immediate activation of the MoU signifies both companies’ commitment to scaling the availability of high quality carbon credits in the VCM at pace. The agreement defines an exclusive relationship between Carbonaires and NUMA in relation to carbon credit projects in South America (excluding Argentina). Latin America is the world’s second largest provider of voluntary carbon credits, with just under 20 % of global VCM projects being based in the region (https://www.ieta.org/resources/reports/status-and-trends-of-compliance-and-voluntary-carbon-markets-in-latin-america/). Carbonaires and NUMA recognise the region’s leadership potential in the carbon markets and look to increase investment through this MoU. > This partnership marks a crucial milestone in Carbonaires' mission to deliver high integrity carbon credits across the globe. We are excited to unlock the huge carbon removal opportunities available in the region and beyond through collaboration with NUMA. Carbonaires is looking forward to extending its working relationship with local developers to not only generate high quality carbon removal projects, but also to deliver positive local impacts through job‑creation, improved environmental quality and numerous other co‑benefits. > — Michael Spenley, Partner and Co‑founder of Carbonaires > Latin America is the natural site for this partnership to take place. Our strong existing professional network in the region, and Carbonaires' project‑specific expertise on due diligence and origination presents a strong investment opportunity. We are delighted to collaborate with Carbonaires on this exciting partnership as we enter the carbon credit ecosystem. > — Cristian Moreno, Partner at NUMA Partners Carbonaires was founded in 2021 by a group of entrepreneurial investors and ESG ambassadors to finance high‑quality, high‑integrity carbon removal projects. Through its pioneering project finance model, the company provides funding to enterprises that demonstrably remove atmospheric carbon, in turn helping businesses to strengthen their financial viability. The carbon credits generated through projects are made available for purchase to corporations who also have committed to a transparent and verifiable carbon reduction plan. NUMA Partners focuses on developing opportunistic investment strategies in private equity and other markets. With significant experience and an established network in LATAM, NUMA brings financial structuring expertise and a deep involvement in optimising the financial health of its investments. **Media enquiries** Leighton Barnish, Powerscourt email: Leighton.barnish@powerscourt‑group.com Tel: +44 7484 800209 ### The Evolving Landscape of Self-Regulation in the Voluntary Carbon Market (2024-05-07) [Read on website](https://carbonaires.com/news-media/the-evolving-landscape-of-self-regulation-in-the-voluntary-carbon-market) #### Self-Regulation in the VCM The voluntary carbon market (VCM) has for a long time faced concerns about fragmentation and lack of transparency. Accusations of greenwashing and uncertainty over the environmental impact of carbon offsets have hampered its effectiveness in combating climate change. However, a self‑regulation movement driven by market participants is taking root. This article explores how the VCM is building robustness and integrity through various self‑regulatory measures, collaborations and actions. Understanding Self‑Regulation Self‑regulation occurs when an industry establishes its own standards and practices that promote trust and transparency. It doesn’t involve direct government oversight but relies on collaboration between key market players. Similar to the Advertising Self‑Regulatory Council (ASRC) in the US or International Chamber of Commerce in the UK, these entities offer guidance and set standards without imposing regulation, legislation or penalties on non‑compliant actors. While self‑regulation allows for quicker responses to emerging issues than government regulation, enforcement capabilities are limited. Let’s delve into how the VCM is embracing this approach. Collaboration Over Competition The VCM relies on a network of independent standard‑setting organisations with established methodologies for project certification and emissions verification. All standard setters share the goal of enhancing transparency and integrity in the VCM’s carbon credits. Recently, a significant increase in collaboration has emerged including the formation of the End‑to‑End Integrity Framework – representing over 3,000 projects and 2.5 billion credits – and the co‑development of standards by VCMI and ICVCM. Working together to promote consistency and simplify market navigation, standard setters are fostering a more credible and efficient environment. This collaboration provides much‑needed governance and oversight for unregulated markets to function effectively. It fosters a neutral environment where organisations don’t have to choose sides and companies avoid getting caught in political games. Increased Scrutiny and Institutional Engagement The involvement of heavyweight institutions like the US Securities and Exchange Commission (SEC) in developing climate disclosures for carbon credits adds another layer of accountability. This engagement signals growing recognition of the market’s potential and pushes for responsible practices. The European Union’s updated climate targets of a 90 % net emissions reduction commitment by 2040 further endorse carbon markets. This policy prioritises both carbon reduction and removal technologies. Additionally, the World Economic Forum acknowledges the urgency of reducing emissions, protecting ecosystems and deploying carbon removal technologies. At COP28, influential figures like World Bank President Ajay Banga and US Climate Envoy John Kerry endorsed the VCM. Kerry expressed his belief in the power of carbon markets to drive climate action. The US commodities regulator, CFTC, also supported the Voluntary Carbon Market by issuing proposed guidance. Increased focus from these influential actors necessitates the highest levels of transparency and robustness within the VCM, leaving less room for error. With major players backing, the market needs to demonstrate its credibility. VCM Credits and Corporate Net Zero Programs The Science Based Targets initiative (SBTi) recently announced the inclusion of carbon credits in their Corporate Net Zero standard. The decision to include Scope 3 emissions (indirect emissions) in the validation process creates a critical demand shift and further strengthens quality oversight. Considering that SBTi‑approved pledges cover a significant portion of global GDP (92 %) and emissions (88 %), the inclusion of carbon credits provides organisations with greater confidence in their use and increases scrutiny on quality and reporting transparency. BNEF estimates the VCM market could reach a value of $11 trillion by 2050, up from $2 billion today. As companies seek to offset Scope 3 emissions, prioritising high‑quality offsets becomes crucial, incentivising project developers to deliver measurable environmental benefits. Global and Local Involvement in the VCM Article 6 of the Paris Agreement establishes a framework for a more robust international carbon offsetting system. It lays the groundwork for standardised methodologies and global verification processes. As a key outcome of COP26 agreements, Article 6 functions as a framework for a standardised approach to carbon credit trading and fosters international cooperation. It aims to build a centralised global carbon market where nations can reliably trade voluntary carbon credits. COP28 saw significant progress, including establishing a clear accounting framework to avoid double counting. Negotiations are ongoing to finalise specifics within the framework (such as Article 6.2 and 6.4). Market participants hope COP29 might be the event where the process is agreed, and implementation can begin. While not formal regulation, Article 6 provides a strong international framework for countries and companies navigating carbon markets. Backed by the UNFCCC, these rules are supported by many leading global NGOs. According to the World Bank, carbon trading could facilitate the removal of 50 % more emissions by 2030. Article 6 encourages voluntary cooperation between nations to achieve their NDCs and foster greater transparency across the sector. A Single Set of Widely Accepted Standards The Integrity Council for the Voluntary Carbon Market (ICVCM) has taken a significant step towards self‑regulation with the introduction of their Core Carbon Principles (CCPs). These CCPs function as a comprehensive assessment tool, providing independent verification of a carbon credit’s integrity within the voluntary market. Encompassing ten science‑based principles, the CCPs are a rigorous benchmark for identifying high‑quality credits. These credits demonstrably contribute to verifiable reductions and removals of emissions. By adhering to these principles, project developers can ensure their credits meet the most stringent standards for transparency, environmental impact and sustainable development. Consequently, the CCP label serves as a trusted symbol for buyers. It allows them to confidently invest in carbon mitigation efforts with a clear demonstration of commitment towards achieving global climate goals. Harnessing Technology for Self‑Regulation Data and Artificial Intelligence (AI) are emerging as powerful tools for self‑regulation within the VCM. These technologies contribute to a more credible and impactful market by enhancing transparency, accountability and project design. Ultimately, this further drives the market towards self‑regulation and delivers greater environmental benefits. Examples include the utilisation of satellite imagery and technology, AI and blockchain. These advancements offer deeper insights into project analysis, selection and efficacy. Additionally, they enable more robust monitoring, which strengthens transparency and eliminates opportunities for manipulation or abuse. While the VCM isn’t yet fully self‑regulated, it has demonstrated its ability to adapt and address existing shortcomings. The continued focus to improve integrity and efficiency builds greater confidence and engagement within the market. As the need for carbon reduction and removal intensifies in the face of rising temperatures and escalating climate disasters, the demand for stronger governance and quality will inevitably rise as well. While this may ultimately culminate in partial or full regulation of the sector, the ongoing development of self‑regulation measures, like those outlined above, will continue to build trust and reliability in the market with the critical objective of averting a climate catastrophe. ### Guide to Carbon Trading (2024-03-08) [Read on website](https://carbonaires.com/news-media/guide-to-carbon-trading) #### Understanding Carbon Markets The fight against climate change demands a multi‑pronged approach. While regulations and compliance markets play a crucial role, voluntary carbon markets (VCM) have emerged as a powerful tool for businesses and individuals to offset their emissions and support sustainable projects. In this newsletter, we provide an overview of the dynamic world of carbon trading within the VCM. The purpose of carbon markets The core idea is deceptively simple: create a market for carbon credits, tradable units representing one tonne of CO₂ removed or reduced from the atmosphere. Markets operate on the fundamental tenets of supply and demand. On the one hand, projects that remove, reduce or avoid emissions generate carbon credits. On the other hand, companies and individuals seeking to offset some or all their carbon footprint can purchase these credits. This economic framework incentivises emissions reduction by creating a financial value for carbon and its removal or reduction from the atmosphere. Understanding the Carbon Market Landscape There are two main types of carbon markets: compliance and voluntary. Compliance markets, like the European Union Emissions Trading System (EU ETS), mandate companies to hold a certain number of permits equivalent to their emissions. Voluntary Carbon Markets on the other hand offer a platform for entities (individuals and businesses) to go beyond their regulatory obligations. Here, companies can offset their emissions by purchasing carbon credits generated by projects that reduce greenhouse gases or remove them from the atmosphere. The VCM Ecosystem: From Project to Market Voluntary carbon markets operate through a network of players. Let’s delve deeper into the journey of a carbon credit: • **Project Identification:** Project developers collaborate closely with climate experts to source and assess potential projects around the world. Identifying high‑impact projects requires a nuanced approach. The project type should demonstrably remove or reduce greenhouse gases. Additionally, the project should generate positive environmental and social impacts such as improved air quality, biodiversity conservation or job creation in local communities. As an example, consider a project in a developing country that produces biochar. Biochar is a charcoal‑like substance created by heating organic material (like crop waste) in an oxygen‑limited environment. This process traps the carbon from the biomass within the biochar, preventing its release as CO₂ during decomposition. Additional co‑benefits of the project could include local job creation, new revenue streams and enhanced soil quality. • **Methodology Selection:** The project developer selects a recognised methodology to quantify the emission reductions the project will achieve. This methodology outlines the project’s activities, baseline scenario (emissions without the project), monitoring requirements and leakage considerations (potential emission increases elsewhere due to the project). • **Verification and Validation:** Independent third‑party verification bodies assess the project against the chosen methodology. This ensures the project design is sound, the baseline is accurate and the monitoring plan is robust. • **Project Funding and Implementation:** Investors can directly purchase future carbon credits generated by the project, or the project can participate in carbon credit funds or result‑based finance programs. With funding secured, the project developer constructs and operates the new process or facility. • **Credit Issuance:** Throughout the project’s operational life, the verification body monitors and verifies the actual emission reductions achieved. Based on this verification, the registry issues tradable carbon credits, each representing one tonne of CO₂ reduced. Trading on Exchanges and Direct Sales Carbon credits can reach buyers through two main channels: • **Exchanges:** VCM exchanges function as marketplaces where project developers and credit intermediaries can list and sell credits. Buyers, such as companies seeking to offset their footprint, can browse listings, compare prices and execute trades electronically. Examples of VCM exchanges include CBL Markets and ACX. • **Direct Sales:** Project developers can also sell credits directly to corporations or other entities with specific sustainability goals. This approach allows for tailoring projects to meet specific buyer preferences and generally commands a premium price. Vintages and Retirements The year a credit is issued (vintage) can affect its value. Credits from newer vintages may be preferred as they represent more recent reductions. Once a company or individual purchases a credit to offset their emissions, they can “retire” it. This permanently removes the credit from circulation, ensuring it cannot be used for future offsets. Retirement is typically recorded on a registry, providing transparency and preventing double counting. Market Dynamics: Price Discovery and Integrity The price of a carbon credit is influenced by several factors: • **Credit Type:** Credits from removal projects (such as afforestation or Direct Air Capture) generally command a premium compared to reduction projects (e.g. renewable energy) due to their permanent impact on atmospheric CO₂. • **Project Methodology:** The methodology used to quantify the project’s impact can influence price. More rigorous methodologies with robust verification processes generally command a higher price. • **Location:** Some buyers favour credits generated in specific regions based on their sustainability priorities or supporting local communities. • **Supply and Demand:** As demand for high‑quality, verified credits rises, prices tend to reflect this growing market interest. A Transparent Marketplace for Climate Action Voluntary carbon markets can offer a transparent platform for channelling investments towards impactful climate projects. Understanding the credit generation process, trading dynamics and pricing factors empowers informed decision‑making within the VCM. By prioritising high‑integrity projects and fostering market efficiency, VCMs play an increasingly vital role in accelerating the transition to a low‑carbon future. ### Carbon Border Adjustment Mechanism: A Bridge Between Climate Action and Trade (2024-01-30) [Read on website](https://carbonaires.com/news-media/carbon-border-adjustment-mechanism-a-bridge-between-climate-action-and-trade) #### Understanding CBAM Internal carbon trading mechanisms like the EU’s Emissions Trading System (ETS) have been effective in reducing emissions domestically, however concerns exist about carbon leakage: where industries with high carbon footprints relocate to, or import from, countries with less stringent environmental regulations. Essentially shifting emissions instead of reducing them. The Carbon Border Adjustment Mechanism (CBAM) seeks to mitigate this practice. CBAM aims to level the playing field by applying a carbon price at the EU and UK borders on imports of specific goods from countries with weaker carbon pricing mechanisms. This puts a price on the embedded carbon of a number of imported products, ensuring a comparable carbon price is incorporated no matter the point of origin. Currently, CBAM covers six materials of a high carbon intensity and leakage risk: cement, iron and steel, aluminium, fertilizers, electricity and hydrogen. The aims of CBAM are twofold: - To prevent carbon leakage: equalising the carbon price for domestic and imported goods, CBAM discourages producers from shifting production to less regulated countries. - Incentivise global decarbonisation: setting a carbon cost for imports encourages other nations to adopt their own carbon pricing mechanisms and invest in cleaner technologies. For context, in 2021, the EU imported approximately seventy million tonnes of cement, which contributed to roughly 13 % of the EU’s total cement consumption. The main exporter was Turkey, followed by China and Vietnam. Given that Turkey and Vietnam do not currently have operational ETS, CBAM will apply to a substantial share of the EU’s current cement procurement. The same is true for the iron and steel industry, where a significant share comes from China and Turkey, meaning CBAM is likely to have a major impact. The concept of CBAM has been debated for years, and its full implementation marks a significant step in climate policy. The EU adopted the initial regulation in 2021, with the UK announcing its own implementation last December. CBAM is currently in its transitional phase across the EU. Today, all imported goods must be accompanied by declarations of embodied carbon emissions; businesses are not obliged to pay a financial charge at present, although this will come into effect from 2026 in the EU, and 2027 in the UK. While CBAM can be seen as positively mitigating against carbon leakage, some critics are concerned about potential complications for international trade. The additional bureaucratic burden of complex reporting regulations has led to concerns over the higher operating costs the policy will impose on businesses. Others are worried about increased tension between countries that do not yet have and have not adopted CBAM, with less regulated countries likely to be disproportionately impacted by changing trade flows. It is hoped these risks will be minimised through increased transparency and close co‑operation on an international scale, promoting and facilitating fair trade. CBAM has been designed to comply with World Trade Organisation (WTO) regulations and comprises of several flexibilities that encourage unity with WTO policies. The implementation period (between now and 2026 for the EU, and 2027 for the UK) will provide an essential opportunity for policy makers to gather information and assess further adaptations that may be necessary. Adopting CBAM will help to maintain and restore competitive advantage of EU and UK based companies who could be disadvantaged by cheaper and less carbon intensive goods from overseas competitors. In future, CBAM has the potential to expand its scope to include other carbon intensive goods, although this is likely to be decided once the implementation phase is complete. The Carbon Border Adjustment Mechanism marks a landmark moment in climate policy and demonstrates the ambitions of the EU and the UK to support climate action and recognise businesses who operate more sustainably. To be successful, the mechanism must continue to carefully balance environmental ambition with the realities of trading. ### Strategic Investment from KTM Chemicals S.A. (2024-01-14) [Read on website](https://carbonaires.com/news-media/strategic-investment-from-ktm-chemicals-s-a) #### KTM Chemicals Investment Strategic Investment from KTM Chemicals S.A. London, 15 January 2024 – Carbonaires, the London‑based carbon asset manager, has today announced it has received a strategic investment from KTM Chemicals S.A. (KTM), a global distributor and trader of plastics and chemical raw materials. This strategic partnership marks a groundbreaking collaboration between the finance and specialty chemicals sectors, aiming to accelerate the development of high‑quality, verifiable carbon and biodiversity projects within KTM’s distribution network and beyond. Through this investment, Carbonaires will deliver infrastructure, logistics, training, management, support and capital deployment to carbon projects that issue high‑quality carbon removals and enhance biodiversity across KTM’s network and the wider chemical sector, while also further developing KTM’s own Net Zero strategy. The collaboration will support the scaling up of high‑integrity carbon markets and significantly increase the availability of high‑quality carbon and biodiversity credits in a more transparent and effective marketplace. > We are proud to have received this important investment from KTM and would like to thank its board members Keyan Zulfikari and Kerem Zulfikari. We see that there are huge opportunities to learn from such an accomplished and experienced trading team. This is not just a financial investment. We believe that working closely with KTM will be a clear and strategic value‑add for Carbonaires. > — Rasih Ozturkmen, Managing Partner at Carbonaires > We look ahead to the future with this investment. Business leaders and shareholders need to act now to ensure that real foundations are established for a high‑integrity carbon offsetting market that is science driven and transparent. We see alignment with the strategic goals of KTM in new and exciting ways incorporating sustainability and commerciality. > — Keyan Zulfikari, KTM Board Member > This is an investment in sustainability. Carbonaires finds and helps develop the highest integrity carbon and biodiversity projects, conducts due diligence with proprietary tech and then aggregates opportunities for institutional investors to access the voluntary carbon market. We welcome this valuable work and particularly support project execution in KTM's distribution network. > — Kerem Zulfikari, KTM Board Member Carbonaires was founded in 2021 by a group of entrepreneurial investors and ESG ambassadors to finance high‑quality, high‑integrity carbon credit generating projects. Through its proven streaming model, the company provides funding to enterprises that demonstrably remove atmospheric carbon, in turn helping businesses to strengthen their financial viability. The carbon credits generated through projects are made available for purchase to corporations who have committed to a transparent and verifiable carbon removal plan. Media enquiries Leighton Barnish, Powerscourt email: Leighton.barnish@powerscourt‑group.com ### CEO (2024-01-08) [Read on website](https://carbonaires.com/news-media/ceo-s-4-big-themes-for-the-carbon-markets-in-2024) #### 2024 Carbon Market Outlook CEO's 4 big themes for the carbon markets in 2024 London, 9 January 2024 – Last week, Carbonaires CEO Rasih Ozturkmen spoke with Alex Janiaud from Financial Times and discussed the outlook for the carbon markets in 2024. Rasih joined other carbon market experts including Andrea Bonzanni – IETA, Allister Furey – Sylvera, Simon Puleston Jones – Climate Solutions and Teresa Hartmann – BeZero Carbon with views shared on Article 6 and the need for greater transparency and regulation in the market. Read the full article here: https://www.sustainableviews.com/experts-call-for-more-regulation-on-carbon-markets/ Rasih set out 4 big themes for the carbon markets this year. We’ll be sharing more insight on each of these over the coming weeks. 1. Progress made at COP28 will fuel discussions to deliver a more robust VCM in 2024 and drive policy negotiations to increase awareness of the importance of Article 6. 2. 2024 is the year that removals will take centre stage, scaling to become the high quality credits of choice. 3. Price diversification of carbon credits will become more pronounced, with high integrity projects continuing to grow in terms of volume and price. 4. There will be greater corporate engagement in the carbon markets through purchase of high integrity credits and investment into carbon removal projects. ### Carbonaires and the Republic of North Macedonia (2024-01-02) [Read on website](https://carbonaires.com/news-media/carbonaires-and-the-republic-of-north-macedonia) #### Public-Private Partnership with North Macedonia Carbonaires and the Republic of North Macedonia 3 January 2024 – Carbonaires, the London‑based carbon asset manager, today announces that it has signed a Memorandum of Understanding (MoU) with the Republic of North Macedonia (MKD) in a groundbreaking Public Private Partnership (PPP) to develop robust Voluntary Carbon Markets (VCMs) within the country. This landmark agreement marks a significant step forward in addressing climate change, not only for MKD but also as a potential model for other regional and international jurisdictions. This innovative PPP sets a potential precedent on the world stage, showcasing a new model for effective cooperation between governments and private entities in developing robust VCMs. The year‑long negotiations leading to this landmark agreement were facilitated by Mr Eser Cevahir, Board Member of Cevahir Holding and Honorary Consul of North Macedonia to Turkey. The MoU reflects both parties’ intentions to collaborate on the further development of rules and regulations for VCMs within the country. The agreement focuses on two key objectives: · To develop a strong regulatory framework for VCMs: the two parties will collaborate to analyse and strengthen existing legal frameworks governing VCMs, building on national climate change legislation and strategies. This will ensure greater transparency and alignment with international best practices and set the highest standards of integrity for the country’s own VCMs. · To implement a project: The partnership will oversee the implementation of a high‑integrity VCM project within MKD. Chosen in consultation with the government, the project could involve initiatives to remove carbon from the air, such as afforestation, biochar production or enhanced rock weathering – all aimed at generating high‑quality, high‑integrity carbon offsets. Developing VCMs unlocks a number of benefits for MKD. It not only accelerates domestic environmental action but also sets a model of best practice for other nations and demonstrates regional leadership. The evolution of VCMs demonstrates MKD’s commitment to achieving carbon neutrality and will help to deliver increased green investment and job creation, improved air quality and economic growth. Through this partnership, Carbonaires will expand its global reach and build greater regional experience, further solidifying its position as a leader in the VCMs. Collaboration with the MKD government on project implementation offers a unique opportunity to refine and pilot technical solutions for VCMs in partnership with a public entity. The immediate activation of the MoU underscores the commitment of both parties to swiftly execute the agreed‑upon activities, reflecting the one‑year timeframe set for jointly developing and implementing the agreed‑upon activities. > This partnership marks a significant step in the decarbonisation of our nation. The Republic of North Macedonia believes Public Private Partnerships are the key to unlocking a robust Voluntary Carbon Market, evidenced through our collaboration with Carbonaires. Working in this way is about securing jobs and better air quality both in the short and longer terms. It is about demonstrating leadership and political will to embrace a green economic future regionally and internationally. We have a duty to consider the stewardship of our nation's natural resources for future generations. We must be bold enough to take such steps now and not at some future undetermined date when it may be too late. > — Mr. Fatmir Bytyqi, Deputy Prime Minister of the Republic of North Macedonia > We are excited to partner with Carbonaires in this groundbreaking initiative. We believe that this PPP has the potential to not only propel the Republic of North Macedonia's journey towards carbon neutrality but also pave the way for a transformative approach to VCM development regionally and globally. > — Mr. Eser Cevahir, Honorary Consul of North Macedonia to Turkey > This collaboration marks a pivotal moment in Carbonaires' mission to drive effective climate action through robust VCMs. We are confident that working alongside the Republic of North Macedonia's government will not only benefit the country and the environment but also serve as a model for developing VCMs regionally and internationally. > — Mr. Rasih Ozturkmen, CEO and founder of Carbonaires Carbonaires was founded in 2021 by a group of entrepreneurial investors and ESG ambassadors to finance high‑quality, high‑integrity carbon reduction projects. Through its proven streaming model, the company provides funding to enterprises that demonstrably reduce atmospheric carbon, in turn helping businesses to strengthen their financial viability. The carbon credits generated through projects are made available for purchase to corporations who have committed to a transparent and verifiable carbon reduction plan. Media enquiries Leighton Barnish, Powerscourt email: Leighton.barnish@powerscourt‑group.com Tel: +44 7484 800209 ### Carbonaires Patagonia Press Release (2023-12-08) [Read on website](https://carbonaires.com/news-media/carbonaires-patagonia-press-release) #### Chilean Partnership Announcement Carbonaires Patagonia Press Release Today at COP28 in Dubai, Carbonaires announced a groundbreaking agreement in Chile with a consortium of partners, including the Kusanovic family, landowners, and their local advisors NatCap DMB/Fotosintesis. This deal will introduce carbon removal expertise and carbon market capabilities to the Patagonia region, specifically in the surrounding areas of Torres del Paine National Park. > This marks an incredibly exciting milestone and our inaugural venture in LATAM. It not only showcases our global reach but also highlights our commitment to advancing the extensive environmental objectives of our esteemed partners, the Kusanovic family, and our advisors. > — Rasih Ozturkmen, Managing Partner of Carbonaires > We have always considered ourselves stewards of this land that we proudly call home. This agreement will facilitate the transfer of carbon market experience and expertise to the region. We hope that this will be a bridge to the world of carbon finance and removal, ensuring a sustainable future for this extraordinary place. Our aim is to preserve its biodiversity and acknowledge its unique ecological importance in the region and the world. > — Mauricio Kusanovic, representative of the Kusanovic family Media enquiries Leighton Barnish, Powerscourt email: Leighton.barnish@powerscourt‑group.com Tel: +44 7484 800209 About Carbonaires Carbonaires was founded in 2021 by a group of entrepreneurial investors and ESG ambassadors to finance high‑quality, high‑integrity carbon reduction projects. Through its proven streaming model, the company provides funding to enterprises that demonstrably reduce atmospheric carbon, in turn helping businesses to strengthen their financial viability. The carbon credits generated through projects are made available for purchase to corporations who have committed to a transparent and verifiable carbon reduction plan. ### Introducing Carbonaires@COP28 with Anna‑Marie Slot (2023-11-28) [Read on website](https://carbonaires.com/news-media/introducing-carbonaires-cop-28-with-anna-marie-slot) #### Carbonaires at COP28 Introducing Carbonaires@COP28 with Anna‑Marie Slot As COP28 finally begins this week we are announcing that Anna‑Marie Slot, JD will be on the ground for Carbonaires at this landmark occasion. Anna‑Marie will be sharing her views on proceedings directly from the event in Dubai in a special **Carbonaires@COP28** series. In the context of many questions and challenges, it’s worth remembering that COP28 will include the first Global Stocktake, where nations will collectively assess progress on the Paris Agreement. Other matters particularly relevant to Carbonaires’ work in carbon finance will be high in the agenda – particularly Article 6.4 and the further development of global carbon markets and carbon trading. If you would like to meet or connect with Anna‑Marie and Carbonaires at COP28 please reach out directly at **cop28@carbonaires.com**. ### Milestone COP’s 1-28: The COP JOURNEY SO FAR (2023-11-26) [Read on website](https://carbonaires.com/news-media/milestone-cop-s-1-28-the-cop-journey-so-far) #### The History of COP Conferences With COP28 kicking off later this week, we thought it would be interesting to remind ourselves of the 28‑year journey that has led us to this point, and reflect on some of the key conferences, milestones and outcomes along the way. First, let’s unpack what COP means, and what happens… COP28 stands for the 28th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). During each COP, parties (nation states) review progress towards the overall goal of the UNFCCC: to tackle climate change. This year’s conference, hosted by Dubai in the UAE, brings together 198 countries with the shared purpose of lowering global GHG levels. COP1: BERLIN Following the success of the 1992 Earth Summit in Rio de Janeiro, and the establishment of the UNFCCC, the organisation spearheaded the inaugural COP1, which took place in 1995 in Berlin. Delegates from 117 parties and 53 observer states congregated to determine the framework for addressing climate change on a global scale, and kick‑started discussions on how to reduce greenhouse gas emissions. Most importantly, the conference established the Berlin Mandate – a ruling that requires parties to initiate talks to reduce emissions beyond 2000 by means of quantifiable objectives and specific deadlines. COP3: KYOTO After two years of negotiations, the Berlin Mandate was fulfilled at COP3, in the form of the Kyoto Protocol (1997). Adopted as a legally binding international treaty under the UNFCCC, this agreement marked a watershed moment for the world of climate policy. Key outcomes included: • **Emission Reduction Targets:** The protocol established legally binding emission reduction targets for developed countries, aiming to reduce their combined emissions of six greenhouse gases by an average of 5.2 % below 1990 levels over the commitment period of 2008‑2012. • **Flexible Mechanisms:** It introduced three market‑based mechanisms—Emissions Trading, Clean Development Mechanism (CDM), and Joint Implementation (JI)—to assist countries in meeting their emission reduction targets cost‑effectively. These mechanisms allowed countries to trade emissions credits, invest in emission‑reduction projects in developing countries and collaborate on projects to reduce emissions. • **Adaptation and Compliance:** The Kyoto Protocol included provisions for countries to promote adaptation to the adverse effects of climate change and established compliance mechanisms to ensure that participating countries meet their obligations. • **Entry into Force:** The protocol required the ratification of at least 55 countries – representing at least 55 % of global greenhouse gas emissions in 1990 – to proceed. It entered into force on February 16, 2005, after Russia ratified it, meeting the necessary conditions for implementation. Although a significant achievement, the Kyoto Protocol had limitations. Notably, major emitters like the United States did not ratify the agreement initially, and some key developing countries were not subject to binding emission reduction targets. Nonetheless, the influence of the Kyoto Protocol was profound, laying the foundation for subsequent COP meetings and global climate agreements. COP6: THE HAGUE Following the success of the Kyoto Protocol came the difficulty of implementing its ambitious ideas. The goal of COP6, hosted in The Hague, Netherlands in 2000 was to establish the operational details for the mechanisms introduced, such as emissions trading, CDM and JI. Fraught discussions, strenuous diplomacy and disagreement of key issues resulted in gridlocked negotiations. The talks collapsed without an agreement. COP7: MARRAKESH COP7, held in Marrakesh in 2001 resolved the failed negotiations of COP6. Key outcomes included: • **Marrakech Accords:** These rules detailed the procedures for implementing the Kyoto Protocol, addressing issues related to emissions trading, the CDM, land use, land‑use change, and forestry (LULUCF), compliance, and other crucial aspects. • **Establishment of the Adaptation Fund:** COP7 established the Adaptation Fund under the Kyoto Protocol to help developing countries mitigate the adverse effects of climate change and adapt to its impacts. COP7 was a critical milestone as it resolved the deadlock of COP6 and laid out the operational guidelines required for the effective implementation of the Kyoto Protocol. COP13: BALI In 2007, COP13 in Bali marked a major inflection point. The Bali Action Plan carved a new path, emphasising developed countries’ role in supporting developing nations. This meeting was a testament to the evolving understanding of shared responsibilities in the global climate narrative. COP21: PARIS One of the most significant achievements in the history of climate diplomacy is the Paris Agreement, formulated in 2015 at COP21. The conference reflected a paradigm shift in the global approach to climate policy, embracing approaches that were both top‑down (e.g., legally binding agreements like the Kyoto Protocol) and bottom‑up (e.g., allowing countries to voluntarily set their targets). This landmark agreement marked a pivotal moment in international efforts to address climate change, where almost every country, supported by collaboration with public and private sectors, committed to limiting global warming to a collective and specific target. Key outcomes included: • **Temperature goals:** The agreement set ambitious temperature goals to limit global warming to well below 2 degrees Celsius above pre‑industrial levels, with efforts to limit the increase to 1.5 degrees Celsius. This was a significant recognition of the urgency to mitigate the impacts of climate change. • **Nationally Determined Contributions (NDCs):** Each country submitted its own voluntary commitments (NDCs) outlining how they would reduce greenhouse gas emissions and adapt to the impacts of climate change. These contributions were to be regularly reviewed: updated and communicated every five years. • **Financial assistance:** Developed countries committed to providing financial support to assist developing nations in both mitigating their greenhouse gas emissions and adapting to the adverse effects of climate change. • **Transparency and accountability:** The agreement established a framework for transparency and accountability, requiring countries to regularly report on their emissions and progress towards their commitments. The discussions and decisions resulting from COP21, especially the Paris Agreement, set a trajectory for concerted global efforts towards mitigating climate change, emphasising collaborative action, ambitious goals and regular reviews to enhance climate commitments. Its significance lies in its broad consensus and its role as a foundational framework guiding international climate action. COP24: KATOWICE Held in Katowice, Poland, in 2018, COP24 was significant for delivering the “Rulebook” for the Paris Agreement, known as the Katowice Climate Package. It emphasised enhanced transparency and accountability through uniform emission reporting standards and a detailed framework which set out how countries should fulfil commitments. COP24 also outlined the process for the Global Stocktake to assess collective progress, occurring every 5 years. COP26: GLASGOW In 2021, COP26, hosted in Glasgow, called for heightened global ambitions. The Glasgow Climate Pact underscored the urgency of accelerating efforts, focusing on reducing reliance on coal and enhancing support for nations with specific climate related vulnerabilities. Nations agreed to a “phase‑down” of fossil fuels, though this was hotly debated, with many nations pushing full agreement to phase them out entirely. COP28: DUBAI This year marks the first‑time governments will collectively assess their progress on the Paris Agreement in the Global Stocktake, established at COP24 in Katowice. The phase‑down or phase‑out of fossil fuels is a highly anticipated topic of the negotiations, one that has already been debated at length at previous conferences and in the run‑up to the event. Discussions around Article 6 of the Paris Agreement are taking place this year, with hope that an agreed framework for implementing a global carbon market, governed by the UNFCCC (Article 6.4), will be finalised. Looking back at some of the successes or previous conferences, it’s clear that global co‑operation will be a critical success factor of this year’s event. Historical progress has drawn attention to the urgent need for immediate and sustained action to mitigate climate change, underscoring the importance of accelerating efforts to meet climate commitments. Today, climate science tells us this is essential now more than ever. With the Global Stocktake of COP28 diving deeper into the global data and progress than ever before, nations must be prepared to endure difficult negotiations to unlock a landmark action plan that could avert the worst of the ensuing climate catastrophe. Or to use the clarion call of UN Secretary General António Guterres, delegates must: “light the fuse to an explosion of ambition in 2025”. ### Nationally Determined Contributions (NDCs): A Comprehensive Guide (2023-11-09) [Read on website](https://carbonaires.com/news-media/nationally-determined-contributions-nd-cs-a-comprehensive-guide) #### Understanding NDCs What are NDCs? Nationally Determined Contributions (NDCs) are climate action plans to cut emissions and adapt to climate impacts. Each country that is a party to the Paris Agreement is required to submit an NDC, and to update it every five years. NDCs are at the heart of the Paris Agreement, and they are essential in limiting global warming to 1.5 degrees Celsius above pre‑industrial levels. How and when were NDCs formed? NDCs were first introduced in the Paris Agreement, which was adopted in 2015. The Paris Agreement is a legally binding international treaty that sets out a framework for global climate action. Signed by 196 countries, the agreement requires parties to take steps to reduce their greenhouse gas emissions and to adapt to the impacts of climate change. Which UN body or framework are NDCs overseen by? NDCs are overseen by the UN Climate Change (UNFCCC). The UNFCCC is the main international forum for negotiating and implementing climate change agreements. It has 198 member countries, including all major economies and has facilitated landmark climate agreements including both the Kyoto Protocol and the Paris Agreement. How are NDCs compiled? Because countries have different circumstances, resources and abilities, the Paris Agreement was designed so each nation can develop NDCs on an individual basis. Countries are required to submit their NDCs to the UNFCCC every 5 years, where they are published on a public registry. The UNFCCC also provides support to countries to help them develop and implement their NDCs. Since NDCs are governmental obligations, national ministers usually lead their development. To be most effectively implemented, NDCs need to be widely understood and utilised by all stakeholders in the country, hence a variety of influential constituencies are usually consulted during their creation. What’s included in NDCs? NDCs typically include the following information: **Mitigation targets:** These are targets for reducing greenhouse gas emissions. They can be expressed in absolute terms (e.g. reducing emissions by 50 % by 2030) or in relative terms (e.g. reducing emissions per unit of GDP by 25 % by 2030). **Adaptation measures:** These are measures to help countries adapt to the impacts of climate change. Adaptation measures can include things like building seawalls to protect coastal communities from flooding or developing drought‑resistant crops. **Financial needs:** NDCs may also include information about their financial needs for implementing their NDCs. This information can be used to mobilise financial support from developed countries to developing countries. What legal basis do NDCs have? NDCs are not internationally legally binding in the same way the Paris Agreement is since this is an international treaty. While parties are legally obligated to have an NDC, and to pursue measures with the aim of achieving it, fulfilment of the NDC is not a binding or enforceable commitment. However, countries are expected to take their NDCs seriously and to make every effort to achieve their targets. Many countries that are part of the Paris Agreement have passed national legislation on net‑zero targets, which commit their nation to lowering emissions by law. NDCs serve as the basis of many state level laws that have passed; as of last year, the EU alongside 33 other countries had adopted net‑zero targets, either in law or in a policy document. What happens if NDCs are not met? If countries do not meet their NDCs, it will make it much more difficult to limit global warming to 1.5 °C. Formally, the official consequence of missing NDC targets results in a meeting with a global committee of neutral researchers who will work with failing members to create new, more achievable plans. It is important to note that NDCs are just the first step in the process of achieving the Paris Agreement goals. Countries will need to continue to update and strengthen their NDCs over time to achieve the necessary emissions reductions. COP28 and NDCs COP28 in the UAE is an important opportunity for countries to review their NDCs and to make sure they are aligned with the latest science and the Paris Agreement goals. States are expected to come to COP28 with new and updated NDCs and with a concrete plan to reduce emissions and to adapt to climate change. Starting this year, and then repeating every five years, governments will take stock of the implementation of the Agreement to assess the collective progress. Parties will also discuss how to support developing nations in implementing and delivering their NDCs. This includes providing financial support, technical assistance and capacity building. ### IJGlobal ESG Pioneer – Anna‑Marie Slot (2023-11-08) [Read on website](https://carbonaires.com/news-media/ij-global-esg-pioneer-anna-marie-slot) #### ESG Leadership Recognition IJGlobal ESG Pioneer – Anna‑Marie Slot Join us in celebrating another **#ESG** leadership achievement by Carbonaires Advisory Board Member Anna‑Marie Slot, JD, who will be representing Carbonaires at COP28 UAE. https://www.ijglobal.com/articles/176074/ijglobal-esg-pioneer-anna-marie-slot ### Carbonaires: Carbon credits, policy and AI (2023-10-23) [Read on website](https://carbonaires.com/news-media/carbonaires-carbon-credits-policy-and-ai) #### ESG Podcast Discussion The ESG Mena Podcast | Ep. 23 | Carbonaires: Carbon credits, policy and AI ### How the voluntary and mandatory carbon markets work (2023-10-17) [Read on website](https://carbonaires.com/news-media/how-the-voluntary-and-mandatory-carbon-markets-work) #### Introduction How the voluntary and mandatory carbon markets work **17 October 2023** To the uninitiated, the world of carbon credits and offsetting can be confusing. But science – and leading global institutions – tell us that we will not come close to limiting global heating to the required 1.5 °C level without them. For many industries, particularly hard‑to‑abate sectors like oil & gas, aviation and heavy manufacturing, reducing carbon emissions is incredibly challenging. Eliminating them entirely is almost impossible. By supporting projects that reduce, avoid or remove carbon dioxide from the atmosphere, companies (and also individuals or states) can lower their overall impact, down to net zero or even beyond. The currency of these projects is often called carbon credits or offsets. The supply and demand of carbon credits has formed carbon markets of which there are two principal types: mandatory markets (sometimes referred to as compulsory or compliance markets) and voluntary markets (often referred to as VCMs). #### Mandatory carbon markets Mandatory markets are a regulated marketplace for the exchange of carbon credits. These markets often operate under a cap‑and‑trade system in which only a limited number of permits (to emit greenhouse gases) are issued. Businesses that are included generally receive an ever decreasing annual emission allowances. Those who exceed the allowances must pay for additional credits from others in the market or by way of penalties to the regulator. Whilst businesses cannot create or eliminate permits, they can trade existing ones. The biggest mandatory market is the **EU Emission Trading Scheme (ETS)**: a cap‑and‑trade scheme where certain high‑emitting installations such as power plants, industrial factories and aviation buy and trade allowances on the regulated EU carbon market. The cap imposed on emissions is reduced annually in line with the EU’s climate target, to ensure that emissions decrease over time. Carbon prices in the EU ETS are relatively stable and have been priced between 60 EUR and 100 EUR over the past two years (note: the penalty price for exceeding allocations is 100 EUR per credit/tonne). The UK operates a similar scheme (the **UK ETS** – introduced after it left the EU equivalent in 2021) which is overseen by a designated UK ETS regulator. While the mechanism is the same, the market has seen a wild downswing in carbon pricing due to a perceived over‑issuance of credits to UK businesses following the exit from the EU. Compliance markets exist in various countries across the world although most are still lacking in some jurisdictions. The US notably does not have a national carbon market and only a single state‑level market exists in California. The price of carbon credits tends to be relatively stable in mandatory markets, given that the number of credits in the market is fixed and so too is the penalty price for exceeding carbon allocations. #### Voluntary carbon markets (VCMs) VCMs function outside of any regulatory environment. In these markets, carbon credits are purchased voluntarily, often by organisations reducing emissions in line with net‑zero ambitions, rather than to comply with any legally binding reduction obligations. VCMs have been gaining traction in recent years as companies have come under increasing pressure to lower their emissions and have chosen to invest in carbon‑related projects. The value of the global VCM is projected to grow from $ 2 billion in 2022 to between $ 50 and 100 billion dollars by 2030. But the market has experienced a backlash recently from some media outlets and NGOs who suggest that many credits being supplied in the VCM lack integrity, transparency and effectiveness. In essence, the offsets derived do not reduce atmospheric carbon at the levels they claim to. A key factor in the scepticism of VCM credits lies in the perceived lack of regulation. The voluntary nature of the market, in particular the trading of credits on exchanges and the transparency around who purchases and retires what, leads many to question the effectiveness of the VCM. This has led to corporations taking the decision to abandon offsetting and replace them with a commitment to further decarbonise their own operations and value chain – a process known as **insetting**. As a result, prices of carbon credits have become extremely volatile and polarised with high quality credits trading at the levels of the mandatory market or beyond, while most markets are trading low quality credits for as little as a dollar per credit. The lack of any centralized, or even localized, regulation makes weeding out the market’s bad actors difficult. Organizations like the **ICVCM** and **VCMI** have recently put forward standards and frameworks for regulation of the VCM, aiming to instill greater integrity and transparency in the marketplace. Furthermore, **Article 6** of the Paris Agreement sets out a process by which countries and private sector companies can co‑operate together to lower carbon levels as part of each country’s nationally determined contribution (NDC). These are important steps towards regulation in the VCM and welcomed assuming they do not negatively impact the financing and innovation that free markets attract. #### What can VCMs learn from the mandatory markets? In general, the EU ETS has been a successful model for reducing emissions through a financial market model. By learning from schemes like the EU ETS, VCMs can develop into more mature and effective markets, playing a greater role in achieving global climate goals. ##### Regulation Mandatory carbon markets are typically regulated by governments, which set out the rules for how the market operates, including the types of projects companies must finance, the emissions that are covered and the penalties for non‑compliance. This regulation helps to ensure that the market is fair and transparent, and that it delivers on its environmental objectives. Regulatory frameworks ensure clear rules on the eligibility of projects are established, the types of credits that can be traded and the disclosure requirements for buyers and sellers. Regulation could also help to address some of the challenges facing the VCM, such as the risk of fraud and the lack of liquidity in some markets. ##### Mandatory participation One of the key features of mandatory carbon markets is that they require certain companies or facilities to participate. This helps to ensure that the market has a sufficient number of participants to function effectively, covering a significant share of emissions, and that there’s a level playing field for competing businesses. Regulated VCMs would more likely encourage companies to participate in the market with fewer concerns over media, investor or consumer backlash. ##### Ratcheting down of allowable levels Another key feature of mandatory carbon markets is that the cap on emissions is typically reduced over time. This helps to ensure that emissions continue to decline in the long term by creating a strong financial incentive for this to happen. VCMs could consider mechanisms through which credits are priced relative the performance of the companies purchasing them, e.g. lower costs for those that are reducing their own emissions faster or are more transparent in their reporting. An increase in credit prices would have the knock‑on effect of incentivising companies to further reduce their emissions and more quickly. ##### A centralized approach Mandatory carbon markets typically have a centralized body that is responsible for setting standards for projects and credits, reviewing projects for eligibility and arbitrating disputes. This helps to ensure that the market is credible and that the quality of credits is high. VCMs could learn from this by developing their own centralized bodies – or perhaps a single body – to set standards, review projects and arbitrate disputes. This would help to improve the quality and credibility of the VCM and further incentivize participation by corporates while demonstrating greater integrity to concerned stakeholders such as NGOs or the media. ##### Public disclosure Companies that are required to participate in mandatory carbon markets are typically required to publicly disclose their emissions and their purchases of carbon credits. This helps to ensure that the market is transparent and that companies are accountable for their emissions. VCMs could learn from this by encouraging companies to publicly disclose their purchases of carbon credits. This would help to increase the transparency of the market and build trust among participants. A robust market infrastructure, including a central registry of allowances and credits, and a system for monitoring and enforcing compliance would also improve integrity in VCMs. ##### Getting the balance right A lack of regulation in any market leaves it open to abuse, volatility and uncertainty. We’ve seen this for decades in just about every other form of market including global financial markets. But too much regulation can stifle innovation and capital investment. VCMs require a level of regulation that provides market participants with the confidence they need to take part without driving innovation and finance away through bureaucracy and complexity. It can be easy to forget that at the heart of the voluntary carbon markets sits the challenge of averting a climate disaster that’s already well underway with alarming tipping points having already been passed. Financially incentivizing those who wish to tackle the problem is perhaps the only chance we have in solving it. And providing an appropriately regulated platform through which to do it seems like an imperative next step. ### Can the GCC’s largest companies demonstrate impact in the year of COP? (2023-10-15) [Read on website](https://carbonaires.com/news-media/can-the-gcc-s-largest-companies-demonstrate-impact-in-the-year-of-cop) #### GCC Corporate Leadership at COP For just the second time in its nearly 30‑year history, the United Nations Climate Change Conference (COP) will take place in an Arabian Gulf country. And as the UAE makes its final preparations to host COP28 in Dubai, the world's attention and scrutiny is turning to the region. In this backdrop, business and political leaders from across the world, including Michael Bloomberg and US Climate Envoy John Kerry, have stressed the fundamental need to find climate solutions that encourage real progress in all nations and across all industries. Many commentators highlight that much has changed in the region since Qatar hosted COP18, 11 years ago. Reducing carbon emissions and building a more sustainable future energy mix is at the heart of the diversification strategies being rolled out across the Gulf. ### The GCC can lead the global push toward high‑integrity carbon credit markets (2023-10-12) [Read on website](https://carbonaires.com/news-media/the-gcc-can-lead-the-global-push-toward-high-integrity-carbon-credit-markets) #### GCC Leadership in Carbon Markets The global economy is facing a difficult balancing act. Maintaining economic growth and energy security, while reducing carbon emissions in line with net‑zero targets, is a complex and challenging task. To achieve it requires enormous levels of investment, innovative thinking, and coherent national, regional and global strategies that are supported by robust regulations and policies. Investment and innovative thinking are the driving forces behind diversification strategies that are rewiring the Gulf economies, widening the range of sectors driving economic growth while reducing reliance on carbon‑intensive forms of energy production. As we approach COP28, the world’s attention is turning to the GCC and assessing the impact that its net‑zero initiatives are having on reducing carbon emissions. The recent investment and cooperation between GCC governments and business have shown its potential to establish a global role in voluntary carbon markets. One area of clear progress is the Gulf’s rapid adoption of voluntary carbon markets – financial markets where buyers can compensate for their hardest‑to‑abate carbon emissions by purchasing credits tied to projects that remove, reduce or avoid carbon emissions. ### Core Carbon Principles - \ (2023-08-31) [Read on website](https://carbonaires.com/news-media/core-carbon-principles-a-global-threshold-for-quality) #### ICVCM Core Carbon Principles Core Carbon Principles - "A Global Threshold for Quality" The Integrity Council for the Voluntary Carbon Market (ICVCM) recently finalised its Core Carbon Principles (CCPs). This new global benchmark for carbon offset projects aims to improve integrity and transparency in the voluntary carbon market (VCM). This unregulated market is currently valued at $ 2 bn annually and is predicted to grow to $250 bn USD by 2030. A recent report by Barclays predicts the VCM to reach a value of $1.5 tn by 2050. The new ICVCM standards define a global quality threshold for the trading of carbon credits, setting out how the VCM can reach its full potential. According to the ICVCM, “The CCP label is designed to build trust and unlock investment by making it easy for buyers to identify a high‑integrity credit no matter which carbon‑crediting program issued it, what kind of credit it is, or where it is generated.” The CCPs, first distributed in March 2022 and finalised at the end of July this year, provide definitional guidance for assessing the integrity of carbon credits. Specifically, CCP labelled offsets must fund projects that reduce and remove emissions in line with a clearly defined transition to net zero. Credits must also be robustly quantified, must prove additionality (i.e. that carbon reductions would not have occurred without the carbon offset project’s existence), they must undergo regular monitoring and reporting on realised emissions reductions and commit to removals over at least a 40‑year timeframe. Credits will receive the CCP label only if both the development project from which the credits were issued **and** the type of offset – e.g. blue carbon – are assessed by the Integrity Council and meet its standard for high‑integrity. The CCPs provide clear guidance for offset buyers to purchase with confidence and project developers to command a fair price by outlining precise and achievable definitions of high quality and integrity. This will build market confidence while at the same time demonstrating the positive socio‑economic and environmental benefits that carbon projects directly generate. An efficiently regulated and managed VCM has the potential to mobilise the investment required to reduce and remove carbon dioxide from the atmosphere at the levels needed to avert a climate catastrophe, in line with the Paris Agreement. When implemented alongside emission reduction strategies, high‑quality offset projects are an essential component of meeting this massive global challenge. Carbonaires welcomes the issuance of the CCPs. They align with our philosophy, business model and core values in promoting high‑integrity carbon offsets in a VCM that is based on science, motivated by ethics, delivered through technology and enabled by finance. ### Profit With Purpose: Eight Tips For Green Entrepreneurs In The GCC (2023-08-20) [Read on website](https://carbonaires.com/news-media/profit-with-purpose-eight-tips-for-green-entrepreneurs-in-the-gcc) #### Green Entrepreneurship in the GCC The GCC is rapidly emerging as a leading global hub for green entrepreneurs, individuals who put sustainability, emissions reduction, and ethical practices at the heart of their businesses. We can see the region’s commitment to green innovation in the surge of strategic partnerships and investment deals in the space. This, in turn, can be viewed as a core part of larger investment diversification strategies that are opening unprecedented opportunities for young, ambitious green entrepreneurs looking to make a positive impact at scale. ### Carbonaires’ Co‑founder Discusses High‑Quality Offsets in The Independent (2023-08-03) [Read on website](https://carbonaires.com/news-media/carbonaires-cofounder-on-high-quality-offsets) #### The Imperative of High-Quality Offsets An insightful piece was featured in The Independent over the weekend that delved into the UK’s approach to carbon reduction and offsetting. At the heart of the discussion was Carbonaires’ Founder and Managing Partner, Rasih Ozturkmen, who was quoted elaborating on the imperative role high‑integrity and top‑quality offsets play in addressing the climate crisis. > The numbers are clear. We cannot meet or even get close to the carbon levels needed without complementary approaches like high‑integrity and high‑quality offsets. We need to apply science, ethics, technology, and finance to rectify the issues present in today's market. The objective is to augment the global reduction in energy usage and emissions with schemes that minimize carbon and impart additional societal, environmental, and economic value. It is evident that a principled, transparent, and just approach to offsetting can help most companies attain this objective. > — Rasih Ozturkmen, Carbonaires Furthermore, the article emphasized: “Solving the climate crisis is not cheap, and someone (everyone) has got to pay for it – either now or at an exorbitantly escalated cost later, when the critical juncture is unmistakably surpassed.” This resonates deeply with Carbonaires’ ethos. The belief stands that confronting the climate issue head‑on now is both financially astute and environmentally considerate. Yet, this proactive approach should be transparent and capable of adding real value. ### Existing and emerging technologies for Carbon Dioxide Removal (CDR) (2023-07-31) [Read on website](https://carbonaires.com/news-media/existing-and-emerging-technologies-for-carbon-dioxide-removal-cdr) #### Introduction Existing and emerging technologies for Carbon Dioxide Removal (CDR) Throughout the existence of our planet, natural systems have evolved and developed effective mechanisms for balancing carbon dioxide levels in the atmosphere. From the carbon cycle to the actions of plants and marine organisms, nature has been regulating CO₂ levels for millions of years. However, with the rapid rise of human‑induced greenhouse gas emissions, natural systems are struggling to keep up. As a result, there has been a growing focus on the emergence of man‑made engineered solutions specifically designed to tackle the additional burden of excess carbon dioxide. These innovative approaches aim to directly capture and remove CO₂ from the atmosphere or enhance natural processes that absorb and store carbon. By leveraging engineered capture and storage solutions, the capacity of natural systems can be supplemented. Each technology comes with opportunities and challenges which this edition of the newsletter explores further. It is also worth acknowledging other approaches to carbon reduction such as bioenergy with carbon capture and storage (BECCS), biochar, ocean fertilisation and enhanced ocean alkalinity, all of which can play a crucial role in lowering CO₂. While natural systems will continue to play a vital role, the development and deployment of human‑engineered technologies provide essential ways to lower CO₂ and combat climate change. Tackling the carbon problem means looking at two fundamental aspects: the capture of carbon from the air and its subsequent storage, and the avoidance of carbon emissions in the first place. We explore three promising carbon capture approaches in this newsletter: **direct air capture (DAC)**, **mineralisation for CO₂ storage** and **enhanced weathering**. #### Direct Air Capture Direct Air Capture (DAC) is an innovative technology in which CO₂ is directly extracted from the ambient air, making it a versatile solution for carbon reduction. Unlike traditional carbon capture methods, DAC can target emissions from any source, including transportation and industrial processes. DAC involves pulling in air, filtering out particulate matter and using solid or liquid solvents to capture the CO₂, which can be stored underground, used in industrial processes or converted into valuable products. DAC’s versatility and global applicability make it a scalable solution for CO₂ removal. However, challenges remain, including the energy‑intensive nature of the process and the need for sustainable energy sources. Research efforts are focused on finding cost‑effective solutions, developing more reusable sorbents and optimizing the overall process to enhance efficiency and reduce costs. The carbon that is captured can be permanently stored in deep geological formations or used for a variety of applications, such as use in building materials. DAC therefore provides a unique pathway for achieving negative emissions and has the potential to contribute to our fight against climate change. Continued investment and development in DAC technologies will be essential in realizing its full potential and helping us transition towards a more sustainable and carbon‑neutral future. #### Enhanced Weathering Enhanced weathering speeds up natural processes that remove carbon dioxide from the atmosphere by grinding and spreading certain minerals, such as olivine or serpentine, which react with CO₂ and permanently store it as solid carbonate compounds. This approach not only captures CO₂ but also offers potential benefits for soil health, water quality and agriculture. One of the key advantages of enhanced weathering is its ability to use readily available and abundant minerals, making it a potentially cost‑effective and scalable solution for CO₂ removal and storage. By accelerating natural weathering processes, this technique holds immense potential to remove carbon dioxide from the atmosphere and promote a more sustainable future. It can be integrated into existing land management practices, providing opportunities for improved soil fertility, increased crop yields and subsequent improved food security. However, there are challenges that need to be addressed for effective deployment of enhanced weathering. Gathering a large volume of minerals for widespread implementation can be logistically complex. Additionally, the grinding and distribution of minerals require energy, which could lead to carbon emissions unless renewable energy sources are adopted. Furthermore, the type and storage of captured CO₂ needs careful management to prevent its release back into the atmosphere. Depending on the type of rock selected, there are potentially toxic contaminants within the rocks, in particular heavy metals. Therefore, stringent monitoring and verification processes are necessary to ensure the effectiveness of the carbon storage. Research and development efforts are helping to improve our understanding of mineral selection, distribution methods and potential environmental impacts, guiding how we can effectively deploy enhanced weathering as a CO₂ removal technology. #### Mineralisation for CO₂ Storage Mineralisation for CO₂ storage, also sometimes referred to as mineral carbonation, reduces CO₂ levels in the atmosphere by permanently storing carbon dioxide in solid minerals. Through the process, CO₂ is captured either from industrial emissions or directly from the air where it is then reacted with certain types of rocks, like basalt, creating solid carbonates, with the CO₂ being either absorbed or removed from the air. The process then involves injecting the CO₂ dissolved in water into underground geological formations. These carbonates can be safely stored for centuries or millennia, preventing the CO₂ from being released back into the atmosphere, meaning mineral carbonation is a permanent form of CO₂ storage. Mineral carbonation has several benefits as a method of carbon storage. The rocks needed for the process are abundant, making it a potentially scalable solution. This method shows promise as an effective way to reduce CO₂ levels and combat climate change, and further research and development will enhance the efficiency, cost‑effectiveness and environmental sustainability of mineral carbonation technology. As the world grapples with the urgent challenge of mitigating climate change, technological advancements in carbon dioxide removal and storage offer promising solutions. To realise their full potential, it is essential to focus on continued research, development and widespread deployment of these innovative technologies, alongside advancements in materials and engineering. By harnessing and refining such processes, we can complement natural carbon sequestration and industrial emission reductions, ultimately averting a climate disaster and effectively combating global heating. ### The Power of High Integrity Carbon Credits: Science, Ethics, and Technology (2023-06-18) [Read on website](https://carbonaires.com/news-media/the-power-of-high-integrity-carbon-credits-science-ethics-and-technology) #### Introduction The Power of High Integrity Carbon Credits: Science, Ethics, and Technology In the global battle against climate change, the carbon credit market has emerged as an important enabling force helping organisations, governments and individuals to offset emissions. We believe that generating real impact with offsets is best achieved with high‑integrity credits. #### High‑Integrity Carbon Credits: Setting the Standard High‑integrity carbon credit projects should undergo rigorous due diligence processes that incorporate the widely accepted market principles of: **Additionality**, **Permanence & Leakage**, **Double Counting**, **Transparency**, and **Verifiability**. ‘Additionality’ ensures that credits only reflect emission reductions that wouldn’t have happened without the project. ‘Permanence & Leakage’ guarantees that projects continuously reduce carbon over a specified period without premature reversals. ‘Double Counting’ prevents instances where carbon reductions are claimed more than once. **Transparency** and **Verifiability** mandate that all information related to projects and credits is accurate, available publicly and independently verified. #### Spot Market and Long‑Term Investments: Market differentiation and integrity Carbon credit trading takes place in a complex market landscape: this ranges from the spot market to long‑term investment contracts in carbon credit origin projects with shared outcomes for both the developers and off‑takers. These long‑term commitments hold particular significance for the maintenance of high‑integrity. #### Science, Ethics, and Technology: The Bedrock of High integrity We also believe that high‑integrity carbon credits should undergo due diligence on three foundational pillars: **science**, **ethics**, and **technology**. *Science* provides the methodologies and tools to measure and validate carbon accurately. *Ethics* ensures the application of fair practices, aligning targets with the Sustainable Development Goals, promoting social equity, and demanding transparency in all operations. *Technology* ensures reliability and provides efficiency and scalability. It acts as an enabler, streamlining the process and maintaining the integrity of transactions. #### High‑integrity carbon credits offer a powerful tool in the fight against climate change At Carbonaires, we are committed to championing the transition towards high‑integrity carbon credits. Our rigorous due diligence and steadfast belief in transparency helps work towards a more robust, reliable and efficient voluntary carbon market. As we stand on the front of this transition, we remain unwavering in our commitment to doing the right thing, the right way. ### Sustainable Business Magazine: How Klarna, HUSK and Carbonaires are tackling climate change with biochar (2023-05-14) [Read on website](https://carbonaires.com/news-media/how-klarna-husk-and-carbonaires-are-tackling-climate-change-with-biochar) #### Biochar Production Partnership Carbon asset manager Carbonaires is teaming up with biochar specialists HUSK and fintech giant Klarna to establish a cutting‑edge biochar production facility in Cambodia. Carbonaires are providing financial support to HUSK to build the plant which will generate high quality carbon credits that Klarna will purchase as part of its carbon reduction initiative. The project aims to extract carbon dioxide from the atmosphere and utilise the resulting biochar to create carbon‑based fertilisers that will rejuvenate depleted soils. The investment will help boost biochar production in Southeast Asia and support the local economy and community. Read more ### Pioneering Biochar Production: Carbonaires, Klarna and HUSK Tackle Climate Change in Cambodia (2023-05-09) [Read on website](https://carbonaires.com/news-media/pioneering-biochar-production-carbonaires-klarna-and-husk-tackle-climate-change-in-cambodia) #### Cambodia Biochar Initiative Pioneering Biochar Production: Carbonaires, Klarna and HUSK Tackle Climate Change in Cambodia In this edition of our LinkedIn newsletter, we explore the groundbreaking partnership between Carbonaires, Klarna and HUSK. This collaboration showcases their shared commitment to innovation and excellence while tackling pressing sustainability challenges through cutting‑edge solutions. Biochar, a charcoal‑like substance created by heating organic materials in a low‑oxygen environment, has been gaining attention for its potential to improve soil health, boost crop yields and sequester carbon for centuries. By establishing a state‑of‑the‑art biochar production facility in Cambodia, Carbonaires, Klarna and HUSK are collaborating to transform rice husks, a common agricultural waste product in the region, into this valuable resource. This partnership is particularly noteworthy for its emphasis on leveraging the power of voluntary carbon markets. As an essential driver for transitioning to a greener global economy, these markets provide financial incentives for companies to invest in sustainable solutions. The recent endorsement of guidelines aimed at ensuring the reliability and integrity of carbon credits highlights the growing significance of voluntary carbon markets as a force for change. By combining expertise in carbon asset management, financial technologies and biochar production, Carbonaires, Klarna and HUSK showcase the potential of collaborative efforts in addressing climate change and fostering a circular economy. This project not only demonstrates the importance of trust and transparency in sustainable business practices but also serves as an inspiration for future endeavours in the fight against climate change. As we continue to explore innovative solutions and partnerships in the realm of sustainable business, we invite you to join the conversation and share your insights on this exciting initiative. By working together and maintaining a focus on trust and transparency, we can contribute to a more sustainable and resilient future. Stay tuned for more informative articles and discussions in our upcoming newsletters. ### Carbonaires partners with Klarna and HUSK to develop biochar plant in Cambodia (2023-05-01) [Read on website](https://carbonaires.com/news-media/carbonaires-klarna-husk) #### Partnership with Klarna and HUSK Carbonaires, the London‑based carbon asset management company, today announces it has entered into a partnership with Klarna, a leading global payments provider and shopping service, and the biochar innovation business HUSK. Under the arrangement, Carbonaires are supporting HUSK with the funding of machinery in a state‑of‑the‑art biochar production facility in Cambodia. The new plant will generate high‑quality carbon credits to be purchased by Klarna as part of their carbon reduction programme. The project will remove carbon dioxide from the atmosphere with the biochar then being used to make carbon‑based fertilisers to regenerate depleted soils. Biochar is plant‑based charcoal made by heating organic waste materials under a controlled process that leads to carbon being sequestered from the air for centuries, thereby lowering atmospheric carbon dioxide levels. Biochar also has highly beneficial agricultural properties where it can be used to replace synthetic fertilisers, enhance water conservation and boost farmers' yields. Carbonaires was founded in 2021 by a group of entrepreneurial investors and ESG ambassadors to finance high‑quality, high‑integrity carbon reduction projects. Through its proven streaming model, the company provides funding to enterprises that demonstrably reduce atmospheric carbon, in turn helping businesses to strengthen their financial viability. The carbon credits generated through projects are made available for purchase to corporations who have committed to a transparent and verifiable carbon reduction plan. A portion of the carbon credits’ value is given to the project’s workforce. This fairer and more equitable business model is what Carbonaires call Carbon Democratisation. Klarna is a global shopping platform and payments provider, accelerating commerce for 500,000 retail partners and making it easier and safer for 150 million consumers worldwide to shop and pay for their purchases. The company is active in 45 markets, with over 5,000 employees worldwide. In 2021, Klarna set up the Climate Transformation Fund with Milkywire, through which it actively invests in carbon removal solutions as part of its carbon reduction strategy. Funded by the proceeds of its internal carbon tax, Klarna supports a wide range of climate projects that help to mitigate the negative impacts of the climate crisis. HUSK, founded by female social entrepreneurs Heloise Buckland and Carol Rius, specialise in the development of innovative carbon‑based fertiliser production using biochar made from rice husks – a natural by‑product of the rice processing industry. HUSK has developed an innovative circular economy solution for rural communities in emerging markets providing inputs and training on building soil carbon as part of the transition to regenerative agriculture in emerging markets. The products improve soil quality, increase yields and help communities generate additional revenues. > We're thrilled to be partnering with HUSK and Klarna. This collaboration is a great example of what can be achieved when companies share a vision to tackle an issue as devastating as climate change. In this first project together, Carbonaires are supporting HUSK in deploying their innovative biochar solution in Cambodia, benefiting both the local community and the planet. We look forward to working with HUSK and sustainability‑focused companies like Klarna on this and other important carbon reduction projects going forward. > — Michael Spenley, co‑founder of Carbonaires ### Preserving peatlands for a sustainable future (2023-04-16) [Read on website](https://carbonaires.com/news-media/preserving-peatlands-for-a-sustainable-future) #### Peatland Conservation Our oceans and coastal ecosystems play a vital role in regulating the climate and providing a home for a diverse array of plants and animals. Increasingly, these wonderfully complex ecosystems are being adversely impacted by human activity. This includes overfishing, waste, pollution and habitat destruction. Blue carbon projects rebuild natural marine environments, which are also the largest carbon sinks on Earth, in two ways. 80% of the Southern Hemisphere and 60% of the Northern Hemisphere is covered in water, in which lies an enormous but underutilised opportunity for sequestering and storing carbon. “Today, blue carbon strategies of mitigating greenhouse gas emissions through the conservation and restoration of [marine] habitats have been adopted by many nations as a key means to their commitments under the Paris Agreement,” says Professor Duarte of Marine Science at KAUST. And the World Economic Forum reported last year that interest in blue carbon projects had reached an all‑time high. Some have observed that the integrity of projects remains a concern. Blue carbon is a long way from fulfilling its potential. However there are many good examples of blue carbon projects being successfully implemented. In Saudi Arabia, a project has begun restoring and preserving mangroves. Growing optimally in brackish waters, mangroves absorb large volumes of carbon and provide critical habitats for many marine species. Red Sea mangroves are six times more effective at absorbing carbon than those in other parts of the world, which makes Saudi Arabia, with its vast coastline, an excellent region for blue carbon projects. A recent study by Saudi Arabia’s King Abdullah University of Science and Technology evidenced the importance of international mangrove restoration, finding that “ambitious global targets for mangrove restoration could, if successful, deliver global benefits of carbon sequestration, fisheries production, biodiversity and coastal protection.” A great example has been the work in the Mekong Delta.  1,500 km² of mangrove forests have been restored following the destruction of around 55% during the Vietnam War. Today, these mangroves provide habitats for diverse species of marine wildlife and sequester 24 million tonnes of carbon each year, the equivalent to 10% of Vietnam’s annual emissions. Mangroves also play a vital role in protecting coastal communities from storms and erosion and their value is placed globally at least US$1.6 billion. And by sequestrating six times more carbon than land‑based forests, the environmental value of mangroves is immeasurable. The list of benefits derived from blue carbon projects is long. In addition to absorbing carbon 30 times faster than land‑based forests, they also protect against storms and soil erosion, filter pollutants from water, enhance habitats for a variety of species and contribute to food security. Misui’s investment in Japanese seagrass is a great example of the benefits of these projects. The preservation of seagrass across the Japanese coastline has been instrumental in providing food security for local Green Sea Turtle populations, stabilising the sea floor, and improving biodiversity. Blue carbon projects also ‘localise’ net‑zero commitments in coastal regions, meaning that local communities benefit through the job opportunities, infrastructure investment and improved environment quality. By preserving and protecting vital marine ecosystems, we reduce carbon levels, help local businesses and communities, and protect marine and land environments. A clear win‑win‑win for the economy, society, and the planet. ### Blue Carbon: Protecting our oceans and coastal ecosystems (2023-04-02) [Read on website](https://carbonaires.com/news-media/blue-carbon-protecting-our-oceans-and-coastal-ecosystems) #### Ocean & Coastal Carbon Sequestration Our oceans and coastal ecosystems play a vital role in regulating the climate and providing a home for a diverse array of plants and animals. Increasingly, these wonderfully complex ecosystems are being adversely impacted by human activity. This includes overfishing, waste, pollution and habitat destruction. Blue carbon projects rebuild natural marine environments, which are also the largest carbon sinks on Earth, in two ways. 80% of the Southern Hemisphere and 60% of the Northern Hemisphere is covered in water, in which lies an enormous but underutilised opportunity for sequestering and storing carbon.  “Today, blue carbon strategies of mitigating greenhouse gas emissions through the conservation and restoration of [marine] habitats have been adopted by many nations as a key means to their commitments under the Paris Agreement,” says Professor Duarte of Marine Science at KAUST.  And the World Economic Forum reported last year that interest in blue carbon projects had reached an all‑time high.  Some have observed that the integrity of projects remains a concern.  Blue carbon is a long way from fulfilling its potential. However there are many good examples of blue carbon projects being successfully implemented.  In Saudi Arabia, a project has begun restoring and preserving mangroves.  Growing optimally in brackish waters, mangroves absorb large volumes of carbon and provide critical habitats for many marine species.  Red Sea mangroves are six times more effective at absorbing carbon than those in other parts of the world, which makes Saudi Arabia, with its vast coastline, an excellent region for blue carbon projects. A recent study by Saudi Arabia’s King Abdullah University of Science and Technology evidenced the importance of international mangrove restoration, finding that “ambitious global targets for mangrove restoration could, if successful, deliver global benefits of carbon sequestration, fisheries production, biodiversity and coastal protection.”  A great example has been the work in the Mekong Delta.  1,500 km² of mangrove forests have been restored following the destruction of around 55% during the Vietnam War.  Today, these mangroves provide habitats for diverse species of marine wildlife and sequester 24 million tonnes of carbon each year, the equivalent to 10% of Vietnam’s annual emissions. Mangroves also play a vital role in protecting coastal communities from storms and erosion and their value is placed globally at least US$1.6 billion.  And by sequestrating six times more carbon than land‑based forests, the environmental value of mangroves is immeasurable. The list of benefits derived from blue carbon projects is long.  In addition to absorbing carbon 30 times faster than land‑based forests, they also protect against storms and soil erosion, filter pollutants from water, enhance habitats for a variety of species and contribute to food security.  Misui’s investment in Japanese seagrass is a great example of the benefits of these projects.  The preservation of seagrass across the Japanese coastline has been instrumental in providing food security for local Green Sea Turtle populations, stabilising the sea floor, and improving biodiversity. Blue carbon projects also ‘localise’ net‑zero commitments in coastal regions, meaning that local communities benefit through the job opportunities, infrastructure investment and improved environment quality.  By preserving and protecting vital marine ecosystems, we reduce carbon levels, help local businesses and communities, and protect marine and land environments.  A clear win‑win‑win for the economy, society, and the planet. ### Responsible carbon offsets: Essential in the fight against climate change (2023-02-14) [Read on website](https://carbonaires.com/news-media/responsible-carbon-offsets-essential-in-the-fight-against-climate-change) #### The Role of Carbon Offsets As companies increasingly prioritise sustainability and strive to meet their carbon reduction goals, carbon offsets have emerged as an important tool in the fight against climate change.  But not all carbon offsets are created equal.  For offsets to truly make a difference, they must be responsibly sourced and verifiable. Analysis by McKinsey found that global demand for voluntary carbon credits could grow by a factor of 15 by 2030 and a factor of 100 by 2050 from 2020 figures.  With such projections, it is essential that investing in carbon offsets is done responsibly.  While regulatory structures still lag behind the pace of this dynamic worldwide market, it is important for investors to set an example with a responsible, ethical approach to carbon offsetting. Fortunately, more companies are embracing the “no‑greenwashing” approach to which Carbonaires is deeply committed.  This approach recognises that offsets can be a uniquely credible and effective tool – when used responsibly and smartly.  By investing in verified offset projects, such as reforestation or clean energy initiatives, companies can offset their own emissions and make a tangible impact on reducing greenhouse gases. One such project that sets a great example is the partnership between McKinsey, Stripe, Alphabet, Shopify and Meta in which they have made a $925 million carbon removal commitment over eight years. But the benefits of responsible carbon offsets go beyond just reducing emissions.  Investment in these projects often bring additional social and environmental benefits, such as improved air quality, water conservation and job creation in local communities. As the demand for carbon credits continues to grow, it’s crucial that companies prioritise responsible offsets that meet the highest standards of transparency and integrity.  By doing so, they can not only meet their own sustainability targets, but drive positive change at a global scale. ### Uncovering the benefits of biochar: A sustainable solution for a better tomorrow (2023-01-31) [Read on website](https://carbonaires.com/news-media/uncovering-the-benefits-of-biochar-a-sustainable-solution-for-a-better-tomorrow) #### Biochar Benefits and Applications Biochar is a versatile substance that has the potential to play a transformative role in sustainability, waste reduction and decarbonisation.  Put simply, #biochar is a type of charcoal that is usually produced from the pyrolysis of biomass.  Its wide range of applications make it an exciting and promising technology for promoting circularity and other sustainable practices. A notable benefit of biochar is its ability to improve soil health.  When added to soil, biochar can increase nutrient retention, water retention and soil structure, leading to improved plant growth and crop yields.  It can help to reduce the need for chemical fertilisers, which can have a negative impact on the environment.  This makes biochar a valuable tool for farmers and gardeners looking to boost land productivity. Biochar is also an effective means of sequestering carbon.  When biochar is produced from the pyrolysis of #biomass, carbon is stored in the biochar in an inert form.  This means that the CO₂ and methane that would otherwise be released during decomposition of waste biomass is captured during the pyrolysis process and prevented from reaching the atmosphere (carbon is captured in an inert form in the biochar, and methane is captured in the machine).  This makes it an attractive option for offsetting carbon emissions and mitigating climate change.  By investing in biochar projects, we can help to reduce greenhouse gas emissions and slow the pace of climate change. Waste reduction is another important benefit of biochar.  By converting biomass into biochar, we can turn a waste product into a valuable resource.  This can help to reduce the environmental impact of waste and create new economic opportunities.  Biochar production can also become a valuable source of income for communities that have access to biomass, and can help to reduce waste that ends up in landfills. Whether it’s through improving soil health, sequestering carbon, or reducing waste, biochar is a versatile, powerful tool that can help us to create a better world for our children and future generations. The numbers add up financially when it comes to investing in biochar projects.  Unsurprisingly, there was a 7.7% decline in the global biochar market owing to the Covid‑19 pandemic, according to Fortune Business Insights.  But since economies have reopened and the global economic environment has improved, especially in green technologies, the global biochar market is expected to grow from 2021’s US$ 164.5 million figure to US$ 365 million by 2028.  This represents a compound annual growth rate of 12.1%. At Carbonaires, we are excited about the potential of biochar and are committed to supporting projects that generate carbon credits through biochar production.  By investing in these projects, we can help to create a more sustainable future while generating revenue for our investors.  Biochar is the new black gold and we are confident it will play a critical role in the transition to a more sustainable world. If you're interested in learning more about biochar projects and create a more sustainable future, please contact us at info@carbonaires.com.  Together, we can help to create a better world for ourselves and future generations. ### A round-up of 2023’s top ESG business trends (2023-01-31) [Read on website](https://carbonaires.com/news-media/a-round-up-of-2023s-top-esg-business-trends) #### Introduction In this ever‑changing business landscape we are here to help keep you informed on the major trends and themes that will shape the way we work in the year ahead, and beyond.  Here is a round‑up of insights from some of the world’s leading consulting firms, including BCG, McKinsey, Deloitte, KPMG and PwC. #### ESG investing continues to grow Continued growth in ESG investing is the one trend that is widely forecast across the leading consulting firms.  According to a report by Boston Consulting Group (BCG), total assets under management (AUM) in ESG funds reached $30 trillion in 2020.  This trend is expected to continue in the coming year, and beyond.  The BCG report notes that ESG investing is “no longer a niche practice”. The BCG report emphasizes the importance of the sector in addressing societal issues such as climate change and diversity, noting that large investors are driving this positive trend.  However, it also highlights the need for companies to have a clear understanding of how to effectively implement sustainable business practices in order to see tangible financial results.  This is where Carbonaires’ principle of “no greenwash” becomes crucial. #### Corporate sustainability becomes a key focus Another trend is the growth of corporate sustainability.  As companies seek to reduce their environmental impact, improve their social responsibility, and increase transparency and accountability, sustainability will become a key business focus in 2023.  According to a November 2022 report by McKinsey, companies that prioritise sustainability are more likely to outperform their peers financially, making it a smart business decision, as well as a moral one. Just as BCG highlights the importance of the private sector in addressing the big issues, such as climate change, McKinsey’s report says that “business‑led innovation” is a major reason that companies will be crucial in any successful undertaking for sustainable, inclusive growth. #### Sustainable finance grows in importance Sustainable finance, which refers to financial instruments and practices that support sustainability goals, is also expected to become more important in 2023.  As companies and investors look for ways to finance sustainability efforts and support the transition to a low‑carbon economy, sustainable finance options (such as green bonds and impact investing) will likely see increased demand.  A report by Deloitte found that the market for green bonds grew to more than $250 billion in 2020, and this trend is expected to continue in the coming year. The Deloitte report says businesses need to ensure their sustainable investments are undertaken with “robust product governance and high‑quality independent assurance” as the main tools for “managing conduct risk in the green bond market.” “For the market to function effectively in the long term, it is essential that the maturity and implementation of the product governance and assurance keeps pace with the size and scale of the green bond market,” say the report’s authors. #### Green bonds become more popular This financing tool is also forecasted to see increased popularity in 2023.  Green bonds are used to finance environmentally friendly projects, and are expected to become more prevalent as companies look for ways to finance their sustainability efforts.  According to insights from Deloitte, KPMG says the market for green bonds grew by almost 20% in 2020 – and this trend is expected to continue in the coming year. As well as green bonds, Ganesan Kolandevelu, KPMG Malaysia’s head of climate change and sustainability services, urges diversity in environmentally friendly financing options.  While green bonds, green equity funds and green loans have paved the way for investors to inject money into financing sustainable projects, in order to reach anywhere near the level of funding needed, other financing methods need to be included in the equation. Kolandevelu says these could include “emerging green products, such as ‘green securitisation’, which is the bundling of green loans into securities, enabling aggregation of multiple small‑scale loans helping to attract a different investor base; and ‘green leasing/renting’, such as green property leases, green car leasing, energy‑efficient leasing and green mortgages.” #### Supply chain sustainability becomes more important Finally, PwC highlights the increasing importance of supply chain sustainability in the coming year.  Businesses will seek to reduce their environmental impact and improve social responsibility throughout their supply chains.  Supply chain sustainability will become a key consideration for procurement and chain management.  This trend is expected to have an impact across industries such as consumer goods, where the sustainability of the supply chain can have a significant impact on the company’s overall ESG performance. The report says that there is a challenge to be overcome in dealing with Scope 3 emissions, which are out of the control of a firm.  However, the report goes on to advise on how to “build sustainability as a fulcrum of growth” by forging “partnerships with suppliers on their biggest sustainability challenges and opportunities.” ### Tackling Climate Change in the MENA Region (2023-01-31) [Read on website](https://carbonaires.com/news-media/tackling-climate-change-in-the-mena-region) #### Introduction Tackling Climate Change in the MENA Region In this newsletter, we look at climate change mitigation in the dynamic Middle East & North Africa (MENA) region, examining a range of public and private sector initiatives. With COP27 being held in Egypt’s coastal resort of Sharm el Sheikh and 2023’s COP28 scheduled to be held in Dubai, as well as sustainability concerns being raised with regard to the multiple construction projects for the Qatar World Cup, the MENA region is in the global spotlight and plenty of questions about climate change mitigation and environmental stewardship are emerging. IRENA (International Renewable Energy Agency) estimates in its latest World Energy Transitions Outlook that the MENA region could obtain almost 26 percent of its primary energy supply from renewable sources by 2050. This figure is estimated by IRENA to be up to 53 percent in the power sector. If the region can meet these targets, IRENA estimates a reduction in CO₂ emissions equivalent to 1.1 gigatonnes per year. #### Government targets across the region In many parts of the MENA region, government targets are lagging behind jurisdictions in Western Europe and North America when it comes to setting various climate targets. It is common for MENA governments to let market forces influence the adoption of climate change mitigation and greenhouse gas emissions, instead of making big state interventions. However, more targets are now being set by different governments, especially for reducing emissions and increasing the role of renewables in the energy mix. For example, the UAE continues to revise its emission reduction targets to become increasingly more ambitious. The latest target equates to avoiding emitting 93.2 million tonnes of CO₂ by 2030. By 2030, the UAE hopes to achieve 30 percent clean energy and 75 percent by 2050, by removing the country’s economy away from the oil that has sustained it for so many years. Across the border in Saudi Arabia, the 2030 target is to cut carbon emissions by more than 278 million tonnes annually. Another powerful oil state, its renewable sector target is even more ambitious than the UAE – the kingdom aims to eliminate oil from power production by 2030. In 2022, Egypt revised its carbon reduction targets. It does not set an economy‑wide target for carbon reduction; instead the government set quantified emission goals for the oil and gas, electricity generation and transport sectors. However, in regard to the country’s energy mix, the government has set an overall target of 42 percent renewables by 2030. Wind energy is growing in prominence in the MENA region. Saudi Arabia, Egypt and Morocco, each plan to add more than a gigawatt of wind power to their respective energy mixes by 2026, according to a report by the Global Wind Energy Council. What are businesses in the MENA region doing to mitigate climate change? A big motivator for many businesses in the MENA region that export to the European market is the requirement to comply with the EU’s Carbon Border Adjustment Mechanism. Failure to meet these stringent requirements affects the ability to export to Europe. Public‑private partnerships play a prominent role in sustainable development investment in the region. Perhaps the biggest and most prominent example is the NEOM development in Saudi Arabia. It is the flagship project for Saudi’s Vision 2030 initiative, which was launched in 2016 to unlock potential by “creating a diversified, innovative and world leading nation, for the benefit of future generations.” NEOM projects involve such initiatives as smart cities powered entirely by renewable energy and zero‑emission transport solutions. They are attracting global investors – in November 2022, NEOM announced investment from German and French partners in water, energy and advanced manufacturing. Saudi Arabia’s Red Sea Global, a major development on the Red Sea coast, aims to align its activities with all 17 Sustainable Development Goals and state‑owned enterprises such as Saudi Aramco has made ESG goals a matter of critical importance to balance profitability, environmental protection and the growth of communities where it operates. Technology development and investment can play a more important role in helping meet climate goals in the MENA region. For example, Mai Abdellahm, President – North Africa for GE International Markets, says it is “important to focus on technology and act with urgency by building on existing technologies to reduce emissions for the purpose of reliability, affordability and security of supply of energy in the future, while also investing in new technology, such as renewables, coal‑to‑gas switching, and modernising digital and physical grid assets.” Again, public‑private partnerships are important with Abdellahm saying it is “equally important to work together with the larger ecosystem, from government entities to regulators to private companies and NGOs.” Stock exchange and financial regulator involvement is emerging MENA. The UAE Sustainable Finance Working Group comprises Federal and financial free zone regulators, relevant governmental bodies, and ministries, as well as securities exchanges within the UAE. Abu Dhabi Global Market (ADGM) launched the world’s first regulated carbon credit exchange and clearing house. Based in the UAE capital, it is the world’s first fully regulated voluntary carbon credit trading exchange and clearing house and the first regulated voluntary carbon market (VCM) in the Middle East region. ADGM has partnered with ACX, which was launched in Singapore in 2021. The initiative regulates carbon credits and offsets as emission instruments and issues licences for exchanges to operate spot and derivative markets. The regulatory framework allows companies to trade and finance carbon credits like conventional financial assets. Also in the UAE, the Dubai International Financial Centre’s (DIFC) Dubai Financial Services Authority (DFSA), launched DFSA ESG Hub. This serves as a discussion and consultation platform on ESG matters to benefit DIFC firms and the DFSA when it comes to making progress in championing sustainable finance in Dubai. In 2018, the Saudi Exchange became a partner exchange to support UN Sustainable Stock Exchanges. This means the Saudi Exchange has issued ESG disclosure guidance and promotes an ESG disclosure culture to deliver on socio‑economic and environmental responsibilities. In addition, Saudi’s Capital Market Authority, which regulates listed companies in the kingdom, published corporate governance regulations on ESG topics, including social and environmental responsibility initiatives. #### Banking sector involvement in sustainability In Qatar, the banking sector has boosted its commitment to ESG goals, according to PwC’s September 2022 Qatar Banking Sector Report. The sector has regained stability and bounced back after challenges in recent years, including the pandemic and a three‑year blockade by the UAE, Saudi Arabia, Bahrain and Egypt that ended in January 2021. “To promote this long‑term stability, we expect the sector to embrace new technology, ESG and ethical banking,” says Ahmed AlKiswani, Qatar financial services leader, PwC Middle East. “Embracing ESG frameworks and sustainable banking at the core of banking operations is the need of the hour and fortunately, banks in Qatar are ensuring that ESG is at the top of their agendas.” In May 2022, Amethis, the European Bank for Reconstruction and Development (EBRD) and SPE Capital acquired a major stake in GlobalCorp, a Cairo‑based non‑banking financial services institution. A major aim of this acquisition is to promote ESG goals within the country’s non‑banking financial services sector, particularly among small‑ and medium‑sized enterprises. Abu Dhabi Islamic Bank (ADIB) announced plans at the end of Q3 2022 to “embed sustainability and ESG frameworks into the existing Islamic banking DNA to ensure a sustainable future for the bank and its customers and the wider community it serves.” ### Voluntary Carbon Market (2023-01-31) [Read on website](https://carbonaires.com/news-media/voluntary-carbon-market) #### Introduction Voluntary Carbon Market In this newsletter, we look at the voluntary carbon market (VCM). It can be confusing, so we answer a few questions about what it is, how it works and how it will help mitigate climate change. #### What is the VCM? The VCM is a way for private entities that emit carbon to voluntarily buy and sell carbon credits, separate to the regulations and initiatives of governments. It is not new – the VCM started in the 1990s, but took time to grow in terms of the number of transactions, the number of participants, and the types of credits available. In the past five years, this market has more than doubled in size and helped fund a wide range of emission‑reducing projects worldwide. However, the VCM has not been without its critics. US comedian John Oliver is perhaps the most prominent critic of VCM, expressing scepticism about the effectiveness of using offsetting to reduce carbon emissions. However, other commentators have pointed out that different schemes, which operate on a global scale and across borders, vary in scope and quality. Analysts at Ecosystem Marketplace found that there is an “astonishing diversity” among VCMs and private entities looking to get involved in offsetting should seek out high‑quality schemes, citing the importance of transparency for true integrity. #### How does it work? Carbon emitters can offset unavoidable emissions by buying carbon credits for projects that are targeted at reducing or removing greenhouse gases in the atmosphere. Every credit corresponds to a metric ton of reduced, removed or avoided carbon dioxide or an equivalent greenhouse gas. Once a credit has been used this way, it shifts to a register for retired credits and can no longer be traded. Companies have the option of getting involved in the VCM as an individual entity or as part of an industry‑wide programme. #### Can it help mitigate climate change? VCM trading is playing an important role in mitigating climate change. It is one of many steps companies can take to help reduce carbon emissions, along with improving their own practices, making environmental stewardship the focus of all operations, and investing in the new technologies that are helping industries meet net‑zero goals. #### What are some examples of success stories within VCM? The industry‑based VCM schemes have proven to be particularly successful in helping industries that are under pressure to reduce, offset and even eliminate emissions. For example, operators in the carbon‑heavy aviation industry can get involved with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). International airlines have made the pledge to offset all CO₂ emissions they produce above a 2019 baseline level. As well as aviation, oil and gas companies were early adopters of carbon credit purchasing schemes. Financial industry players are also joining VCM initiatives as a way to help them meet their own net‑zero goals or hedge against the financial risks of the energy transition, as countries across the world move away from reliance on fossil fuels in favour of renewables, such as solar and wind power. In summary, it is important to view the VCM as a way to top up an organisation’s contributions towards genuinely reaching net zero, rather than being used as a greenwashing tool. The Climate Focus consultancy reiterates Ecosystem Marketplace’s conclusion that transparency is essential for the VCM to grow and mature at scale. Due diligence by investors is essential to ensure carbon credits can support. Should you need any further information, please do not hesitate to contact us at info@carbonaires.com. ### COP27: The practical outcomes and what this means for COP28 (2023-01-30) [Read on website](https://carbonaires.com/news-media/cop-27-the-practical-outcomes-and-what-this-means-for-cop-28) #### Introduction COP27: The practical outcomes and what this means for COP28 COP27 ran past the scheduled 18 November end date. Late‑night negotiations in Sharm el–Sheikh resulted in almost 200 countries striking a deal to establish a fund for climate loss and damage, which will give money to poorer countries that have been affected by climate change without being major contributors to global carbon emissions. What does this mean in practical terms for the countries that will have to pay and for the countries that will receive the money? Here are five major developments from COP27: 1. Before payments are made, a transitional committee will be established to make recommendations on how to operationalise the new funding arrangements and manage the fund. The first meeting of the transitional committee is expected to take place before the end of March 2023. 2. The agreement includes arrangements for providing technical assistance to developing countries that are vulnerable to the impact of climate change. This project will be managed by the UNFCCC’s Santiago Network for Loss and Damage, which has been set up to connect vulnerable countries with the assistance they need. 3. The Breakthrough Agenda was announced at COP27, which aims to accelerate decarbonisation in the power, road transport, steel, hydrogen and agriculture sectors. At this stage, details about funding figures and what countries will benefit from the agenda’s programmes are unclear, but projects are slated to include at least 50 large scale net‑zero emission industrial plants, at least 100 hydrogen valleys and cross‑border power grid developments. 4. For developing countries that rely heavily on agriculture, the Breakthrough Agenda has pledged to drive investment in agriculture research and development to address climate change, environmental degradation and food insecurity. 5. Separate from the fund for climate loss and damage, the World Bank announced a Global Shield Financing Facility at COP27. Through this facility, G7 countries aim to help V20 countries access funds for recovery from natural disasters and climate shocks. This comes on top of the World Bank’s Global Risk Financing Facility, which was set up in 2018 and operates in Africa, Asia and Small Island Developing States. This programme has been paired with US$3 billion in World Bank Lending and helped mobilise more than US$1 billion in private sector capital. #### The next steps on the road to COP28 With experts saying current policies have set the world on a course towards an annual average temperature rise of 2.7 degrees Celsius, the next 12 months before COP28 opens in Dubai are crucial. At the end of COP27, UN Secretary‑General António Guterres’ message combined optimism with realism. Guterres said that COP27 had “taken an important step towards justice” and welcomed the establishment of the loss and damage fund and its expected operationalisation in the next year. However, he added, “Clearly, this will not be enough, but it is a much‑needed political signal to rebuild broken trust.” A critical aspect of the Sharm el‑Sheikh Implementation Plan document is the call for annual investment of at least US$4 trillion in renewable energy between now and 2030 to reach net‑zero goals by 2050. In addition, the plan says that a global transformation to a low‑carbon economy is expected to require an annual investment of at least US$4–6 trillion. For the Middle East, the impact of COP27 in Sharm el‑Sheikh, followed by COP28 in Dubai could help effect change in decarbonisation in the region. The 2022 PwC Middle East Capital Projects and Infrastructure Survey found that only 11 percent of respondents among a total of more than 100 project sponsors, developers, functional/technical experts, contractors, financiers and asset managers from across the Middle East considered environmental or societal impact to be key metrics for project performance, and only 15 percent cited environmental, social and governance (ESG) factors as a priority investment area for them. According to PwC, the Middle East is expected to make more progress in the next 12 months as part of a global effort. Researchers “expect attitudes towards decarbonisation” to change in the Middle East in the lead‑up to COP28, especially as environmental priorities are being recognised by more global investors when it comes to private funding access. On a wider level, UNFCCC Global Stocktake, which assesses progress made since the 2015 Paris Agreement, will continue in 2023. The first stocktake commenced at COP26 in Glasgow last year and will conclude at COP28 in Dubai. It is currently in Phase 2, the technical assessment period, which runs until June 2023. Dialogue will focus on the stocktake’s themes of greenhouse gas mitigation, building resilience to climate change, and implementing and supporting these aims. At COP28, Phase 3 of the stocktake will involve the presentation of key findings from the first global stocktake, followed by discussions to identify opportunities to step up climate action and international support. Only time will tell if the actions over the coming year in the lead‑up to COP28 will be enough to start to rebuild broken trust, but make a real difference to decarbonising the world. ### Buy less, give more: How to have a sustainable Christmas (2022-12-12) [Read on website](https://carbonaires.com/news-media/buy-less-give-more-how-to-have-a-sustainable-christmas) #### Sustainable Holiday Giving "My father taught me that, at Christmas, there is an abundance of goodwill in the air. In the stories he tells of the Liverpool of his childhood there was always a strong sense of community, but come December that sense of collective empathy, of looking out for each other, was super‑charged. I believed in it as much as I believed in Father Christmas. And I still do now (sorry Santa, not you)." Read more ### COP27 was criticised, but what did it get right? (2022-11-22) [Read on website](https://carbonaires.com/news-media/cop-27-was-criticised-but-what-did-it-get-right) #### COP27 Achievements and Outcomes "A belief in green capitalism might bring talented people and get them to refocus. By the way, I think this is already happening for young people, but my particular hope is that mid‑career people will do the same. Carbonaires, the business of which I am a co‑founder and CEO, started as a group of mid‑career partners who stopped what they were doing and took action." Read more ## Contact - Website: https://carbonaires.com - Contact page: https://carbonaires.com/contact-us - LinkedIn: https://www.linkedin.com/company/carbonaires - Address: Moray House, 23-35 Great Titchfield Street, London W1W 7PA, United Kingdom