The future UN carbon market appears a step closer to integrating carbon removals, after regulators published their recommendations for approval at the UN Cop 28 climate conference, which starts next week.
The supervisory body for Article 6.4 of the Paris climate agreement has published its long-awaited recommendations on how to integrate carbon removals into the market, a broad successor to the Kyoto Protocol's clean development mechanism.
These and its recommendations on the methodologies to underpin the permitted carbon activities will be passed on to countries signed up to the Paris deal for approval at Cop 28, after which the final methodology and removals rules for Article 6.4 emission reductions or removals will be developed, with possible additional guidance from countries. This means that the rules could be in place by the end of next year, unless the topic is "kicked down the road, subject to more technical work through 2024", consultancy Carbon Counts director Paul Zakkour said.
The supervisory body does not exclude any removal activity types or technologies in its recommendation.
The body suggests obliging project developers to continue monitoring beyond the end of the last active crediting period, with participants permitted to submit requests to conclude post-crediting monitoring, for instance, once they have shown sufficient evidence of negligible risk of carbon removal reversals.
And "avoidable reversals" could be punished by high deductions into the "buffer pool", which is being set up to insure against the general risk of unavoidable reversals. Full compensation of reversals would be mandatory even if the buffer pool is empty.
A host country may assume the role of an activity participant in the post-crediting monitoring period, the body suggests, "providing a sovereign guarantee to apply corresponding adjustments in respect of any amount of reversals incurred".
The supervisory body has pledged to develop further guidance on monitoring requirements and timeframes for the post-crediting period, the development of a reversal risk assessment tool, and how to demonstrate and distinguish avoidable and unavoidable reversals.
The recommendations have been broadly welcomed as much improved on earlier papers.
But problematic issues in the recommendations include a loophole in the proposed monitoring rules, which allows project participants to resort to modelling instead of measurements, consultancy Perspectives Climate Group senior founding partner Axel Michaelowa said. It is unclear what happens to emissions reductions in the buffer pool should the pool grow continuously over time, such as whether they will be retained "forever", Michaelowa added. Other issues include a lack of a definition for "negligible" reversal risks, and the question of how credible a government guarantee against reversals is, he said.
Project developers interested in tapping Article 6.4 potential are heard to be waiting impatiently for the final rules to emerge. Article 6.4 carbon credits are expected to come at higher prices than those under the voluntary carbon markets.
