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Australia's Climate Active program drives ACCU demand

  • Spanish Market: Emissions
  • 12/07/24

The Australian federal government-backed Climate Active certification program continued to drive voluntary demand for Australian Carbon Credit Units (ACCUs) last year, although future growth remains uncertain as the scheme will undergo a planned reform.

Cancellations of ACCUs for Climate Active certification reached 592,837 units in 2022, down from an all-time high of 625,705 in 2021, according to estimated data that the Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently disclosed to Argus. Figures for 2023 are not yet available, according to the department, but cancellations may have reached a new high between 650,000-700,000 units, according to Argus estimates (see table). Each ACCU represents 1t of CO2 equivalent (CO2e) stored or avoided by a project.

The Clean Energy Regulator (CER) said it does not have a dataset of ACCU cancellations for Climate Active certification, despite having disclosed figures in some of its quarterly carbon market reports in recent years. It mentioned late last year that the program accounted for around 0.5mn of a total 0.8mn cancelled for voluntary purposes in the first three quarters of 2023, and later reported total voluntary cancellations of 290,146 units in the fourth quarter alone. Voluntary cancellations reached nearly 1.1mn units in 2023, a new record high.

Certification under the Climate Active standards is awarded to businesses that measure, reduce and offset their carbon emissions to achieve carbon neutrality. More than 700 certifications have been provided to entities including large and small businesses, local governments, and non-profit organisations.

But significant changes in climate science, business practices and international benchmarks since the program was established in 2010 prompted the federal Labor government to seek modifications aimed at driving a more ambitious voluntary climate action in Australia, following its separate reform of the compliance market's safeguard mechanism.

The DCCEEW late last year launched a consultation with proposals to reform Climate Active, which would require more climate ambition from businesses seeking to be certified under the program. The use of carbon credits to offset emissions that have not been reduced by businesses would be tightened, with a requirement that all eligible international offset units meet a five-year rolling vintage rule, replacing the existing post-2012 vintage requirement. Other proposals include mandating a minimum level of gross emissions reductions and a minimum percentage of renewable electricity use.

"The government is working through feedback on these proposals and will announce the consultation outcome later this year," a DCCEEW spokesperson told Argus.

No expected changes in eligible offsets

ACCUs have been representing a small share of the total offsets used for Climate Active certification at between 5.7-10.8pc in recent years, despite the estimated record high last year, according to DCCEEW estimates (see table). Organisations can currently use certified emissions reductions (CERs) and removal units (RMUs) under the program, as well as verified carbon units (VCUs) from the Verra registry and verified emissions reductions (VERs) from Gold Standard. The DCCEEW did not provide a breakdown of cancelled volumes per credit type.

No minimum use of ACCUs and no changes to the list of eligible international units are expected in the near term, following advice from a review from Australia's Climate Change Authority (CCA) in 2022. But some market participants have been asking for the removal of CERs, which account for the "vast majority" of carbon offsets surrendered by Australian organisations, according to utility AGL.

CERs are "outdated", utility Origin Energy said in its submission to the Climate Active consultation. "We consider it would be consistent with international carbon reduction mechanisms to introduce a clear end date to phase out the use of CERs from the program and ensure greater alignment with the more relevant Paris Agreement," Origin said. "This reform is considered an immediate priority, and of more urgent need than some of the other proposals in this consultation."

Uncertainties over future demand

More investor and activist pressure in recent years over the use of carbon offsets with perceived low levels of integrity have also been forcing companies to review not only their offset standards, but also claims of ‘carbon neutrality' and similar terms. One of the DCCEEW's proposals is to discontinue the use of ‘carbon neutral' to describe the certified claim and to choose a different description.

"A lot of the voluntary demand for carbon offsets in Australia has traditionally come from Climate Active, but the landscape is indeed moving quickly and the concept of carbon neutrality is being replaced by net zero," said Guy Dickinson, chief executive of Australia-based carbon offset services provider BetaCarbon and head of carbon trading at sister company Clima. This should drive more price stratification between carbon removals and carbon avoidance credits, he noted.

Telecommunications firm Telstra, one of the biggest companies in Australia, recently announced it will stop using carbon offsets to focus instead on reducing its direct emissions. It will no longer seek Climate Active certification as a result and will remove references that its plans are ‘carbon neutral' or ‘carbon offset'. This could prompt other businesses to follow suit, market participants said.

Another source of uncertainty over future voluntary demand comes from a DCCEEWW proposal that abatement from all ACCUs used under Climate Active would count towards meeting Australia's Nationally Determined Contribution (NDC) under the Paris Agreement. The use of ACCUs under the program have so far been treated as ‘additional' to Australia's emissions reduction target through accounting under the Kyoto Protocol. If the government goes ahead with such a proposal, this could disincentivise participation in Climate Active as organisations might consider this as "paying to help the government meet its targets through the voluntary action of businesses," utility EnergyAustralia warned in its submission.

There has been increased interest in emerging and alternate standards to those acceptable under Climate Active, such as the American Carbon Registry, Climate Action Reserve and Puro.Earth offsets, according to environmental marketplace Xpansiv's vice president of carbon and Australian energy, Peter Favretto. But Climate Active has reported positive growth in certified brands since its inception and will likely continue to create demand for offsets in the international voluntary market and the Australian ACCU market, he said.

"With the upcoming mandatory climate reporting legislation in Australia, and a similar atmosphere in other global jurisdictions such as the US and the UK, there is a growing demand that could lead to further growth in Climate Active certifications," Favretto added.

ACCUs used for Climate Active certificationunits
YearVolumeTotal voluntary ACCU useClimate Active %
2019243,105329,14573.9
2020417,405605,49968.9
2021625,705844,44574.1
2022592,837855,08169.3
2023650,000-700,000*1,090,57560-64*
*Argus estimates
Total offsets under Climate Activeunit
YearACCUsTotal offsetsACCUs %
2019243,1054,230,0115.7
2020417,4056,857,6286.1
2021625,7055,796,46610.8
2022592,8377,472,7117.9

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18/02/25

UN Green Climate Fund approves $483.1mn for projects

UN Green Climate Fund approves $483.1mn for projects

London, 18 February (Argus) — The UN Green Climate Fund (GCF) has approved eight projects, allocating $483.1mn in climate funding across 31 developing countries. The GCF will consider four more projects — which would allocate around $253.7mn — during its board meeting, which runs from 17-20 February. Of the approved projects, five are focused on adaptation — adjusting to the effects of climate change where possible — and three on adaptation and mitigation, which refers to cutting emissions. The GCF operates under the financial mechanism of UN climate body the UNFCCC and is mandated to invest half of its resources in mitigation and half in adaptation. It is the world's largest climate fund and was originally capitalised with $10.3bn in 2015. The fund's first replenishment, in 2019, gathered a further $10bn in pledges and its second replenishment reached around $13.6bn after funds committed at the UN Cop summits in 2023 and 2024 . But the US rescinded "outstanding pledges" to the fund earlier this month, the country's State Department said. These are thought to amount to around $4bn. Recent UN climate talks have centred around finance for developing countries, to address climate change and decarbonise. Countries agreed at last year's Cop 29 to a new financing goal of "at least" $300bn/yr for developing nations by 2035. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Frustration over delays to UK CCS and H2 programmes


17/02/25
17/02/25

Frustration over delays to UK CCS and H2 programmes

London, 17 February (Argus) — Companies are growing increasingly frustrated with the UK government over unclear timelines and inadequate funding for carbon capture and storage (CCS) and clean hydrogen projects. The government has drawn strong praise for the design of its contracts-for-difference style production subsidies for electrolytic hydrogen and CCS systems to underpin low-carbon hydrogen from fossil fuels. But too few projects have been able to access the schemes and developers are losing confidence that the UK will match their ambition with sufficient and timely funding. "It's like building a great motorway with five lanes but very few, or no junctions," industry body OEUK's head of energy policy Enrique Cornejo said. "We have a great policy framework, but we don't have access, apart from a very small number of projects," he told the UK CCUS and Hydrogen Decarbonisation Summit in Leeds, northern England this month. Cornejo welcomed a recent final investment decision (FID) for the Teesside CCS system and progress made on northwest England's HyNet cluster, which is expected to reach FID this year, but he urged the government to set out funding and timelines for the Scottish "Acorn" and Humberside "Viking" CCS projects that are supposed to be next in line. "It's been a really long wait for these projects and the risk is very clear that if we don't hear some positive news from the government" there could be "lost investment", he said. It is a view shared by Norway's Equinor, which owns 45pc of the Teesside CCS project and a portfolio of Humberside hydrogen proposals that are in limbo having been overlooked in initial government selections. "Keeping projects on life support costs a lot of money," said the company's director of UK low-carbon solutions hydrogen, Dan Sadler. Equinor has spent "hundreds of millions" on its proposals for CCS-based hydrogen production, electrolytic hydrogen production, transport and storage infrastructure, he said. Sadler made the same appeal 12 months ago but has still received no update on the timing for the so-called "track 1 expansion process" which would allow its CCS-hydrogen project to move ahead. Optimism over the "fantastic" Teesside FID and contracts signed with three electrolytic projects must be balanced against concerns that HyNet has not reached FID nor have any of the UK's CCS-based hydrogen plants , Sadler said. On electrolytic hydrogen, the UK missed its deadline to shortlist winners of second round projects in 2024. Multiple electrolysis-focused developers at the Leeds conference talked of "standstill" in the sector, while financiers echoed the importance of the UK's second hydrogen allocation round (HAR2) shortlist. "We're waiting with bated breath for HAR2 so we know which projects we can look to finance," UK-based National Wealth Fund's managing director of banking and investments, Emily Sidhu, said. Opening applications for the UK's subsidy scheme for hydrogen pipeline and storage infrastructure has slipped to the fourth quarter of this year, which means it could be many months into 2026 before winners are selected and years until the projects get built. UK pipeline operators envy the government support that peers in continental Europe have received and have been trying to alert London about what companies perceive to be unduly arduous permitting processes, one pipeline firm told Argus . Emperor's new clothes The funding appeals come at a difficult time. The Labour government, which was elected last year, is reviewing spending across all departments, creating extra doubt. The total cost of the UK's ambitions for hydrogen and CCS would surpass several times over the £21.7bn ($27.3bn) for CCS and £2bn for electrolytic hydrogen that the government has confirmed for the first rounds. While raising funds from the government, the Emissions Trading System (ETS) or the so-called gas shipper obligation are possibilities, it is not sufficiently clear to give confidence to investors, Equinor's Sadler said. Moreover, the Labour administration has not said if it will stick to the former Conservative government's targets, Sadler noted. "It's rhetoric. Government policy for hydrogen and CCS? There isn't any. People quote 10GW [hydrogen production] and four [CCS] clusters by 2030 and 30mn t/yr [CO2 sequestration] by 2030. That's the Tory [Conservative] policy, the Labour government hasn't got a policy at the moment," Sadler said. The industry's belief in the UK as an investment proposition cannot be sustained forever, he said. The UK's Department for Energy Security and Net Zero has not responded to questions about the Labour government's hydrogen targets. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Canada sets out climate plan to hit 2035 emissions goal


12/02/25
12/02/25

Canada sets out climate plan to hit 2035 emissions goal

London, 12 February (Argus) — The Canadian government has released a new climate plan for the country, detailing actions it plans to take to reach its 2035 emissions reduction targets, with several references to the outcome of the UN Cop 28 climate summit in 2023. The Canadian government announced the country's 2035 target in December . It aims to reduce greenhouse gas (GHG) emissions by 45-50pc by 2035, from 2005 levels. This builds on its target to cut emissions by 40-45pc by 2030, from the same baseline, although the country is currently "on track" to reduce emissions by 34pc by 2030, from 2005 levels, the government said. Many of the plans outlined today are in line with the first global stocktake — the key outcome from Cop 28 in December 2023 . These include phasing out unabated coal-fired power, increasing renewable energy capacity, improving energy efficiency and cutting methane — a powerful GHG. The government plans to reduce methane emissions from Canada's oil and gas sector by 75pc by 2030, from 2012 levels. It will also "explore the transfer and use of ITMOs", which are internationally transferred mitigation outcomes, or emission credits. And the country will "explore the potential" for carbon removal technologies, although the plan warned on "potential risks that must be carefully managed". The document included detailed plans from several of Canada's provinces and territories, as well as the Assembly of First Nations. But the province of Saskatchewan — for which agriculture, oil and gas production and mining are key — pushed back on federal climate policies. Canada's government based its plans on the "best available science" and included recommendations from the independent Net-Zero Advisory Body. Insured losses from severe weather in Canada hit a record high of C$8.5bn ($6bn) in 2024, the government noted. And estimates suggest that "economic losses will rise to roughly 6pc of Canada's GDP by the end of the century", it added. Canada will need investments of between C$125bn and C$140bn annually to reach its legally binding goal of net zero emissions by 2050, according to the plan. The transition "will require substantial public and private sector investment and expertise", the government said. The plan released today is known as a nationally determined contribution (NDC). Countries and jurisdictions party to the Paris climate agreement are required to submit new plans every five years, ideally increasing in ambition. Canada committed at Cop 29 in November to an NDC aligned with Paris agreement temperature goals . The Paris accord seeks to limit the rise in global temperature to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil plans Amazon forest concession sale


11/02/25
11/02/25

Brazil plans Amazon forest concession sale

Sao Paulo, 11 February (Argus) — Brazil's environment ministry will auction concessions in the Jaturana national forest, in northern Amazonas state, as part of government efforts to prevent deforestation. The government will sell four forest management concession areas with a combined 453,000 hectares (ha) in the Apui municipality. The concessions will require roughly R430mn ($7.4mn) in infrastructure investments and R3.4bn in operating investments over the 37-year concession period. The auction is scheduled for 21 May and will be held at the B3 exchange, in Sao Paulo state, to guarantee transparency and boost competition, the ministry said. The government plans to hold a roadshow to promote the concessions. The government estimates that the auction will generate concession payments of R32.6mn/yr, which will be split between federal environmental protection agencies, Amazonas state and the Apui city government. The winning bidders will be allowed to harvest up to six trees/ha for lumber from the concession area, according to the auction's terms elaborated by the Bndes development bank. Other select activities, including the production of açai fruit, Brazil nuts and tropical tree oils, such as copaiba and andiroba, will also be permitted. The concession terms stipulate that the winning bidder will not have control over the mineral or water rights of the region and will be required to invest in research and environmental education. With the sale of the Jaturana concessions, Brazil will increase the total amount of forest managed by the private sector — now at 1.31mn ha — by 35pc. Brazil has 23 concession contracts for nine national forests in five Brazilian states. The goal is to award a total of 5mn in forest concessions over the next three years. The Brazilian forestry service (SFB) is developing concessions for 11 other national forests, the head of the SFB Garo Batmanian said on Monday. Limiting deforestation is one of President Luiz Inacio da Silva's goals for his administration and a flagship of the country's ambitions for the UN Cop 30 summit, which will be held in Belem, the capital of northern Para state, in November. Brazil has been targeting reforestation as part of its efforts to meet its emissions-reduction target. But wildfires in the country are still a major concern, as they rose by 79pc in 2024 from a year prior , according to environmental network MapBiomas' fire monitor researching program. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Singapore sets new emissions reduction target for 2035


11/02/25
11/02/25

Singapore sets new emissions reduction target for 2035

Singapore, 11 February (Argus) — Singapore submitted its new emissions reduction target on 10 February, aiming to reduce emissions to 45mn-50mn t of CO2 equivalent (CO2e) in 2035 as part of its nationally determined contribution (NDC). This is a progression from its first NDC which targeted a reduction in emissions to around 60mn t of CO2e in 2030. Singapore's emissions totalled 58.6mn t of CO2e in 2022, according to the country's National Climate Change Secretariat. The nation aims for net zero emissions by 2050. Countries party to the Paris agreement were supposed to submit their new climate plans — NDCs — for 2035 to the UN climate body the UNFCCC by 10 February, as part of the ratchet mechanism which requires them to review and revise plans every five years. But only a few countries have submitted their plans as of 11 February. Singapore's second NDC is an economy-wide absolute greenhouse gas (GHG) emissions reduction target, and the key sectors covered are energy, industrial processes and product use, agriculture, land use, land-use change and forestry and waste. The NDC was formulated based on the outcomes of the first global stocktake (GST) that took place at the UN Cop 28 climate summit in 2023. "Singapore is contributing to the first GST's call to triple global renewable energy capacity and double the global average annual rate of energy efficiency improvements by 2030," according to the NDC. The country is also supporting efforts to transition away from fossil fuels in energy systems and phase out inefficient fossil fuel subsidies. Singapore has increased the share of natural gas in its energy mix to 95pc, compared to around 18pc in 2000. The country's Energy Market Authority's latest emissions standards also require new fossil fuel generation units to be at least 30pc hydrogen-ready by volume, with the ability to be retrofitted to be 100pc hydrogen-ready in future. Singapore has raised its target for clean electricity imports from around 4GW to around 6GW by 2035. This is expected to meet one-third of the country's energy needs. The country is also looking into cross-border green electricity trading with its neighbours. Singapore is actively exploring the possibility of a cross-border carbon capture and storage project, as it is land-scarce and dependent on bilateral co-operation to sequester CO2. Singapore has additionally attempted to mobilise finance to support Asia's decarbonisation efforts through programmes such as the Financing Asia's Transition Partnership , a blended finance initiative under which the country has pledged up to $500mn in concessional capital to match concessional capital from other partners in the scheme dollar-for-dollar. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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