The emerging UN carbon market under Article 6.4 of the Paris Agreement, Pacm, saw slow progress last week on draft rules for carbon removals accounting, as experts tasked with working on new Pacm methodologies convened at the UN climate arm's headquarters in Bonn, Germany.
The panel made some decisions on the so-called reversal assessment tool, which aims to determine the number of Pacm credits to contribute to the market's reversal risk buffer account, acting as a form of insurance for removal projects.
The tool will help calculate individual risk factors, combined risks and the reduction in reversal risk factors, based on any remediation measures implemented by activity proponents. A buffer factor, expressed as a percentage of credited carbon, would then be calculated, depending on the choices made by project proponents. The higher the percentage, the more credits must be set aside for an activity.
The panel will also determine specific activity risks, with an initial focus on forest carbon storage, geological carbon storage and biochar.
These are not only the most prevalent removal activities in the carbon market, but also dominate those transitioning from Pacm's precursor, the Clean Development Mechanism (CDM). The panel and the Article 6.4 supervisory body were tasked by countries at the UN Cop 30 climate summit in Brazil in November with prioritising CDM transitions. The panel will consider other types of removal activities at a later stage.
More progress was made last week on the draft rules for renewable electricity generation, on which the panel released a draft methodology for supervisory body approval. It would become the second approved Pacm methodology, if adopted.
The first methodology for generating carbon credits, on flaring or use of landfill gas, is regarded as substantially stricter than its CDM predecessor. Pacm's downward adjustment factor ensures that baseline emissions decline more significantly over time than under the CDM.
South Korea-based carbon project developer Ecoeye said under the Pacm landfill gas methodology, flaring-only projects carried out in host countries outside least developed countries are likely to experience a 52–76pc reduction in credited emission reductions, compared with CDM-based estimates, over a five-year period, while for electricity generation and heat production it projects a 34–42pc reduction.
The potential third Pacm methodology to be adopted, on clean cooking, considers new submissions while carrying over some elements from an existing CDM methodology.
Another methodology under consideration, on nitrous oxide abatement from nitric acid production, might also see a draft proposal at the next expert panel meeting in March.
Six new Pacm methodologies in total are under consideration. The latest entry is on fertiliser production with renewables-based ammonia, for which a call for public input closed on 27 January. The panel is considering merging this methodology — the development of which was financed by the Germany-supported International Hydrogen Ramp-Up Programme — with another for ammonia production through electrolysis.
