UK sees global climate deal 'within reach'

: Emissions
14/09/09

The prospects for a global climate change deal are the best they have been since international negotiations began decades ago, UK energy and climate change secretary Ed Davey said.

Over the past few years, momentum has shifted decisively, placing "success in Paris within our grasp", the minister said. Davey made the comments today in a speech to unveil the UK government's vision for an agreement at the 21st session of the Conference of Parties (Cop21) in Paris next year.

"For the first time, we have the ingredients in place that give us a real chance of a truly global deal," Davey said. "We are seeing increasingly bottom-up climate change action, with national legislation proliferating, carbon-pricing mechanisms spreading and new policies and regulation being introduced," Davey said, citing almost 500 climate laws in 66 countries, along with carbon markets in over 40 countries.

Davey partly based his optimism on the national climate action undertaken by the world's four biggest emitters, which are responsible collectively for half of the world's greenhouse gas (GHG) emissions. "India, China, the US and the EU are all demonstrating in national policies the kind of action we need to formalise in Paris," he said.

The most advanced countries have to make the most ambitious commitments, reflecting their responsibility for emissions and their capacity to absorb changes, Davey said. But the "unity of purpose" needed for a global deal is increasingly evident in many countries, including the "big four", he said.

"When the EU meets to agree the new energy and climate package next month, we will see an ambitious deal with a GHG target of at least 40pc," Davey said

The US Climate Action Plan announced by president Barack Obama last year will introduce robust emission regulations for power plants, Davey said. "I have no doubt about the commitment of the US to achieve agreement in Paris," he added.

The election of Narendar Modi as India's new prime minister has brought a marked shift in that country's climate change strategy. "He has the will and commitment to duplicate an effective low-carbon policy that he implemented in Gujarat across the whole of India and bring a constructive India to the negotiating table," he said.

In China, president Xi Jinping's vision of "an ecological civilisation that softens its tread upon the earth" is embedded in climate action measures that form part of the national planning process and create tough sanctions for officials and companies that flout environmental legislation.

In light of this, Davey dismissed as less important these two leaders non-attendance ta UN secretary-general Ban Ki-moon's climate summit in New York on 23 September. Davey said he would be there and an announcement on whether UK prime minister David Cameron would attend is imminent.

Developed countries must meet their commitment to mobilise $100bn/yr by 2020 to provide support for adaptation, mitigation and the preservation of forests, Davey stressed, because for emerging economies such as India, development and poverty reduction go hand-in-hand with climate change action.

"By [Cop20 in] Lima in December, we need to secure a critical mass of countries pledging to the Green Climate Fund to support those who need it through the low-carbon transition," Davey said.

He cited the UK's International Climate Fund of £3.87bn ($6.3bn) as part of this effort to support developing countries and emerging economies. The UK will not announce new funding for climate change mitigation and adaptation in the developed world at the Ban Ki-moon summit, but hopes be able to do so by the end of the year, Davey said.

Davey described climate change as "the big daddy of all risks" and warned that "intense climate diplomacy" would be needed "to bring this deal home".

"Only those with the hardest hearts and the meanest minds will be prepared to gamble their children's future, given what we already know," Davey said.

em/egs

Send comments to feedback@argusmedia.com

If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/12/22

Viewpoint: CSAPR sentiment bearish despite coal use

Houston, 22 December (Argus) — Expectations for lower prices is likely to persist in the federal Cross-State Air Pollution Rule (CSAPR) allowance markets next year as they remain oversupplied, even with higher levels of coal-fired generation. The seasonal NOx markets have been more active this year compared to 2024, when prices essentially flatlined due to regulatory and legal uncertainty brought about by a barrage of lawsuits filed against the US Environmental Protection Agency (EPA) for its "good neighbor" plan. That plan, which the agency finalized in 2023 under former president Joe Biden, sought to help downwind states meet the 2015 national air quality standards for ozone. The plan imposes more stringent ozone season NOx caps for power plants in more than 20 upwind states, as well as setting new limits on some industrial facilities. But the plan is now essentially defunct after the US Supreme Court halted its implementation in June 2024. This led the EPA to return to less-rigorous NOx emissions limits tied to older ozone standards and reshuffle the participating states into the Group 2 and "expanded" Group 2 markets. Argus launched its assessment of the latter in February 2025. EPA said in March it intends to reconsider the good neighbor plan in order to give states more freedom in developing their own ozone reduction plans. The announcement led to the US District of Columbia Circuit Court of Appeals pausing a lawsuit challenging the legality of the good neighbor plan until the agency completes its reconsideration, and which could culminate in new regulations by fall 2026. But those developments did little to move the seasonal NOx markets, which have already been sluggish due to oversupply and weak compliance demand, leading to more dramatic price fluctuations when trades do occur. Argus has assessed Group 2 allowances at $875/short ton (st) since 1 December and expanded Group 2 allowances at $850/st since 24 October. It is unclear how US president Donald Trump's current hostility towards environmental regulations will affect the administration's attitude towards the existing CSAPR allowance trading markets, but it seems likely that they are here to stay. The EPA likely is "digging into the air transport modeling that they have to understand what their options are," and which could potentially echo its determination during Trump's first term that states had adequately addressed downwind pollution, said Carrie Jenks, executive director of Harvard Law School's Environmental and Energy Law Program. "The EPA is committed to advancing cooperative federalism and working with states on state implementation plans (SIPs) to provide clean air for all Americans," the agency said in December. But extensive case law suggests that the EPA has little room to give states more power to manage emissions as they see fit. Both the DC Circuit Court and the US Supreme Court have made it clear that the EPA must intervene if a state does not sufficiently lower its emissions, Jenks said. "So the EPA's hands, regardless of who's in the White House, are really tied," she said. As a result, the EPA will likely try to prolong the issue by giving states more time to draw up their own ozone-reduction plans. The debates over those plans could revolve around how the modeling of emissions is conducted and interpreted. Even if that modeling is challenged in the courts, it can take years for litigation to get resolved. More coal, more emissions Despite the continued dearth of activity in the seasonal NOx markets, increases in coal-fired generation, a significant source of NOx and SO2 emissions, have buoyed the outlook in those markets, heightening expectations for higher emissions. During the past year, stronger power demand and higher natural gas prices have allowed coal to take a larger market share, which has resulted in increased coal-fired power in grids that serve states covered by CSAPR. But NOx emissions during this year's ozone season, which ran from May through September, were lower than expected, according to market participants. Cumulative emissions in the Group 2 and expanded Group 2 markets rose by just 1pc and 4.2pc, respectively, and remained well below their overall limits. It was likely more cost-effective for power plants to run their NOx controls than to purchase or surrender additional allowances for compliance. Still, given the Trump administration's pro-coal agenda, it remains to be seen for how long increases in coal generation will continue and to what extent that will affect the CSAPR markets. Conversations over ballooning data center demand have also bled into the seasonal NOx markets as the Trump administration seeks to leverage coal to power that boom. There are currently a lot of moving parts that make it difficult to make predictions, including how competitive coal is compared to other energy sources such as renewables, where data centers get built, their demand flexibility, and the federal and state regulatory landscapes in the coming years, Jenks said. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia releases key IFLM carbon method draft

25/12/22

Australia releases key IFLM carbon method draft

Sydney, 22 December (Argus) — The Australian government today released the exposure draft for the long-awaited Integrated Farm and Land Management (IFLM) carbon credit method ahead of a public consultation starting in late January. The draft method includes the regeneration of native forest on suppressed land as a proposed eligible activity, meeting a key demand from carbon project developers, but it excludes a previously planned soil carbon module . The method's "framework" design will enable the addition of future activities, including improvements to soil, as well as updates to measurement approaches and carbon pools over time, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said on 22 December. The DCCEEW will allow two abatement-calculation approaches to estimate carbon stock change under the method, using Australia's Full Carbon Accounting Model (FullCam) — a model-only approach and a hybrid approach where modelled estimates are refined by measurements in the project. The hybrid approach will need to be legislatively drafted to be included in the final draft methodology determination. "The modular design enables more activities, technologies and carbon pools to be added over time, giving greater flexibility to land managers," the DCCEEW said. Three main activities The planned Australian Carbon Credit Unit (ACCU) method could be the first in the country to combine multiple activities that store carbon in the land on a single property. This aims to streamline participation and reduce the administrative burden compared with running multiple projects on the same land, the DCCEEW said. The module for regeneration of native forest on suppressed lands builds on the key human-induced regeneration (HIR) ACCU method, which expired in September 2023. But like the FullCam hybrid approach, it will require legislative drafting in 2026, as both components "are more complex than approaches already incorporated into the exposure draft". The method would also enable crediting of carbon from two modules which are already legislatively drafted — reforestation by environmental plantings, an activity with an existing method that was updated late last year , and regeneration of native forest on cleared lands, which is based on the expired native forest from managed regrowth (NFMR) method. Soil carbon is not in the draft because the Emissions Reduction Assurance Committee (Erac) — the statutory body responsible for ensuring the integrity of Australia's carbon crediting framework — is reviewing the Soil Organic Carbon 2021 method. This is because of the complexity of the review process , Erac chair Karen Hussey said last month. The outcomes of that review will inform the inclusion of a revised soil carbon module in the IFLM method in the future, the DCCEEW said. Contentious areas Uncertainties remained until recent weeks on whether a draft method would be submitted to Erac before the end of 2025. A summary paper of a stakeholder group meeting in September noted that some members had recommended postponing the IFLM method, as "a robust approach which clearly demonstrated integrity was more important than timelines". The inclusion of regeneration of native forest on suppressed land has proved to be a contentious issue. "There has been considerable research into the impacts of grazing management on the diverse ecosystems in Australia, including the different approaches to quantify the changes in vegetation, and in existing HIR projects," the DCCEEW said today. "Uncertainties remain and this issue is still an active area of research." But the IFLM draft settings provide confidence that the method is robust and that credited abatement is additional, as it will establish new eligibility criteria, require on-ground measurements and apply conservative abatement estimates in early project years, the DCCEEW noted. Projects will need to use the FullCam hybrid approach to estimate abatement for this activity module. This will reduce the potential for over-crediting or under-crediting abatement, particularly for lower-rainfall environments where there can be less certainty in attributing the regeneration to project activities. Projects will also need to have a low initial carbon stock at the start of their 25-year crediting period, and will need to achieve forest cover during that period. They will also have a baseline period of 20 years compared with 10 years for HIR projects. This is the time over which the project land area must not have had forest cover because of suppression mechanisms such as grazing pressure, chemical or mechanical destruction of regrowth, or the presence of non-native plants. Finally, the department is proposing to apply discounts when attributing carbon stock change to projects under that module, including a temporary 5-25pc attribution discount to address climate-related uncertainties. Existing HIR, NFMR or environmental plantings projects will be able to transfer their projects to become IFLM projects if they meet eligibility requirements in the final IFLM method. They will also be able to add additional land to the project area to undertake additional abatement activities. Consultation to start on 27 Jan The release of the draft method and other documents allows an early review of the material before a formal, 28-day consultation period starts on 27 January, the DCCEEW said today. Feedback will help Erac decide whether the method complies with Australia's offsets integrity standards and it will recommend it to assistant minister for climate change and energy Josh Wilson. The DCCEEW intends to provide a final IFLM methodology determination for Erac's consideration "in 2026", it said, without disclosing a specific timeline. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: High integrity and compliance to drive VCM

25/12/22

Viewpoint: High integrity and compliance to drive VCM

London, 22 December (Argus) — Liquidity in the voluntary carbon market (VCM) will be increasingly driven by demand for compliance schemes and high-integrity credits over the next 12 months. Carbon project developers are increasingly shifting strategies to tap into the growing demand for offsets approved for the first phase of the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) or tagged with the Integrity Council for the Voluntary Carbon Market's high-integrity Core Carbon Principles (CCPs) label. The first phase of Corsia — between 2024 and 2026 — was hamstrung this year by a persistent supply bottleneck. Only one government-run forestry project in Guyana made up the entire supply of Emissions Eligible Units (EEUs) for most of 2025 — about 15.8mn credits. Developers faced difficulty obtaining letters of authorisation (LOAs) from host countries — documents indicating their intention to apply a corresponding adjustment (CA) to carbon credits to avoid double counting. And once projects receive LOAs, to issue EEUs they must either demonstrate their host country has applied the CA — through its Biennial Transparency Report (BTR) submitted to the UN — or secure private insurance policies in case the host country retracts the CA. But concerns eased in late 2025 after several projects crossed the line to eligibility, bringing the total number of tagged EEUs to about 17.5mn. Heading into 2026, Verra, the largest carbon registry in the world, is set to apply the tag to at least 5.1mn clean cookstoves credits after it approved insurance policies last week. And a significant chunk of supply is expected to come on line once countries submit their BTRs by the December 2026 deadline. On demand, uncertainty about participating countries and subjected airlines will be settled next year. The EU is expected to release a report reviewing the effectiveness of Corsia to achieve its climate target in July, based on which it might decide to expand its emissions trading system (ETS) to international aviation. This will partly hinge on whether the US — which so far has expressed public support for Corsia but has not taken any measures to implement it — will participate in the scheme. High-integrity credits tagged with the CCPs label have been assessed broadly steady by Argus over 2025, with only landfill gas (LFG) credit prices in the US, Brazil and Bangladesh slightly increasing since the beginning of the year. The widely expected support for pricing has not materialised because buyers are not prepared to pay a premium for LFG CCPs credits yet, according to market participants. And despite several Integrity Council for the Voluntary Carbon Market (ICVCM) decisions to expand the scheme with the approval of carbon removal, clean cookstoves, and improved forest management methodologies, most CCPs supply is still made up of LFG credits. Despite the relatively lacklustre premium for CCP LFG credits over their non-tagged counterparts, other areas of the market are expected to benefit much more significantly from the high-integrity label. Clean cookstoves developer Burn, for instance, will only issue CCPs-tagged credits or Corsia Phase 1-approved EEUs, it said, because these command a significant premium. Over-the-counter CP1 credits were assessed last week at $20.90/t CO2e and Burn said it has struck forward offtake deals for its CCPs supply at around $15-20/t CO2e. For developers, these markets are expected to unlock significantly more revenue than standard clean cookstoves credits in Africa, which are currently assessed at $3.15/t CO2e for vintages 2019 onwards. Lastly, the highly liquid Katingan reducing emissions from deforestation and forest degradation (REDD+) project in Indonesia is expected to resume issuing credits in the next quarter, following a supply crunch that supported the Argus- assessed price to more than double from the beginning of 2025. A ban on fresh issuances from the government of Indonesia was lifted in October, but prices have continued to rise since. The most liquid vintage, 2020, was heard trading at levels above $11/t CO2e last week, nearly triple the $4.60/t CO2e price assessed in January. And in the wider VCM, demand is expected to pick up next year after the Science Based Targets initiative publishes its second Corporate Net-Zero Standard, which could increase corporates' appetite for nature-based avoidance and removal credits. Emerging buyers' coalitions will continue to drive demand for tech-removal credits, with the anticipated launch of the Tech Gen group in the second quarter of 2026. By Alexandra Luca Projects generating Corsia Phase 1-approved credits t CO2e Project ID Credits issued Registry Developer Country 11677 1,508,719 Gold Standard Hestian Innovation Malawi 11732 184,500 Gold Standard Burn Tanzania 102 15,800,000 ART Guyana Forestry Commission Guyana Available CCP credits (% of total issued) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia needs electricity carbon policy: Commission

25/12/19

Australia needs electricity carbon policy: Commission

Sydney, 19 December (Argus) — The Australian government should introduce a national market-based policy to drive electricity sector decarbonisation, potentially modelled on the existing safeguard mechanism, economic research and advisory body the Productivity Commission (PC) said in a final report today. The PC had previously recommended applying the safeguard mechanism to electricity generators at the facility level, but it may be better to consider this issue separately, it noted in a final inquiry report into "investing in cheaper, cleaner energy and the net zero transformation". "Multiple policy options will need to be considered for the electricity sector, and even if a baseline-and-credit scheme is preferred, it may be better to keep this separate from the safeguard mechanism, at least at first, to avoid risks of uncertainty and disruption in the carbon credit markets that support that policy," the PC said. Currently there is little relationship between the emissions intensity of Australia's remaining coal-fired power plants and their announced retirement dates, according to the commission. Recognising the value of emissions reduction would pave the way for more emissions-intensive plants to retire earlier, it argued. Electricity excluded from safeguard mechanism Under the safeguard mechanism, facilities emitting more than 100,000t of CO2 equivalent (CO2e) in a compliance year across several sectors earn safeguard mechanism credits (SMCs) if they report scope 1 emissions below their baselines, and must surrender SMCs or Australian Carbon Credit Units (ACCUs) if their emissions are above the threshold. The electricity sector, Australia's largest emitter, is effectively excluded from the mechanism because the emissions reduction policy for the segment has been focused on renewable electricity targets. The mechanism applies a single sectoral baseline of 198mn t CO2e/yr across all electricity generators connected to Australia's main electricity grids, which is way above recent data — emissions from the electricity generation sector reached a combined 138.9mn t CO2e in the 2023-24 compliance year. A decision on whether to expand the mechanism to electricity may be considered in the upcoming safeguard mechanism review in 2026-27 . NEM review But any new policy will need to complement reforms arising from the National Electricity Market (NEM) review, which also received a final report this week . The decision will also need to be consistent with several policies and agreements already in place to support new investment or manage the exit of coal plants across Australia, the PC noted. While the existing Capacity Investment Scheme (CIS) and the proposed Electricity Services Entry Mechanism (ESEM) scheme mainly target renewable output or capacity, a least-cost emissions-reduction policy would help companies deciding when to retire coal and gas plants, according to the commission. This will be even more important if the Australian government prioritises firming auctions, which may support new gas-fired plants. Emissions policy uncertainty has been a major barrier to investment in gas-powered generation, the PC said. "Firming auctions will be more effective if project proponents know in advance how their emissions will be treated," it noted. Apart from a policy to drive electricity sector decarbonisation, the PC's final report urges the government to expand the safeguard mechanism , phase out fuel tax credits for on-road heavy vehicle operators, and reduce barriers to adopting low-emissions technology for heavy vehicles. And it also calls the government to phase out the fringe benefits tax exemption for electric vehicles (EVs), a recommendation that was criticised by industry body EV Council . By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US House passes bill to expedite permitting

25/12/18

US House passes bill to expedite permitting

Washington, 18 December (Argus) — The US House of Representatives on Thursday approved a bill designed to fast-track permitting for energy projects and reduce related litigation risks. But a last-minute change Republicans made to exclude some offshore wind and solar projects led some Democrats and a major clean energy group to withdraw support, complicating the bill's chances of passage in the Senate. The Republican-controlled House voted 221-196 to pass the SPEED Act, with 11 Democrats crossing the aisle to vote for what would be the most significant changes to federal permitting in years. The bill will now advance to the US Senate, where proponents will likely need to agree to make significant changes if they hope to pick up the votes of at least seven Democrats to avoid a filibuster. The bill "finally brings common sense by cutting red tape that dramatically increases the cost and, in some cases, just makes it economically unfeasible to do projects", House Republican majority leader Steve Scalise (R-Louisiana) said. The SPEED Act focuses on revising project reviews under the National Environmental Policy Act (NEPA), which is a source of delay and litigation risk for pipelines and renewable projects alike. The bill would require federal agencies to narrow those reviews and uphold those decisions even if federal courts find them to be inadequate. The bill would also provide permit "certainty" by limiting the government's ability to rescind prior approvals, averting a repeat of events like the cancellation of the Keystone XL pipeline. "We applaud the House for advancing the SPEED Act, a bipartisan, commonsense step toward fixing a federal permitting system that's long been broken," oil industry group the American Petroleum Institute said. Republican leaders were hoping 30-40 Democrats would join them to support the SPEED Act. The bill had broad bipartisan support when it was drafted because of provisions meant to prevent permitting delays that have plagued both oil and gas pipelines and renewable energy development. But Republican leaders, to satisfy far-right conservatives, made a change to the bill earlier this week that would prevent its expedited permitting procedures from benefiting any project that Trump's administration has blocked or revisited since 20 January. The Trump administration has targeted multiple offshore wind and solar projects this year and has ordered the developer of the nearly complete 704MW Revolution Wind project off the coast of Rhode Island to stop construction. That change fractured a bipartisan coalition that had spent months working on technology-neutral permitting language. The American Clean Power Association, the largest industry group for US renewable energy, on Wednesday withdrew its support of the bill , arguing the "poison pill amendment" that Republicans made eviscerated bipartisan language that gave expedited permitting treatment for all types of energy resources. A number of House Democrats who had backed the bill also withdrew their support. American Clean Power plans to work with both parties in the Senate to make changes. "This is not the final draft," representative Scott Peters (D-California) said during floor debate Thursday, vowing to work with his colleagues in the Senate to address House Democrats' concerns. By Chris Knight and Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more