As this year’s United Nations climate summit, COP28, continues to deliberate the most pressing climate change concerns, we’re sharing the top updates impacting the future of climate finance. Here are the top four highlights that stand out.
Oil and Gas Charter Aims 2050 Zero MethaneÂ
Saudi Arabia’s Aramco and the UAE’s ADNOC, along with 29 other national oil companies, signed a non-binding agreement to target zero methane emissions and end routine flaring by 2030.
Overall, 50 oil and gas companies, which represents 40% of global production, committed to decarbonize their operations by 2050.
While Aramco and ADNOC have announced carbon reduction objectives, these targets don’t include emissions from customer fuel use. Sultan Al Jaber, ADNOC’s CEO and CO28 President, emphasized the need for more action, despite many national oil companies setting net zero emissions 2050 targets.
This initiative, called the Oil and Gas Decarbonization Charter, saw companies like PetroChina, Brazil’s Petrobras, TotalEnergies of France, ExxonMobil of the US, and BP and Shell from Britain signing on. However, unlike COP28 decisions, these commitments are voluntary.
Prepared ahead of COP28, these pledges aim to expedite the energy industry’s decarbonization. Yet, a non-profit representative noted that voluntary commitments from the industry may not be enough to address climate change adequately. What is more crucial is having government policies in place to drive swift and equitable transition away from fossil fuels.Â
Canada Aims to Slash Methane Emissions by 75%
Canada has shared a new plan to cut methane pollution from its oil and gas industry by at least 75%. The potent gas contributed about 13% of Canada’s total emissions in 2021.Â
The country’s Environment Minister made this announcement on the sidelines of COP28.Â
Canada ranks among the top oil producers globally, with most methane emissions coming from oil and gas, agriculture, and waste.
Two years ago, the nation promised to create a plan to significantly lower methane emissions from oil and gas by 2030, aligning with the Global Methane Pledge.
The new draft involves stricter rules for Canada’s oil and gas sector, following global suggestions. It aims to stop routine venting and flaring, which emit methane, and introduce better leak detection methods.
The federal government estimates that these new regulations will reduce emissions by 217 million metric tonnes of CO2e from 2027 to 2040. The government also plans to invest $30 million in a Methane Centre of Excellence.Â
The proposed regulations also include third-party inspections and safety exemptions. However, Alberta and Saskatchewan, provinces rich in oil and gas, criticized the plan, calling it too costly and challenging. They argue that the federal government is intruding on provincial control.
The draft regulations will roll out in 2027, but opposition from the provinces may lead to further discussions and revisions.
Bhutan is The First National Registry Under CAD TrustÂ
The Kingdom of Bhutan has become the inaugural national registry to achieve full integration with the Climate Action Data Trust (CAD Trust) Metadata Layer, marking a significant milestone announced at COP28.Â
This development positions Bhutan as a leader in regional climate action and aligns with the Paris Agreement’s Article 6 objectives.
Launched in December 2022, CAD Trust is an initiative led by the World Bank, the International Emissions Trading Association (IETA), and the Government of Singapore. It operates as a decentralized blockchain-based platform, aiming to promote transparent carbon market accounting, in accordance with the Paris Agreement.
- READ MORE: Climate Action Data Trust Launched
Bhutan, known for its vast forests occupying over 72% of its land, holds a pivotal role as a ‘carbon bank’. The country contributes to global biodiversity and carbon sequestration.Â
As the world’s first carbon-negative country, Bhutan’s integration into CAD Trust underscores its commitment to climate mitigation and proactive measures.
This integration ensures Bhutan’s climate mitigation efforts adhere to Article 6 guidelines by leveraging innovative digital infrastructure, including blockchain technology. This is to safeguard the accuracy of carbon credit data and prevent duplication, a critical principle of Article 6.
The development marks the beginning of an expanding network for CAD Trust. The platform will connect with other national and independent carbon market standards over the coming weeks and months. Â
Tanzania’s Major Carbon Credit Deal
Tanzania has signed a significant carbon credit deal at COP28 covering 6 national parks across 1.8 million hectares. Parks included are Burigi-Chato, Katavi Plains, Ugalla River, Mkomazi, Gombe Stream, and Mahale Mountains.
The agreement involves Tanzania’s national park agency, Tanapa, and a local company, Carbon Tanzania. The country boasts 48 million hectares of reserved forests, which offers significant opportunities for carbon trading.
In a move coinciding with COP28, the deal aims to trade carbon credits while also preserving and managing the national parks, safeguarding their natural ecosystems and wildlife. This move positions the country as a key player in Africa’s carbon credit market.
Mohammed Enterprises Tanzania Limited, led by businessman Mohammed Dewji, will provide funding for the project. This deal follows an earlier preliminary agreement encompassing 8.1 million hectares in Tanzania, also directed towards carbon credit initiatives. That area represents about 8% of the East African nation’s total land mass.
However, these deals have faced criticism for their potential impact on local lands and communities, drawing concern about neocolonialism. While developers assert that their projects follow stringent regulations and offer community benefits, critics question the agreements’ true impact.
Despite the criticism, these agreements could see vast land areas dedicated for carbon credit projects across Africa once finalized.
As COP28 unfolds, pivotal strides in carbon credit market and climate finance are apparent, spanning from oil and gas industry pledges to national initiatives and global registry integration. These developments emphasize the imperative role of collaborative efforts and policy implementations in tackling climate change.