(Bloomberg) – Commodity trading giant Trafigura Group believes a new regulatory framework will push carbon credits into the mainstream of emissions accounting, driving record growth in the beleaguered carbon credits market. We are aiming for
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Hannah Haumann, global head of carbon trading at Trafigura, said “increasing and tightening regulations” aimed at curbing emissions were reshaping carbon credit markets across jurisdictions. The development means that products that were once treated as a type of “corporate experiment” now join the ranks of “investment-grade assets and operations,” he said in a recent interview in Azerbaijan. said.
Carbon credits, which companies use to offset their emissions, have emerged as one of the most controversial areas in climate finance. Last year, repeated greenwashing allegations and the exit of bankers and companies coincided with a 23% drop in the value of the so-called voluntary carbon market in which such credits are traded.
HSBC Holdings has now shelved plans to build a carbon credit trading and treasury desk. Shell is taking steps to sell a majority stake in its portfolio of natural carbon credit projects. Delta Air Lines, Alphabet Inc.'s Google and EasyJet are among the companies that have exited the market.
At the same time, regulators in Europe, the United States, and Asia have warned that without access to functional and effective markets for carbon credits, especially carbon credits, many companies will not be able to report net-zero emissions by mid-century. I am firmly convinced that this is the case. -Base unit. All three regions are developing frameworks to enable this.
And at the COP29 summit in Azerbaijan's capital Baku, negotiators reached an agreement to advance new UN-led market rules. There is a UN-backed global credit mechanism based on what is known as Article 6.4. There is also guidance, known as Article 6.2, on how countries should consider the units they exchange to meet their national climate goals.
In particular, the decision on Article 6.4 was a “huge” development, Mr Howman said. “This is essentially giving countries around the world a rubber-stamped rulebook on how to participate in the market,” she said.
Meanwhile, carbon market experts and climate change activists are urging caution. According to Danny Cullenward, a senior fellow at the Kleinman Center for Energy Policy, Article 6.2 defines how countries can exchange so-called internationally transferred mitigation gains to help meet climate goals. It is said that the market is likely to become one where “anything goes”. University of Pennsylvania.
