The Eligibility List sets out the approved host countries, carbon crediting programmes, and methodologies that meet the established Eligibility Criteria in Singapore.

By Paul A. Davies, Jean-Philippe Brisson, Farhana Sharmeen, Don Stokes, Michael D. Green, Qingyi Pan, James Bee, and Kevin Mak

On 19 December 2023, the Ministry of Sustainability and the Environment (MSE) and the National Environment Agency (NEA) in Singapore published the Eligibility List under Singapore’s International Carbon Credit (ICC) Framework, which took effect from 1 January 2024 and was published on Singapore’s Carbon Markets Cooperation website.

The Eligibility List followed the signing of an inaugural Article 6 implementation agreement with Papua New Guinea on carbon credits cooperation.

Under Article 6 of the Paris Agreement, countries may enter into an implementation agreement to cooperate to achieve their nationally determined contributions (NDCs) by trading Paris Agreement compliant carbon credits. Parties to the implementation agreement must also effect certain corresponding adjustment mechanisms to ensure that any emission reductions or removals are struck from the host country’s NDC accounts to prevent double-counting.

Goods imported into the UK from countries with a lower or no carbon price will face a levy by 2027.

By Paul A. Davies, Michael D. Green, and James Bee

On 18 December 2023, the UK government announced a proposal for a new carbon border adjustment mechanism (UK CBAM). The announcement follows extensive consultation earlier this year on possible measures to mitigate carbon leakage risks and aims to support the UK’s decarbonisation efforts.

The UK has made a number of decarbonisation commitments including reaching net zero by 2050. These commitments to decarbonise can be undermined by “carbon leakage”, in which production of goods and associated emissions move from a jurisdiction with more ambitious climate policies (which add costs to carbon-intensive processes) to another jurisdiction with less ambitious policies, resulting in an overall negative impact on the carbon intensity of the processes/goods themselves. The UK CBAM (or other form of carbon tax) seeks to address this issue by aiming to put a fair price on the carbon emitted during the production of certain carbon-intensive goods entering the UK.

The draft New Measure aims to enhance the environmental integrity of China’s carbon market by introducing new requirements for project registration and credit issuance.

By Paul A. Davies, Jean-Philippe Brisson, Michael Dreibelbis, and Qingyi Pan

China is preparing to relaunch its carbon credits program, the Chinese Certified Emission Reduction (CCER) Scheme, after suspending the program for over six years. On July 7, 2023, the Ministry of Ecology and Environment (MEE) and the State Administration for Market Regulation (SAMR) of the People’s Republic of China jointly released the draft Measure for the Administration of Voluntary Emission Reduction Trading (the New Measure).

The public consultation for the draft New Measure ended on August 6, 2023, and on September 15, 2023, the MEE ministry conference reviewed and passed the New Measure in principle. The formal release is expected to happen in October 2023, upon which the New Measure would replace the previous set of rules and become the governing law of the CCER Scheme.

Together with the national emission trading scheme (the China ETS) launched two years ago, the CCER Scheme represents China’s continuous efforts towards adopting market-based mechanisms for achieving its climate pledges (peaking emissions before 2030 and reaching carbon neutrality before 2060).[i]

By Paul A. Davies, Michael D. Green, and James Bee

The CBAM would seek to mitigate carbon leakage through the imposition of a levy on carbon-intensive imports into the EU, while free allowances under EU ETS would be phased out.

On 13 December 2022, negotiators from the European Parliament and European Council reached a provisional and conditional agreement on the terms of the EU’s carbon border adjustment mechanism (CBAM).

The CBAM was initially proposed by the European Commission in July 2021 as part of its “Fit for 55” package of policies. The measure seeks to address and mitigate the risk of “carbon leakage” from the EU, which refers to the risk that the EU’s greenhouse gas reduction efforts will be offset by increasing emissions outside of its border through the relocation of production to non-EU countries with less ambitious emissions reduction policies.

The CBAM would impose a levy on in-scope goods that are imported into the EU. Importers of such goods would be required to pay an amount equal to the cost of the emissions allowances under the EU Emissions Trading System (ETS) that would have been necessary to pay to produce that good in the EU.

Three funding opportunity announcements and a finance program provide significant investments to support carbon capture and sequestration.

By Jennifer Roy, Janice Schneider, Joshua Bledsoe, and Brett Frazer

Demand for carbon capture and sequestration (CCS) to meet global and national climate goals is on the rise. The International Energy Agency (IEA) 2020 World Energy Outlook suggests that CCS could contribute approximately 15% of cumulative emissions reductions worldwide by 2070.[1] The Intergovernmental Panel on Climate Change (IPCC) AR6 Working Group III Report further identifies the need for carbon dioxide (CO2) removal technology and to build a carbon management industry to achieve global net zero goals.[2] In view of the growing interest in CCS, and as discussed in this Latham blog post, the Biden Administration has announced ambitious decarbonization goals that prominently feature efforts to deploy CCS in the US.[3]

In September and October 2022, the US Department of Energy (DOE) released three funding opportunity announcements (FOAs) and one new finance program that, cumulatively, will provide an additional $7 billion for CCS infrastructure. Two of the FOAs feature grant funding for front-end engineering design (FEED) studies, and the final FOA and finance program feature a combination of grants and loans. Funding for these programs was appropriated in the Infrastructure Investment and Jobs Act (IIJA), which President Biden signed into law in November 2021. The IIJA delivers approximately $75.8 billion for energy and minerals-related research, demonstration, technology deployment, and incentives, including $12.2 billion administered by DOE and dedicated to CCS technology and infrastructure.

This blog post summarizes the three FOAs and the new finance program.

The system aims to stimulate innovation in GHG-reduction activities as part of the country’s 2030 Emissions Reduction Plan.

By JP Brisson, Michael Dreibelbis, and Alicia Robinson

On June 8, 2022, Canada launched the Greenhouse Gas (GHG) Offset Credit System (the System) to create a “market-based incentive to undertake innovative projects that reduce greenhouse gases.”[1] The System, which will be administered by Environment and Climate Change Canada (ECCC) and will apply across the country, represents a key element of Canada’s 2030 Emissions Reduction Plan to reduce GHG emissions to 40–45% below 2005 levels by 2030.

The Claims Code seeks to ensure the integrity of voluntary carbon markets to support achievement of the Paris Agreement goals.

By Jean-Philippe Brisson, Paul A. DaviesSarah E. ForttBetty M. Huber, Alicia Robinson, and Deric Behar

The Voluntary Carbon Markets Integrity (VCMI) Initiative is “a multi-stakeholder platform to drive credible, net-zero aligned participation in voluntary carbon markets.” The VCMI Initiative, for which the UK government announced its support in March 2021, is co-funded by the Children’s Investment Fund Foundation and the UK Department for Business, Energy, and Industrial Strategy. A central objective of VCMI is to issue guidance for companies and other non-state actors on how carbon credits can be voluntarily used and claimed as part of credible net zero decarbonization strategies. To further this objective, VCMI published for public consultation a Provisional Claims Code of Practice (Claims Code) on June 7, 2022.