Global voluntary carbon credit markets would have to grow 15 fold by the year 2030. The aim is to enable companies and organizations to meet goals set under the Paris climate agreement. This is according to a private sector task force on Tuesday.
Many global companies have pledged to reach net-zero emissions. specifically, these include oil majors Shell RDSa .L and BP BP.L, and e-commerce giant Amazon AMZN.O. But they’ll need to buy or generate carbon credits to offset the emissions they’re unable to cut from their operations.
To facilitate global decarbonization, a transparent, verifiable, and strong voluntary carbon market is necessary. This was a statement from a consultation document by the Taskforce on Scaling Voluntary Carbon Markets on Tuesday.
The Taskforce consists of up to around 50 members from different companies. These include Shell and BP, Tata Steel, and airline Etihad. It is sponsored by the global finance association which is the Institute of International Finance.
The document said, to enable this to happen, the voluntary carbon market will need to grow more than 15 fold. That will be up to around 2 billion tonnes of carbon credits a year by 2030.
The Taskforce identified several areas of work. Those were establishing principles to ensure market integrity, setting clear standards, and building infrastructures. Such infrastructures were financing and trading capabilities.
It said that we should take action to help distinguish between projects that avoid or reduce emissions. For example, renewable energy and those that remove emissions such as reforestation or carbon capture projects.
In September, the Taskforce was convened to take stock of existing voluntary carbon markets. It is seeking responses to the consultation from stakeholders.
U.S. Renewable Fuels Legislation
For now, renewable fuels are a niche market. But U.S. Renewable Fuels Legislation could garner bipartisan support with Biden set to enter office with a divided Congress. The legislation will support the demand for products like renewable diesel.
Democrat President-elect Joe Biden has pledged to move the United States to a zero-carbon emissions scheme by 2050. However, under a divided Congress, ambitious plans to tackle rising emissions may be put on ice.
But renewable fuels may be different. Some in both the oil and green energy industries support their development.
Some refiners have been investing in cleaner fuels they derive from feedstocks. Cooking oil, for instance, as these refiners are taking advantage of state subsidies designed to reduce carbon emissions.
State and federal incentives could expand that market. Moreover, giving energy companies revenue opportunities while reducing carbon emissions.
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