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November brings excitement as climate calendars get busy. The weeks leading up to COP 28 come with interesting updates from the world of climate finance. |
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Carbon credit price for last week |
Price per credit: $3.80/tCO2e (+8.2%MoM) |
Based on top 500 projects globally by volume of credits retired |
The overall price per carbon credit has gone up by 8.2% over last month ($3.51). This rise is driven largely by companies looking to retire credits to meet end-of-the-quarter sustainability targets. We also see a healthy increase in the price per credit for nature-based solutions (+7.4% MoM) projects with a peak of $4.23 at the end of October. Household device (-6.6% MoM) project prices also rose at the end of October but have since fallen significantly, indicating cooling buyer interest. |
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Blue Carbon – Project Development Opportunities in India |
Our latest report discuss the environmental and investment potential that blue carbon ecosystems such as mangroves and seagrasses hold. These ecosystems sequester and store carbon dioxide at remarkable rates, offering a nature-based solution to offset carbon emissions. Blue carbon projects are strong contenders for conservation financing because they have suffered considerable historical losses and remain threatened globally. |
The report discusses opportunities and barriers to developing blue carbon projects in the voluntary carbon market along with actionable solutions. Read the executive summary to see what’s inside. |
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Draft guidelines for releases draft CCTS guidelines |
On November 8, the Bureau of Energy Efficiency(BEE) released the draft for the “Detailed Procedure for Compliance Mechanism under the Indian Carbon Market (ICM)”. Expected to be implemented in 2025, the Carbon Credit Trading Scheme (CCTS) under ICM is envisioned to accelerate decarbonisation and mobilise finance and technology towards achieving India’s NDCs. |
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The future of carbon removals |
Since July 2022, the Supervisory Body (SB) for Article 6.4 of the Paris Agreement has been working to bolster the regulations for the UN’s carbon crediting mechanism. The top priority for the SB has been to establish mechanisms that can command trust and address the quality concerns that were raised against the UN’s Clean Development Mechanism. While the SB has made significant progress in building a robust framework, a matter of concern is the body’s outlook towards the credibility of removal technologies. Since July, recommendations cautioning against the lack of permanence and reversibility of certain removal technologies have emerged multiple times. |
While the market currently places high value on nature-based solutions, this trend will likely change. Analyses from BCG and McKinsey suggest that technology-based carbon removal will likely outpace nature-based measures after 2030. Most well-established net-zero models rely on tech-based removal after 2030, seeing upward of 5 gigatons of carbon dioxide removed per year by 2050. Furthermore, a recent discounting trend for avoidance credits (buyers purchase more than one carbon credit to signify 1 tonne of CO2e avoided to account for credit quality) has emerged. In this regard, a more forward-thinking approach is required to encourage the development of technological removals, considering the role they are expected to play in the world’s net-zero journey. |
What can we expect from COP28 |
This year’s meeting will be held from November 30 to December 12 in Dubai, UAE and will address four key focus areas – energy transition, livelihoods, inclusivity, and delivering old promises related to climate finance while also establishing frameworks for new deals. The conference will see the conclusion of the inaugural Global Stocktake under the Paris Agreement – the result of two years of intensive work and collaboration. It will be an opportunity for countries and stakeholders to see where progress toward climate goals is occurring and where more progress is needed. |
This year we can expect to witness contributions to the Loss and Damage fund established during COP27, to help developing countries cope with the effects of climate change. The fund is meant to supplement the Green Climate Fund — a previous commitment by the developing countries that historically emit the most greenhouse gases to generate $100 billion a year after 2020 for mitigation and adaptation in less-developed countries. |
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Enabling Climate Finance as a tool for inclusive growth |
We were thrilled to contribute to the series, ‘Time to Venture: Scaling up Transformational Climate Tech in India’, which was launched at ORF-GEAPP’s Energy Transition Dialogue on November 2, in New Delhi. In this piece, we share how Neufin’s suite of products contributes to community positive climate action. We address the challenges that stand in the way of scaling climate finance in India. |
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Neufin’s free project Eligibility Checker |
Last month we launched the world’s first Project Eligibility Checker for carbon markets and were met with tremendously positive feedback. This is a free tool to help you assess if your project qualifies to earn via carbon credits, quickly and seamlessly. |
Haven’t tested it out yet? You can do it now! |
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Conference of Parties (COP 28, Dubai) |
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Our team will be on the ground and would love to meet. Please email rahool@neufin.co or rushil@neufin.co to arrange a meeting |
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The past month has witnessed progress in terms of developing frameworks for action. As we inch closer to COP 28, we continue to gain clarity on long overdue subjects, including the workings of Article 6.4 of the Paris Agreement and India’s Carbon Credit Trading Scheme (CCTS). |
The CCTS is particularly interesting, with the latest draft framework being dramatically simpler compared to the previous iterations. The draft mechanism makes mention of a single instrument to be traded in the ICM – Carbon Credit Certificates (CCC), with compliance to begin in 2025. Considering the reduction of sectors under compliance from 13 to 4 (steel, cement, pulp, and petrochemicals), it is obvious that through ICM, the government is planning to cushion these industries from the impact of CBAM. However, whether the regulatory and quality measures established under ICM pass EU’s quality test, remains to be seen. |
We’ll be back with more interesting updates next month. Team Neufin |
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