A recent report by a German non-profit suggested a two-tiered approach to multilateralism in international climate diplomacy, more distinctly distinguishing between institutional and implementation efforts, offers the most realistic path for turning talk into action.

CORSIA futures slipped marginally lower last week, with the benchmark now at a little above $9/tonne, while hundreds of carbon projects registered under the Kyoto Protocol’s Clean Development Mechanism (CDM) look set to miss a Tuesday deadline to enable their transition to the new Paris Agreement Crediting Mechanism (PACM).  

EU member states did not vote last week on rules defining which foreign CO2 prices importers can deduct from their Carbon Border Adjustment Mechanism (CBAM) fees, even though a decision had been scheduled.

Turbulence ahead - The cost of credits under aviation offsetting scheme CORSIA could rise almost eightfold to $100/t by 2035 as demand outpaces supply, according to MSCI Carbon Markets, which could result in a bill of up to $127 bln for the industry over the lifetime of the scheme. Emirates could face the heftiest bill at $8 bln - equivalent to a fifth of its 2025 operating revenue - over the scheme's lifetime, which covers emissions generated from 2024-35, according to MSCI. Meanwhile, Qatar Airways and United Airlines could pay $6 bln and $5 bln respectively over the life of the scheme in a high demand/tight supply scenario, equal to 26% and 8% of their 2025 revenues. However, under a softer scenario with higher supply and lower demand, Emirates could face a lower estimated cost of $2 bln over the period to 2035, with costs for Qatar and United falling to $1 bln each. (FT)

The vast majority of carbon projects developed under the Kyoto Protocol's Clean Development Mechanism (CDM) are set to miss a Tuesday deadline to enable them to transition to UN crediting under the Paris Agreement, leaving many legacy projects outside the new scheme.

Singapore Airlines said climate‑related compliance costs were financially material, with exposure projected at between SGD 50-200 million ($38-155 mln), and high risk impacts above that.

Chile and Switzerland have authorised a second standalone battery energy storage system (BESS) mitigation activity under Article 6 of the Paris Agreement, expanding the use of carbon finance to support grid-scale energy storage in the South American country.

Tanzania has rejected opposition claims that international carbon trading agreements amount to the sale or transfer of control over the country's natural resources, insisting that its carbon market framework is designed to protect national sovereignty while generating new revenue.

The UNFCCC’s latest draft procedure for the Article 6.4 mechanism registry sets out requirements for real-time public reporting of registry activity, detailed first-transfer rules, and proposed account fees for the Paris Agreement Crediting Mechanism (PACM).

Greenlight - A Mongolia-based emissions reduction project has been successfully registered under the Joint Crediting Mechanism (JCM), according to a notice by the joint committee between Japan and Mongolia. The project aims to cut emissions by some 6,300 tonnes per year through a planned 5 MW solar PV system and 3.6 MWh battery energy storage system in Zavkhan province. So far, around 129,320 credits have been issued under the Japan-Mongolia JCM partnership.

Coming soon - Officials from 11 member countries of the Central Asia Regional Economic Cooperation (CAREC) programme met in Tashkent last week to develop a regional approach to carbon markets under Article 6 of the Paris Agreement, according to a press release. Participants assessed gaps in carbon market readiness, exchanged lessons on generating carbon credits, and discussed private sector requirements for attracting carbon finance. The meeting also advanced work on a regional carbon market readiness plan and identified joint actions to improve access to international carbon markets.