COP26 Briefings

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GLASGOW, 13 November - World leaders today adopted the Glasgow Climate Pact, a package of decisions at COP26 in Glasgow that includes completion of the carbon market elements of the Paris Rulebook. The guidance for Article 6 sets up a new structure for carbon markets to work in the service of the Paris Agreement goals.

The decisions provide clear accounting guidance for emissions trades between countries, and launch a new crediting mechanism that will give market access to all countries interested in attracting green investment through the global carbon market. Other forms of non-market approaches are also encouraged, with the creation of a new Glasgow Committee on Non-Market Approaches to begin work in 2022.

“This is a solid and ambitious outcome, because it establishes an integrity framework to support the expansion of carbon markets to help governments and businesses deliver higher climate ambitions,” says Dirk Forrister, IETA CEO.

“It will now be up to the private sector to channel green investment using these new market structures and accelerate the race to net zero.”

On the key political issues on Article 6, negotiators made a series of compromises:

• Corresponding adjustments will ensure no double-counting of units in both Article 6.2 and Article 6.4 mechanisms. IETA supports this decision because it assures integrity in the accounting system for the markets and mechanisms advanced in Article 6. 
• Certified Emission Reductions produced between 2013–20 may be used against countries’ first Nationally Determined Contributions. While this may not be the most ambitious outcome, it allows the carryover of a limited supply of pre-2020 units. IETA believes this will maintain the flow of finance to developing nations until the new mechanism is up and running.

• To assure an overall mitigation in global emissions from the Article 6.4 mechanism, a 2% discount will be cancelled from issuances from that mechanism. However, this factor was not applied to Article 6.2 market linkages.

• On the Share of Proceeds (SoP) for adaptation, negotiators agreed on a rate of 5% to be taken from issuances in the new Article 6.4 emissions crediting programme, but no fixed rate will apply to Article 6.2 transactions. Instead, countries using Article 6.2 are encouraged to contribute voluntarily to the Adaptation Fund.

IETA congratulates the UK Presidency and the Article 6 negotiators for such a significant success in Glasgow. In the lead-up to COP26, carbon markets surged in many jurisdictions, as businesses contemplated the enhanced ambitions of many countries. This included growth in every carbon market in 2021, with a near doubling of voluntary market transactions and the launch of China’s national ETS. Markets in Europe, California, Quebec, New Zealand, Australia and RGGI have seen record prices in the past month.

“Now we’re committed to build on the success of Glasgow,” says Andrea Bonzanni, IETA’s International Policy Director. “We look forward to working with countries to develop national strategies and policy frameworks for how to use Article 6 to further their climate ambitions – and to make new carbon market systems grow even stronger in pursuit of the Paris goals.”

There was a bit of a breakthrough in the talks on Article 6.4 today, as Brazil signalled that it is willing to compromise on the issue of corresponding adjustments.

For a long time, Brazil has argued that host countries should not have to make corresponding adjustments for reductions made outside the scope of an NDC that are sold abroad. 

However, we understand that last night Brazil acknowledged that if an Article 6.4 unit is authorised for transfer, a host country should make corresponding adjustments. 

We believe this is significant because it means that there is no longer an issue of whether reductions are made inside or outside the scope of an NDC.

We think this rule would also apply to reductions that are transferred for voluntary use, as long as the buying party wishes to transfer the reductions abroad. If, however, the buyer merely wished to claim the reduction, they could leave it in the host country registry and so no corresponding adjustment would apply.

There is also some language dealing with how to account for transfers for “other international mitigation purposes”, which we believe refers to markets such as CORSIA and potentially a future market for shipping via the IMO. But it may also refer to the voluntary carbon market, though we believe there is no consensus on this interpretation at the moment.

We know that neither India or China has so far agreed to this new Brazilian position, and therefore more work is needed. But this morning’s text also included options that would allow no corresponding adjustments to apply until 2025 or 2030, and this suggests to us that China and India are prepared to compromise.

Our team is optimistic that this breakthrough in Article 6.4 may generate the momentum needed to stretch to agreement on the other main issues in Article 6: the Share of Proceeds in Article 6.2 and the CDM transition in Article 6.4.

On the Share of Proceeds, we hear that Parties are developing alternative proposals that may mean that a levy for adaptation funding may not be required from Article 6.2 transfers. 

There's a growing recognition that generating adaptation finance from Article 6.2 could be problematic, given all the various types of activities that could be covered by this mechanism; applying a share of proceeds would probably be administratively quite difficult.

The US has said that it is still not certain whether it would even participate in Article 6.2 mechanisms, but the US team has indicated it would be willing to provide adaptation finance as a good faith measure. We understand the US pledged $50 million to the adaptation fund, rather than accept that a SoP should apply to all transactions.

The issue of Overall Mitigation of Global Emissions (OMGE) remains a sticking point, with Parties still debating whether they should cancel units at a rate commensurate with the scale of the mechanism under Article 6.4, or just consider the scale when cancelling units, or are just strongly encouraged to cancel units potentially on a similar scale.  

On the scale of the cancellation, in the Article 6.4 text released Thursday morning, Parties have made an additional proposal that may point the way to an agreement.

Thursday morning's 6.4 text contains three main options to address OMGE: the first sets a levy of between 2% and 30% on the first transfer of all units, while the second would impose more conservative baselines and shorter crediting periods to achieve the same overall result. 

But a new third option proposes a voluntary cancellation of allowances by transacting Parties, and we suspect this may be the compromise option that could get more widespread support.

Some of the more detailed implementation of these issues is likely to be handed down to the subsidiary bodies and to a new executive body of the Article 6.4 mechanism to be fleshed out.

In our daily members briefing today, Dirk suggested that with the corresponding adjustments issue in 6.4 seemingly headed towards resolution, the next issue to be addressed will be the CDM transition. We know that there are a range of options for this item, ranging from no carryover to a full carryover, and intermediate solutions may represent a potential landing zone.

Finance is typically left to the end, and we think the Share of Proceeds will be dealt with last of all. This raises the possibility that COP extends through to Saturday, even though COP President Sharma already began the closing plenaries this afternoon, in an effort to get as much of the agenda completed as possible before the final push.

Thursday at the IETA Business Hub

On Thursday, our partners Natural Capital Partners and Verra discussed how host countries can benefit from engaging with the voluntary carbon market.

CTX/Global Environmental Markets announced new formal agreements with Iceland, Nigeria, Democratic Republic of Congo, Philippines and South Africa to establish national registries.

IETA presented a session on natural climate solutions, looking at how these exciting technologies have evolved and what their prospects are. You can review the event on Zoom here.

YC Holdings hosted an event on "Carbon Pricing and CBAM: Perspectives from Asia”, and our final side event of COP26 was a panel discussion on DEFI and blockchain, and how they can accelerate the transition to net zero, hosted by AirCarbon.

Friday at the IETA Business Hub

IETA’s programme of side events has now concluded, but the Hub will be open all day on Friday in case you’re looking for a quiet spot to relax or work.

As usually happens in the second week of a COP, most of the action is going on behind closed doors, and the negotiating rooms are no longer open to observers. So we have had limited opportunity to get first-hand accounts of what’s happening.

Parties are discussing the “cover” decisions, the high-level political section of the COP text that will try to capture some of the major announcements and initiatives made by leaders during the first week. 

One of the most interesting elements of this cover text is item 37, that “calls upon Parties to accelerate the phasing-out of coal and subsidies for fossil fuels”, something that has never appeared in a COP decision. It’ll be worth watching to see whether this specific item remains in the text, or which Party or Parties try to have it removed!

So far this text doesn’t contain any references to Article 6 apart from a placeholder (item 70) which will probably only be filled once a decision on markets is reached.

This is the stage where senior negotiators are working more pragmatically, and this is usually a good sign. We have managed to meet Article 6 negotiators when they're not in the room, and what we hear is very positive.

We are at the point in the talks where each delegation seems to be getting ready to accept something they don't really like, in the spirit of getting a final text agreed by the end of the week. 

We’re told delegations are offering constructive bridging proposals and holding bilateral meetings to try to close the gaps between positions.

However, on the big three issues – corresponding adjustments in Article 6.2, Share of Proceeds in Article 6.2, and the carryover of Kyoto credits – Parties are not yet reaching agreement.

There were new versions of the draft Article 6 decisions published early this morning, which we shared with you by email. They weren’t very different from what we saw last week, though the number of brackets has been reduced, and there are still substantial sections of text that are not agreed.

We understand that negotiators are discussing a number of bridging proposals, which we haven’t seen, but we expect to see another iteration of the texts tomorrow morning which may incorporate these new elements.

We’ve been hearing speculation about various elements that might be in a final text. One of these deals with the relationship between the voluntary carbon market (VCM) and the mechanisms established under Article 6.

One such rumour involves whether corresponding adjustments may be required for voluntary market transactions. Our view is that the Article 6 discussions have never implied that the VCM should be brought under the umbrella of the Paris mechanisms.

There has also been discussion over whether corresponding adjustments might be required for reductions made from projects that fall outside the scope of a country’s NDC. Several Parties have for a long time rejected the idea that they should have to make adjustments for such transactions, but we now hear that they are prepared to be flexible on this.

Some of the same countries that are against having to make corresponding adjustments are the same countries that want a large carryover of Kyoto credits, so it’s clear that they will need to compromise. We have heard proposals for “transitional arrangements” for corresponding adjustments and for specific limitations on how many Kyoto units can be brought into the Paris system.

We will notify you of any new texts as soon as they become available.

Late in the day, the United States and China issued a Joint Statement on Enhancing Climate Action in the 2020s, in which they pledged to cooperate on a range of areas related to decarbonisation.

The two countries also pledged to “work cooperatively to complete at COP26 the implementing arrangements (“rulebook”) for Articles 6 and 13 of the Paris Agreement, as well as common time frames for NDCs.” Both also committed to communicate their 2035 NDCs in 2025.

Wednesday at the IETA Business Hub

Our opening event on Wednesday was hosted by the Arbor Day Foundation, discussing how to go beyond carbon neutrality and how nature-based solutions, specifically trees and forests, put us on a path to net-zero and carbon negative outcomes. The event can be reviewed here; use the passcode: v+%dU0y7.

IETA hosted a very popular “Americas Deep Dive” looking at sub-national efforts as well as the prospects for federal action in the US, as well as developments across North American and Latin American voluntary markets. Technical issues mean we can’t bring you a link immediately, but we will add it once it’s available.

IETA CEO Dirk Forrister sat down with Peter Liese, the European Parliament’s rapporteur for the EU’s “Fit For 55” package, to discuss EU climate ambition and reforms to the EU ETS. You can view the conversation here.

Germany’s environment ministry (BMU) held a virtual discussion on “Challenges and Opportunities for the Voluntary Carbon Market”, with both buyer and seller perspectives. And in the final event on Wednesday, Xpansiv presented a session on “Scaling the Voluntary Market: The Emergence of Standardised Contracts”. 

Thursday at the IETA Business Hub

Our first event on Thursday begins at 1100 GMT, when Natural Capital Partners and Verra will discuss how host countries can benefit from engaging with the voluntary carbon market. Virtual participants can join here.

At 1200 GMT, CTX/Global Environmental Markets will announce new formal agreements signed with the governments of Iceland, Nigeria, Democratic Republic of Congo, Philippines and South Africa to establish national registries that would link to the eventual Article 6.2 system. You’ll be able to watch this event here.

At 1330 GMT IETA will present a session on natural climate solutions, looking at how these exciting technologies have evolved and what their prospects are. We will stream the event on Zoom here.

YC Holdings will take over at 1500 GMT to host an event entitled "Carbon Pricing and CBAM: Perspectives from Asia”.

The final event of the day takes place at 1630 GMT; AirCarbon Exchange will host a panel discussion on DEFI and blockchain, and how they can accelerate the transition to net zero. Virtual participants may register for this event here.

All talks were behind closed doors on Tuesday (informal informals and bilaterals), so we were unable to follow the discussions. We understand progress is being made, but we are not aware of any specific landing points.

Delegations were asked to submit proposals by 1800 GMT, and we expect new iterations of the Article 6 texts to be issued overnight. Potential cover decisions are being assembled into draft form, which may also be released overnight.

As of 2300 GMT, the Presidency had not yet published a daily agenda for Wednesday, so we are unaware of any schedule for stocktaking meetings or plenaries.

However, Business and Industry NGOs are scheduled to speak during the resumed High-Level Segment of the COP tomorrow afternoon. You will be able to watch the plenary online. 

We will bring you up to date at our live members' briefing on Wednesday afternoon.

Tuesday at the IETA Business Hub

Carbon Finance Labs introduced a new tool to create, track and manage carbon declarations across supply chains for all products and services, and also presented a new carbon credit origination platform which has been designed for the e-mobility, decentralised storage and power grid flexibility sectors.

The Global CCS Institute hosted a panel discussion on the role that carbon capture and storage can play in tackling climate change, and the Gulf Organisation for Research & Development (GORD) presented its concept for a global carbon market through a “Global Carbon Council”.

Verra held a very popular meeting to discuss trends and changes in the voluntary carbon markets and the outlook for growth.

The Negative Emissions Platform brought together leading carbon removal buyers, suppliers, and thought leaders to discuss what enabling framework is needed to take public and private procurement of high-quality permanent removals to climate-relevant scale.  

Finally, the Federation of Indian Chambers of Commerce and Industry (FICCI) discussed the prospects for renewables and grid-scale storage as a cost-effective replacement for fossil fuel-based power generation.

IETA also held its Annual General Meeting this afternoon, and Dirk will be reporting on the outcomes and decisions in due course.

Wednesday at the IETA Business Hub

Our opening event at 1000 GMT on Wednesday is hosted by Arbor Day Foundation, discussing how to go beyond carbon neutrality and how nature-based solutions, specifically trees and forests, put us on a path to net-zero and carbon negative outcomes. You can register for virtual participation here.

At 1130 GMT IETA will host an “Americas Deep Dive”. Katie Sullivan will moderate a panel discussion among experts on sub-national efforts as well as the prospects for federal action in the US, and will offer insights into developments across North American and Latin American voluntary markets. Virtual participation will be possible here.

IETA CEO Dirk Forrister will sit down at 1300 GMT for a conversation with Peter Liese, a member of the European Parliament and rapporteur for the EU ETS reforms, to discuss EU climate ambition and the bloc’s “Fit for 55” package. You can follow this conversation here.

Switzerland’s KliK Foundation will host a workshop at 1330 GMT to discuss the technical aspects of Article 6 and how they can fit together with national measures and frameworks. KliK is offering virtual participation here.

Also at 1330 GMT, Germany’s environment ministry will host a virtual discussion on challenges and opportunities for the Voluntary Carbon Market, with both buyer and seller perspectives. A panel discussion will cover how to ensure high quality in carbon credits, and how companies can make credible use of them. You can watch this event here.

The final event of Wednesday at 1630 GMT is hosted by Xpansiv, who will present a session on “Scaling the Voluntary Market: The Emergence of Standardised Contracts”.

COP26 moved into its political phase on Monday, with a stocktaking plenary convened to receive the reports and draft texts from SBSTA, which had completed its work on Saturday.

SBSTA Chair Tosi Mpanu Mpanu reported that Article 6 talks showed “a determination to find solutions and compromises”. He described the texts as “bold”, and expressed his belief that “they can be bolder still. There are areas where convergence is apparent… there are a limited number of remaining difficult issues. Parties are aware of the delicate linkages between items.”

In our Week 1 wrap, sent last night, we brought you updated texts from Saturday morning, but newer texts were produced on Saturday evening, which you can find here:

Article 6.2

Article 6.4

Article 6.8

The Saturday evening versions are largely similar to their predecessors; nothing has been deleted from the latter, though new elements have been added to reflect the most recent discussions. 

Our team noted that the number of brackets has increased fairly significantly in both the Article 6.2 and Article 6.4 texts, while the number of Article 6.8 text brackets have decreased. 

We don’t think, however, that this means that Parties have moved even farther apart. Expert observers tell us that the atmosphere remains positive among negotiators, and that the general feeling is more upbeat than in either Madrid in 2019 or Katowice in 2018.

Our team is going through the texts to try to provide some input into the process, and we welcome any input from members who would like to share their views.

At the stocktaking plenary, COP President Alok Sharma appointed ministers to push forward work on the remaining outstanding technical issues, and encouraged Parties to use all available methods to complete the bulk of the technical work by the end of Monday. He appointed SBSTA Chair Tosi Mpanu Mpanu to lead Article 6 discussions on a “very limited number of issues on which technical progress can still be made”.

He also asked the ministers from Norway and Singapore, who also conducted ministerial consultations in the first half of the year, to deal with “specific issues that would benefit from political guidance”. He cited in particular adaptation finance in Article 6.2, accounting for units generated outside the scope of NDCs, and the use of pre-2020 (Kyoto) units to meet NDCs.

Sharma also tasked ministers with resolving issues regarding common timeframes for NDCs, the enhanced transparency framework, adaptation, mitigation, maintaining 1.5 degrees Celsius within reach, loss and damage, climate finance.

He set a deadline of Tuesday for these political consultations to be completed, after which he will hold a stocktaking meeting of ministers.

A number of negotiating blocs made interventions during the opening COP plenary today. Despite Sharma’s plea for brief statements, all the main negotiating groups made lengthy interventions. We noted that these came mainly from developing country groups: the G77 and China, the Like-Minded Developing Countries, the African Group, the Arab Group, and the BASIC group, which did not take the floor during the first week of the COP.

The various statements appeared to take a step back from the detail-oriented statements of the first week. All stressed the importance of adaptation finance, common but differentiated responsibilities and the need for developed countries to contribute to adaptation finance; it seems that we are now getting a clearer picture of the political context for the week’s work.

Interestingly, while Article 6 was mentioned, the issue of Share of Proceeds was only referenced by India on behalf of BASIC, which may be a sign that while adaptation finance may be a priority for this COP, it may not necessarily need to be included in Article 6.2.

After the plenary meeting was suspended, negotiators spent the afternoon in bilateral discussions and informal talks, though these were held in a closed format, which means observers were not admitted. We were hoping to get an update this evening, which we’ll communicate in tomorrow’s briefing.

Monday at the IETA Business Hub

Monday’s schedule of open events at the #COP26BizHub began with a panel discussion hosted by the Negative Emissions Platform on how corresponding adjustments might work in the context of a new EU carbon removal certification mechanism.

The Edison Electric Institute assembled senior power industry figures to highlight the actions their companies are taking to reach net zero emissions.

The Swedish Energy Agency and the Global Green Growth Institute hosted a discussion on what steps need to be taken to develop Article 6 ITMO transactions. 

Quebec presented the Glasgow Declaration on Carbon Pricing in the Americas, with participation from ministers and officials from 12 national and sub-national jurisdictions in Chile, Panama, Mexico and Canada. The Declaration emphasises the importance of carbon pricing and international cooperation in carbon markets to achieve net zero.

The final event on Monday saw Switzerland’s KliK Foundation host an exchange of experiences and views on how to operationalise Article 6.

Tuesday at the IETA Business Hub

We open the Hub at 0900 GMT on Tuesday with a session hosted by Carbon Finance Labs, who will introduce a new tool to create, track and manage carbon declarations across supply chains for all products and services. You can tune to watch this event here.

Carbon Finance Labs will then present at 1000 GMT a new carbon credit origination platform to accelerate the global transition to e-mobility, decentralised storage and power grid flexibility. The event will be streamed immediately after the first session using the same link.

At 1030 GMT, the Global CCS Institute will present a panel discussion on the role that carbon capture and storage can play in tackling climate change.

This will be followed at 1200 GMT by a session in which the Gulf Organization for Research & Development (GORD) will present its concept for a global carbon market through a “Global Carbon Council”.

At 1330 GMT, Verra will discuss trends and changes in the voluntary carbon markets and the outlook for growth. Join this event here.

Also taking place at 1330 GMT is a virtual meeting of ICROA to discuss the latest developments from organisations that work to enhance the market’s transparency and legitimacy using new technology. You can participate in this session by registering here.

The Negative Emissions Platform will host a panel session at 1500 GMT in which leading carbon removal buyers, suppliers, and thought leaders will discuss the enabling framework needed to take public and private procurement of high-quality permanent removals to climate-relevant scale.

The final event of the day takes place at 1630 GMT, and is hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI). The event will discuss the prospects for renewables and grid-scale storage as a cost-effective replacement for fossil fuel-based power generation.

The Article 6 negotiations under the Subsidiary Body for Scientific and Technical Advice (SBSTA) came to an end on Saturday with Parties still divided on numerous issues.

The UK Presidency had asked SBSTA delegates to complete their work in time for cleaner versions of the draft text to be passed up to ministers on Monday when the CMA reconvenes, but even a fresh iteration of the three texts on Saturday morning could not unlock entrenched positions.

Instead, the latest texts, together with an explanatory note from the SBSTA chair, Tosi Mpanu Mpanu of the Democratic Republic of Congo, have been forwarded to the UK President Alok Sharma. These texts can be found here: Article 6.2,Article 6.4 and Article 6.8.

In a final SBSTA plenary on Saturday evening, most negotiating groups expressed regret that Article 6 issues hadn’t been advanced further, but also their appreciation for the work done by the SBSTA chair.

Switzerland for the Environmental Integrity Group emphasised that there need to be clear rules on corresponding adjustments, while Bhutan for the Least Developed Countries said, “We are still hearing arguments against a Share of Proceeds for the Adaptation Fund, which threatens the balance between adaptation and mitigation.”

Antigua and Barbuda for AOSIS said: “The Share of Proceeds should also be set here; 5% is very low and should not be in brackets.” Parties did not refer to the issue of carrying over CDM projects and credits, though the Climate Action Network urged governments to not allow any carryover, and to require corresponding adjustments for all transfers, whether inside or outside the scope of NDCs.

Parties also underlined the importance of agreement on common timeframes for NDCs and robust transparency rules for reporting. You can access a full recording of the SBSTA plenary here.

Our team believes negotiators have made incremental progress on improving the options paper that was published before the COP began. Options in the text are clearer and more concise, but there’s still a long way to go. While we had hoped that they would clear out more of the “clutter”, it seems clear the technical negotiators didn't really have political authority to move on those issues.

The International Energy Agency estimated last week that the updated NDCs, together with the Global Methane Pledge which 100 countries have signed up to, could together help keep temperature increases to just 1.8 degrees Celsius by 2050.

And since nearly 90% of the updated NDCs show interest in utilising the capabilities of Article 6 to deliver individual Parties’ climate ambitions, it’s vital that COP26 finalises this last part of the Paris Rulebook. Private sector investment will do much of the heavy lifting, and companies too need robust market rules.

A lot is going to depend on how well the heads of delegations have been briefed by their experts and, in turn, how well ministers are briefed when, as we expect, they take up the various issues on Monday.

Our view on outstanding Article 6 agenda items is that the CDM carryover will probably be limited in some way, chiefly in order to avoid overloading the Paris mechanisms with reductions from the outset.

We’re optimistic that the Share of Proceeds will apply in Article 6.4 but we think it unlikely that SoP will apply in Article 6.2.

On corresponding adjustments, we anticipate that the COP will decide on a transitional implementation over a period of some years.

At a higher level, it’s worth noting that consensus on Article 6 may also depend on how the COP decides to capture the many announcements, commitments and initiatives that have been made in Glasgow. Some of this may be represented in “chapeau” text at the top of the main COP decision document, but it will be important for many, if not all, stakeholders that all the heightened ambition is represented in the many decision texts.

Monday at the IETA Business Hub

Monday’s schedule of open events at the #COP26BizHub begins at 1030 GMT with a session hosted by the Negative Emissions Platform. A panel of experts will discuss how corresponding adjustments might work in the context of a new EU carbon removal certification mechanism. This event will be available to watch virtually.

At 1200 GMT, the Edison Electric Institute will bring together some senior power industry figures to highlight the actions their companies are taking to reach net zero emissions. You can register to watch this event here.

The Swedish Energy Agency and the Global Green Growth Institute will host a discussion at 1330 GMT on what steps need to be taken to develop Article 6 ITMO transactions, and participants will also discuss the state of the Article 6 negotiations.

At 1530 GMT, the governments of Quebec and Chile, as co-chairs of the Carbon Pricing in the Americas platform, will present the New Glasgow Declaration on Carbon Pricing in the Americas, with participation from ministers and officials from national and sub-national jurisdictions in Chile, Panama, Mexico and Canada. The Declaration emphasises the importance of carbon pricing and international cooperation in carbon markets to achieve net zero. Virtual participation will be available here.

Our last event on Monday will take place at 1630 GMT, in which Switzerland’s KliK Foundation will host an exchange of experiences and views on how to operationalise Article 6.

Friday was another hectic day both at the IETA Business Hub and in the negotiating rooms. We hosted another 11 meetings and side events, while Article 6 talks began to bog down amid reports of expanding texts and delayed discussions.

All of which is pretty standard procedure for the end of the first week, as Dirk told our daily Zoom briefing. “You can usually count on there being disarray at the end of week one, because they need the ministers to come in and be heroes in week two.”

The action on Article 6 kicked off with a heads of delegations meeting in the morning, that ran for two hours instead of the scheduled one. Our team said that it’s positive that negotiators are still talking about text, and that the text is cleaner than the previous version. 

The Article 6 contact group held informal discussions throughout the afternoon, alternating with the stream of talks that is dealing with the guidance to the CDM. The informal consultations resumed again in the evening, with the promise of a long night, as Parties went through the draft text in close detail. Several insiders noted that the text (and the number of brackets) appeared to be expanding rather than contracting.

At around 10m talks ended and the co-facilitators asked for updated text proposals by 11pm, with the goal of reconvening the contact group at 1000 GMT on Saturday. They added that a new text will need to be finalised and sent to the presidency tomorrow in time for a closing SBSTA plenary in the afternoon.

There are also some useful analyses of the Article 6 discussions and texts on Twitter by Tennant Reed of Ai Group, Simon Evans of Carbon Brief and Natalie Jones of IISD.

Negotiators also advanced discussions on Article 6.8 (non-market approaches), in which text was elaborated with potential work programmes to take on after COP26.

There may be further late night informal sessions, and we will bring you any news in an update in time for Monday morning.

Friday at the IETA Business Hub

We kicked off Friday with a side event organised by ACR on the importance of carbon capture utilisation and storage, and how it forms a valuable part of an “all of the above” approach to mitigation.

IETA hosted an involving session on the the reforms to the EU ETS and which issues are likely to be important in the political negotiations to come. You can watch this session here.

We then held a well-attended session looking into “What Business Wants from Article 6”. Speakers from mining, law, energy and environmental sectors participated in the discussion, which you can follow here.

Representatives from Argentina’s Misiones province presented their experiences in developing one of the world’s first sub-jurisdictional REDD+ programmes.

We ended the day with a packed room (Covid-19 distancing rules permitting) to “Meet the Voluntary Carbon Market”, a Q&A panel discussion with representatives of the Integrity Council of the Voluntary Carbon Market, the new name for the former TSVCM.

Saturday at the IETA Business Hub

On Saturday afternoon at 1400 GMT Viridis Terra will present “TreesOfLives”, a high-quality nature-based carbon removal product that generates impacts, financial returns, and benefits for all.

We’ll send out a Week One wrap on Sunday, in which we’ll take a high-level look back at the first half of COP26, and preview the IETA Business Hub programme for Monday 8 November.

Welcome to our daily briefing from COP26 in Glasgow. The pace has been relentless, both in the negotiations and at the IETA COP26 Business Hub, where we hosted another 11 events and meetings today.

Across the COP, it was energy day, and we saw a trio of major announcements: the "Global Coal to Clean Power Transition Statement" saw more than 50 countries and sub-national jurisdictions commit to ending the permitting and financing of unabated coal plants. These include Vietnam, Indonesia and South Korea. The Powering Past Coal Alliance was also boosted by the addition of Ukraine, and the Climate Investment Funds revealed that South Africa, Indonesia, India and the Philippines are to be pilot countries in its new Accelerating Coal Transition programme.

So far, more than 150 countries have submitted updated NDCs and 2030 targets, representing over 80% of global emissions, according to the World Resources Institute. There have been improvements to NDCs covering around 63% of emissions, and 82 countries now have net zero targets.

The IEA estimates that all these NDCs, including those that are conditional on climate finance, together with the commitments contained in Tuesday’s Global Methane Pledge, would, if achieved, lead to global temperatures increasing by 1.8 degrees Celsius above pre-industrial levels.

Away from the high-profile announcements, the Article 6 contact group continued to meet on Thursday, and we understand that a new text will be forthcoming overnight.

Negotiators focused on Articles 6.4 and 6.8 today. The discussion on Article 6.4 was longer and a large number of parties requested to speak and even though the meeting ran over, there wasn't enough time to let all of the speakers make their interventions.

The most contentious issue is related to the carryover of both activities and credits from the Kyoto Protocol. Our team noted that while in Article 6.2, the talks have evolved into developed versus developing country Parties, in Article 6.4 the picture is a lot more nuanced.  

There are some developing countries that want very strict limits on Kyoto Protocol activities, particularly the Least Developed Countries and the African Group. On the other hand, developing countries that have benefited the most from from the Kyoto Protocol and host a large number of projects – in particular Brazil and the Like-Minded Developing Countries – want to carry over many more credits and activities. 

The discussion on 6.8 (non-market approaches) made some progress. Some delegations stressed that this text needs to be given the same weight as the two market-based ones. 

Delegates also held very detailed discussions on the functions of the Article 6.4 Supervisory Body, which would replace the CDM Executive Board; our team felt that the discussion of topics such as the gender balance and term limits for members of Body represents a genuine intention to make progress and hopefully find agreement next week. 

“Informal-informal” talks were scheduled to end at around 10:30pm, while the co-facilitators got started on the drafting of updated texts, which we expect to see overnight.

IETA will be taking a close look at the new texts and liaising with legal experts in our group to consider how to respond. We'll share the texts with members as soon as we get them.

Thursday at the IETA Business Hub

The day began with a virtual event hosted by CLP, in which a panel of speakers discussed the outlook for Asia’s power sector in driving to a net zero goal. 

GIZ hosted a session in the Hub on lessons for developing countries in preparing for Article 6, with specific focus on Tunisia.

IPIECA led two panel discussions on how the oil and gas sector can play a role in driving low-carbon technologies and decarbonisation.

The Eastern Africa Alliance on Carbon Markets and Climate Finance led panel discussions on readiness for Article 6 and how regional partners can best prepare.

IETA held an event at the EU Pavilion on how pricing carbon relates to achieving net zero, with reference to case studies in Poland, Portugal and China.

Norton Rose Fulbright presented a discussion on the role of hydrogen in reaching net zero.

The Federation of Indian Chambers of Commerce and Industry examined the role of the global energy sector in the energy transition.

The final event saw CTX/GEM showcasing its technology to deliver global emissions trading under Article 6.

Friday at the IETA Business Hub

Our Friday programme kicks off at 1030 hrs, with American Carbon Registry looking at opportunities for carbon capture, utilisation and storage technology, and how stakeholders are overcoming barriers to deployment at scale.

At 1200 hrs, IETA will host a session looking at how the EU ETS will be aligned to help achieve the EU’s climate neutrality targets. Speakers from Uniper, Environmental Defense Fund, Vertis and ERCST will attend, and virtual participation will be available here.

At 1330 hrs IETA will host speakers from EDF, Resilient, RWE, Strive by Vertis and Pollination to discuss “What Business Wants from Article 6”. You can watch the event here.

Mercuria will host a session together with senior ministers from Argentina’s Misiones province to look at Misiones’ experience in setting up one of the first subnational REDD+ jurisdictional programmes. This session will start at 1500 hrs.

Our last event of the day is an invitation to all to come and “Meet the Voluntary Carbon Market”. We’ll welcome a variety of speakers in an informal setting to answer questions and share information about the various initiatives.

Ben Garside, co-founder, Carbon Pulse; Gordon Bennett, managing director, utility markets, ICE; David Antonioli, CEO, Verra; Joan MacNaughton, chair, The Climate Group; and Ingo Puhl, founding partner, South Pole at the premiere of Blue-Sky Thinking at the IETA Business Hub.

Greetings from Glasgow! It’s been an extremely hectic Wednesday at the IETA Business Hub; we hosted no fewer than 11 events and meetings at the pavilion, and ended the day with a surprise VIP guest who dropped in for a chat with Dirk Forrister during our daily members’ briefing (more later!).

The main headlines across COP26 today focused on finance. The UK Presidency launched the “Breakthrough Agenda”, a commitment by 42 countries to work together this decade to accelerate the development and deployment of clean technologies and sustainable solutions to meet the Paris Agreement goals. Finance ministers met to discuss the next steps in public financial commitments after 2025, when the current $100 billion a year pledge ends.

The UK and Fiji launched a Taskforce on Access to Climate Finance, to smooth the path for countries seeking to access climate investment.

35 countries agreed to mandatory actions to ensure investors have access to reliable information about climate risk to guide their investments, while 36 countries also supported the announcement of a new international body, the International Sustainability Standards Board.

In the negotiating rooms, our observers were pleasantly surprised by Parties’ focus on resolving technical issues, rather than on restating existing positions. Many Parties are focusing on specific wording on specific issues: a good sign, because it means that the delegations are really engaging with the text. As a result, we’re beginning to see signs of some potential compromises and landing points emerging. 

Our team noted that the contentious question of whether a Share of Proceeds should apply in Article 6.2 appears to have been “parked” for the moment. It’s not yet clear whether the SBSTA negotiators will return to it later this week, or leave it for ministers to deal with next week.

We were also pleased to see that, on the issue of corresponding adjustments for transfers outside of NDCs, there may be a path opening to compromise. There were some exchanges between the EU and some developing country Parties that seemed to signal a willingness to work together.

There’s no indication yet of when delegates will want to see a new version of the draft texts, though our team don’t rule out the possibility of new drafts as early as tomorrow night. Time is already running short for SBSTA to finish its work before the session ends on Saturday, and we may see some late nights (early mornings?) in the next couple of days.

Wednesday at the IETA Business Hub

Wednesday’s programme kicked off with an event hosted by Norton Rose  Fulbright dealing with financing the energy transition, after which Proklima hosted a virtual event on using market mechanisms to deal with fluorinated gases. You can register for a recording of this event here.

Oxy Low Carbon Ventures hosted a session on how to ensure that carbon removals can be treated in a consistent way across different mechanisms –compliance, voluntary and NDCs – and how to ensure different systems retain their integrity.

Verra hosted a popular panel discussion on the supply-side outlook for the voluntary carbon market and how it can scale up financial flows to developing countries, which you can watch here. 

IETA organised an event on “Carbon Removals and Compliance Markets: Enabling the ‘Net’ in ‘Net-Zero’”, to discuss how carbon removals could be integrated into existing market structures. You can watch a recording of this event here.

ICROA’s headline event of the day was a discussion on demand, supply and transparency in the voluntary carbon market as key factors for market growth in 2022.

IETA CEO Dirk Forrister hosted Quebec’s Premier François Legault for an informal chat, before we held the launch of “Blue-Sky Thinking”, a news programme produced in conjunction with ITN Productions. The programme features IETA members and collaborators, discussing how they are all working towards the Paris goals, and you can view it all online.

The day still held a final surprise for us all, however. As Dirk was briefing our members on the day’s negotiations on Zoom, he was joined by Bill Gates (yes, the Bill Gates!) and the two had a brief impromptu chat about carbon pricing.

Thursday at the IETA Business Hub

We’ve another packed day at the COP26 Business Hub on Thursday, with a mix of in-person and virtual events taking place. We kick off at 0900 hrs with an event by GIZ Tunisia looking at Article 6 preparedness in developing countries, with a focus on Tunisia. 

Simultaneously, we’ll be hosting a virtual event organised by CLP, looking at the Asian power sector and the transition to net-zero – please register in advance here to participate.

At 1030 hrs, IPIECA takes over the hub to host a panel discussion about the role of technology and partnerships for the energy transition and a sustainable future for all.

At noon, we host an event organised by the Eastern Africa Alliance on Carbon Markets and Climate Finance (EAA), GIZ, BMU, and the UNFCCC Regional Collaboration Centre Kampala, focusing on strengthening momentum on Article 6 in Eastern Africa and sharing experiences from the region.

Norton Rose Fulbright takes over at 1330 hrs, with an event showcasing the role of hydrogen in reaching net-zero, how to scale up production, and how to create a business model for hydrogen.

At 1500 hrs, the Federation of Indian Chambers of Commerce and Industry hosts an event about the energy transition and climate action. Virtual participation is possible via Zoom – the passcode is 688998.

That’s followed by a discussion about the future of voluntary carbon markets at 1630 hrs, organised by Vertis Environmental Finance and its voluntary markets brand, Strive. At 1800 hrs, CTX/GEM hosts a panel about infrastructure to scale the voluntary markets, followed by a drinks reception.

Elsewhere tomorrow, IETA is hosting a side event at the EU Pavilion at 1pm, looking at the role of carbon pricing in the net-zero transition, featuring an address from Lord Greg Barker, executive chairman of En+ Group. One not to be missed!