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<\/a><\/p>\nCountries have had to strike bilateral deals under the UN system as it continues to flesh out rules for a separate market whereby credits could in future be sold to any country or company.<\/p>\n
\u201cIf there is an accounting error, they can solve that bilaterally between themselves,\u201d Wulandari says.<\/p>\n
The market\u2019s slow uptake contrasts with the fact that historically large polluters are increasingly expressing interest in paying for decarbonisation abroad to count towards their domestic targets.<\/p>\n
Countries have to submit climate plans to the UN every five years under the Paris agreement. Of those that have already submitted plans up to 2035, 89 per cent say they will purchase other countries\u2019 emission reductions to meet their targets, the UN said last month.<\/p>\n
The EU last week said that 5 per cent of the emission reductions in its climate target could be met through the purchase of international credits, up from an original proposal of 3 per cent.<\/p>\n
For the UK\u2019s target to reach net zero emissions by 2050, greenhouse gas removals have \u201cmoved from being an option to a necessity\u201d, according to an independent review published last month by the UK Department for Energy Security and Net Zero. This is to help offset hard to tackle emissions from shipping and aviation, which have been included in the target since 2021. The UK is however prioritising domestic carbon removal schemes, spending more than \u00a321.7bn over 25 years on carbon capture, usage and storage hubs.<\/p>\n
Countries are increasingly concerned about whether emissions from the burning of fossil fuels, which stay in the atmosphere indefinitely, can be offset by removals stored in trees and soils \u2014 which can be stored for a few years to hundreds of years before being released by fire or human disturbance.<\/p>\n
The carbon-removal industry is gaining momentum. Yet according to the independent report commissioned by the UK government, less than 0.1 per cent of global CO\u2082 removal is \u201cgeologically permanent\u201d \u2014 including technologies that capture CO\u2082 directly from the air \u2014 with the vast majority of the non-permanent credits coming from planting and restoring forests.<\/p>\n
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Despite these setbacks the industry is still bullish about the future of carbon removal and the role of the carbon trading market \u2014 which should ensure that countries do not double count emission reductions. Under Article 6, emission reductions can be sold to another country, but only one country may count them as part of its climate plan.<\/p>\n Data provider MSCI Carbon Market anticipates that half of global demand for carbon credits by 2040 \u2014 including from airlines, companies and governments \u2014 could be bought and sold under the UN system.<\/p>\n James Davis, climate-focused partner at the consulting firm Oliver Wyman, says the push for high standards under Article 6 is part of a \u201cflight to quality\u201d in carbon markets. \u201cThere is a heightened bar of disclosure, scrutiny and conservatism.\u201d<\/p>\n Europe\u2019s Climate Leaders<\/p>\n The FT is compiling its sixth annual list of Europe\u2019s climate leaders. We\u2019re looking for those companies that are making the most progress in cutting greenhouse gas emissions and remain committed to reducing their impact on the environment. For more information on how to register, click here<\/a>. The deadline for entries is November 15.<\/p>\n Climate Capital Where climate change meets business, markets and politics.\u00a0Explore the FT\u2019s coverage here<\/a>.<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/11\/https:\/\/images.ft.com\/v3\/image\/raw\/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1def83.jpeg\")
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