The Article 6.4 Supervisory Body (SB) has published guidance on activities involving removals under the Article 6.4 mechanism of the Paris Agreement (the Removals Guidance). The SB also published recommendations on the requirements for the development and assessment of Article 6.4 mechanism methodologies (the Methodology Requirements). Both recommendations will be presented for consideration and adoption by the Parties to the Paris Agreement (CMA) at COP 28 starting later this month in Dubai, UAE.
This bulletin highlights key information, guidance, and requirements provided by the SB in both the Removals Guidance and the Methodology Requirements.
Removals Guidance Recommendation
The Removals Guidance defines removals as the outcomes of processes to remove GHGs from the atmosphere through anthropogenic activities and destroy or durably store them.
Requirements. The Removals Guidance provides the following requirements for activities involving removals under the Article 6.4 mechanism:
- Monitoring. Activity participants must monitor removals through appropriate application of quantification and estimation based on field measurements, remote sensing, measurement through instrumentation, and/or modelling.
- Post-crediting period monitoring, reporting, and remediation of reversals. Activity participants must undertake monitoring, reporting, verification, and remediation measures during the post-crediting monitoring period to confirm the continued existence of removals and to address any reversals of removals for which 6.4 carbon credits (6.4ERs) were issued during the active crediting period(s). The SB noted that 6.4ERs will not be issued for removals generated after the last active crediting period, including during the post-crediting monitoring period.
- Reporting. Activity participants must prepare monitoring reports after implementing monitoring operations and methods. These reports are to be prepared without a gap between two successive monitoring periods. The SB noted that methodologies will contain provisions specifying the minimum frequency of monitoring report submission, commensurate with the degree and nature of the risk of reversals.
- Accounting for removals. Removals eligible for crediting must exceed the applicable baseline determined in accordance with the Methodology Requirements and will be calculated for each year in the crediting period. In addition, the SB will be developing further guidance and provisions for methodologies where an activity involving removals also results in emission reductions.
- Methodologies applicable for the crediting period. The latest version of the applicable methodology must be applied at the renewal of the crediting period.
- Addressing reversals. Reversals will be addressed through the cancellation of an equivalent amount of 6.4ERs. The Removals Guidance provides that the Article 6.4 Supervisory Body will establish a “Reversal Risk Buffer Pool” to insure against the general risk of, and to remediate, unavoidable reversals. However, 6.4ERs from the buffer pool cannot be cancelled to remediate avoidable reversals, which will instead be remediated through the cancellation of an equivalent amount of 6.4ERs from other 6.4 activities where the activity participants implement an activity with a negligible reversal risk and has foregone use of the buffer pool. In addition, the SB noted that it will develop further guidance on avoidable and unavoidable reversals, including how they are distinguished and demonstrated.
- Avoidance of leakage. Activity participants must address the risk of leakage and account for any remaining leakage in calculations of net removals in accordance with the Methodology Requirements.
- Avoidance of other negative environmental and social impacts. Activity participants must apply robust social and environmental safeguards to minimize and/or avoid negative environmental and social impacts.
- Host Party roles. A host Party may specify arrangements voluntarily provided by the host Party for (a) requiring activity participants to comply with existing and applicable national or regional regulations and (b) providing a sovereign guarantee to apply corresponding adjustments in respect of any amount of reversals incurred where the host Party assumes the role of an activity participant in the post-crediting monitoring period. In addition, the SB noted that is will be providing further guidance on addressing reversal risk and reversals in a manner consistent with Article 6.2 guidance.
Methodology Requirements Recommendation
The Methodology Requirements finalize the work of the SB on elaborating and developing draft recommendations on the application of requirements for methodologies provided in the rules, modalities and procedures for the Article 6.4 mechanism (RMP).
Methodology Principles. The SB noted that Article 6.4 mechanism methodologies are intended to provide the basis for assessment of creditable emission reductions or removals, and identify the types of activities that satisfy additionality requirements. Further, the Methodology Requirements set out the requirements to ensure that methodologies support the following principles consistent with the RMP:
- Encouraging ambition over time. Methodologies must contain provisions (i) to ensure that total creditable amount of emission reductions are progressively reduced to encourage ambition of activities over time; and (ii) encouraging the deployment of technologies or measures to facilitate knowledge transfers.
- Being real, transparent, conservative, credible. Methodologies must contain (i) credible methods for estimating emission reductions or removals to ensure that they represent actual tonnes of GHG emissions reduced or removed; (ii) provisions to require Article 6.4 activities to have a robust monitoring and data capture system as well as a reporting system; and (iii) provisions to ensure that emission reductions or removals are real, transparent, conservative, and credible.
- Establishing that the selected baseline is below business-as-usual (BAU). Methodologies must ensure that the baseline selected for a relevant emission reduction activity is demonstrated as being below BAU. This approach will also be applied to the development of standardized baselines.
- Contributing to the equitable sharing of mitigation benefits between participating Parties. Methodologies must contain provisions for contributing to the equitable sharing of mitigation benefits between participating Parties. In addition, the SB will establish a process enabling host Parties to communicate the application of conditions specified by the designated national authorities (DNAs) that ensure host Party benefits are retained.
- Alignment. Methodologies must require demonstration that the activity aligns with the policies, options, and implementation plans of the host Party’s NDC, long-term low GHG emission development strategies, and the long-term temperature goals of the Paris Agreement.
- Approaches to setting the baseline. Methodologies must contain provisions that require justification of the appropriateness of the choice of approach(es) for setting the baseline in accordance with the RMP. However, a host Party may determine a more ambitious baseline requirement at its discretion, which must then be approved by the SB.
- Encouraging broad participation. The SB noted that it will encourage development of methodologies covering a wide range of emission reduction and removal activities with broad sectoral and geographic coverage.
- Including data sources, accounting for uncertainty and monitoring requirements. Methodologies must be transparent and comprehensible with respect to included assumptions, parameters, data sources, and key factors.
- Recognizing suppressed demand. The SB noted that it will recognize suppressed demand in certain circumstances. Supressed demand is a situation where services provided to a population are insufficient to meet basic human needs and where the growth of emissions resulting from meeting such needs requires special consideration of baseline scenarios. In addition, the SB intends to develop a tool to provide guidance on how to determine supressed demand and the minimum level of service that may be considered as a reference level to determine the baseline.
- Taking into account policies and measures and relevant circumstances. Methodologies must contain provisions to take into account relevant circumstances, including national, regional, local, social, economic, environmental, and technological, based on robust data and verifiable information.
Additionality, Leakage, and Reversals. The Methodology Requirements also provides guidance on ensuring methodologies contain provisions to ensure that proposed activities demonstrate additionality, protect against the risk of GHG leakage, and address reversals of removals and emission reductions using an approach consistent with the Removals Guidance.
For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.
