Resilient LLP (formerly DeMarco Allan LLP)
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DT Vollmer

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Biden-Harris Administration Announces Principles for High-Integrity Voluntary Carbon Markets

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The Biden-Harris Administration (the Administration) today released the Voluntary Carbon Markets (VCM) Joint Policy Statement and Principles (the Principles), along with an accompanying fact sheet (the Fact Sheet). The Principles represent the U.S. government’s affirmation that high-integrity VCMs can and should play a meaningful role in reducing and removing global greenhouse gas (GHG) emissions and support the objective of global net-zero emissions by 2050. The Principles support the Administration’s commitment to ensuring VCMs effectively channel private capital into innovative technological and nature-based solutions, while also protecting natural ecosystems and supporting the U.S. and international partners in achieving their climate objectives.   The Principles follow other key U.S. climate-related legislation and policies, including the Inflation Reduction Act (see our earlier bulletin here), climate adaptation and resilience plans for federal agencies (see our earlier bulletin here), and the U.S. Department of the Treasury’s Principles for Net-Zero Financing and Investment, released last year, supporting the development and execution of strong net-zero commitments and transition plans by financial institutions, with a focus on Scope 3 financed and facilitated GHG emissions.   This bulletin briefly summarizes the Principles, their anticipated role in addressing climate change, and other ongoing U.S. government actions to support VCMs.    Principles for high-integrity VCMs. The Principles provide seven principles for high-integrity VCMs, drawing from existing best practices for credit certification standards, including the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the G7’s Principles for High-Integrity Carbon Markets, the Commodity Futures Trading Commission’s proposed guidance regarding the listing of voluntary carbon credit derivative contracts (December 2023), the Integrity Council for Voluntary Carbon Markets (ICVCM) Core Carbon Principles (see our earlier bulletin here), and relevant decisions under Article 6 of the Paris Agreement. The Principles are as follows: Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization. Credit-generating activities should avoid environmental and social harm and should, where applicable, support…

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Ontario Publishes New Draft Regulations on Corporate Power Purchase Agreements

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Ontario’s Ministry of Energy and Natural Resources (the Ministry) has announced new draft amendments (the Proposed Amendments) to O. Reg. 429/04, Adjustments Under Section 25.33 of the Act (the Regulations). The Regulations establish the global adjustment (GA) fees Ontario’s large commercial electricity consumers must pay to fund the cost of non-wholesale market electricity contracts pursuant to section 25.33 of the Electricity Act, 1998 (the Act). The Proposed Amendments are based on feedback received from stakeholders during the consultation held in late 2023. The anticipated effective date for the Proposed Amendments is May 1, 2025.   This bulletin briefly summarizes the Proposed Amendments and key information.   Background. The Independent Electricity System Operator (IESO) began procuring new clean electricity resources in 2023 as directed by the province’s Powering Ontario’s Growth plan. The IESO initiated electricity capacity resource procurement in 2023 and plans to start electricity energy resource procurement in 2024. Key objectives. The Proposed Amendments seek to support the growth in procurement of new clean generation in the province. This is done by allowing Industrial Conservation Initiative (ICI) Class A market participants to offset their facility’s demand in the top five peak hours of a base period for settlement purposes by entering into power purchase agreements (PPAs) with non-emitting generation facilities that are not connected behind the facility’s meter.   Eligible technologies. The types of eligible technologies under the Proposed Amendments are wind, solar, hydroelectric, and biofuel. In making the announcement, the Ministry stated that it recognizes the interest in pairing these technologies with energy storage and small modular reactors (SMRs), but deferred inclusion of these additional technologies due to implementation complexities. Energy storage resources are critical to a cost-effective, safe, clean, and reliable electricity grid, and the Ministry may wish to consider expediting the eligibility of energy storage (particularly battery electric storage) under the Proposed Amendments.   Stakeholder feedback. Interested stakeholders are encouraged to submit feedback on the Proposed Amendments by June…

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ECCC Publishes Protocol for Improved Forest Management on Private Land

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Environment and Climate Change Canada (ECCC) yesterday published the Improved Forest Management on Private Land, Version 1.0 protocol (IFM Protocol) alongside the previously published protocols for Landfill Methane Recovery and Destruction and Reducing Greenhouse Gas Emissions from Refrigeration Systems (see our earlier bulletin here). The IFM Protocol provides requirements for project implementation and the methodology for quantifying greenhouse gas (GHG) reductions from eligible IFM projects. Carbon offset credits generated under the Canadian Greenhouse Gas Offset Credit System Regulations (the Regulations) from eligible projects can be used to comply with obligations under the federal Output-Based Pricing System or to meet voluntary climate targets or commitments.  The launch of the IFM Protocol follows British Columbia’s recently published revised Forest Carbon Offset Protocol 2.0 earlier this month, which, among other updates, now requires First Nation engagement and consultation on all projects (see our bulletin on the draft protocol here).  This bulletin briefly summarizes the IFM Protocol and provides updates regarding other protocols under development by ECCC.  The IFM Protocol Eligible projects under the IFM Protocol may register in Canada’s GHG Offset Credit System if the following conditions, among others, are met: Location. The project must be located in private forestland where carrying out forest management activities is legally permissible and is considered merchantable (“managed forestland”) in a province or territory in Canada. However, the IFM Protocol is also applicable to provincial and federal Crown lands where a First Nation has exclusive use and occupation. Baseline scenarios. Baseline scenarios may be updated during the crediting with a minimum of 5 years between updates. To determine the baseline scenario, proponents must follow a 3-step process set out in the IFM Protocol to determine regional and project-specific scenarios and the most conservative baseline scenarios between them. Eligible project activities. Project proponents may undertake any IFM activity that enhances carbon stocks within the project site relative to the baseline scenario. Eligible project activities include,…

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G7 Climate, Energy, and Environment Ministers Commit to Urgent Action on Climate Change

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The Group of Seven (G7) recently published the Climate, Energy and Environment Ministers’ Meeting Communiqué following the G7 Ministers’ Meeting on Climate, Energy and Environment held last week in Turin, Italy. This marked the first meeting of G7 climate, energy and environment ministers (the Ministers) since COP28 last November and included renewed commitments on strengthening energy security, greenhouse gas (GHG) emission reduction, limiting global temperature increases to 1.5°C, and the imperative of transitioning to cleaner energy sources for economic growth and climate resilience. We view the Ministers’ renewed dedication to energy transition as the meeting’s most significant outcome, although it is important to note that countries heavily reliant on coal maintain some degree of flexibility. This bulletin briefly highlights key commitments made by the Ministers. Carbon Markets. Key carbon market commitments include: work jointly towards delivering robust outcomes from the Work Programme on Article 6 at COP29 in Baku, Azerbaijan later this year; explore innovative options for carbon markets and carbon pricing to contribute to mobilizing public and private contributions to climate finance; and  enhance demand and robust certification standards for carbon dioxide removals.  Energy. Key energy commitments include: phase out existing unabated coal power generation in energy systems during the first half of 2030s or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with national net-zero pathways; setting a global target of reaching 1,500 GW of energy storage in the electricity sector by 2030, six times more than in 2022;  reduce demand for and use of fossil fuels, including by rapidly scaling-up clean technologies in power generation, transportation and other end users; and phase out inefficient fossil fuel subsidies, with all countries committing to a progress report in 2025, when Canada will have the Presidency of the G7 (read our earlier bulletin on Canada’s inefficient…

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SBTi To Extend Use of Environmental Attributes For Scope 3 Abatement

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The Science Based Targets initiative (SBTi) today released a statement (the Statement) from the SBTi Board of Trustees announcing its decision to extend the use of environmental attribute certificates (EACs), including but not limited to EACs from voluntary carbon markets (i.e., carbon credits), for the purpose of abatement of Scope 3 related emissions beyond the current limits in its Corporate Net-Zero Standard (the Standard). SBTi noted that the use of EACs is an additional tool to address climate change when paired with policies, standards, and procedures based on scientific evidence. This bulletin briefly summarizes important aspects of the Statement. Expansion of EAC Use. SBTi plans to broaden the application of EACs for Scope 3 emissions abatement and intends to introduce definitions of specific “guardrails” and thresholds, as well as applicable rules, for such EACs to be considered valid for Scope 3 emissions abatement purposes and in line with “principles of mitigation hierarchy” — the principle that companies set science-based targets to address their value chain emissions and implement strategies to achieve these targets before actions or investments to mitigate emissions outside their value chain. Collaborative Framework Revision. SBTi indicated that it would consult, and seek cooperation agreements with, other relevant initiatives and stakeholders on revisions of the Scope 3 framework, which will include the responsible use of EACs in science-based target-setting. Carbon Credit Quality. SBTi does not intend to validate carbon credit quality and indicated that other entities are better positioned to assess the quality and integrity of carbon credits (an implicit reference to the Voluntary Carbon Market Integrity Initiative and the Integrity Council for the Voluntary Carbon Market). SBTi noted that such entities will have clear access to, and a complete understanding of, the demand-side guardrails and rules established by SBTi for the use of EACs. Accelerating Decarbonization. The SBTi indicated that the expanded use of EACs is…

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