An introduction to Article 6 of the Paris Agreement and the Voluntary Carbon Markets. How do Article 6 markets and VCM differ? What is the link between the two market types? Introduction to Carbon Dioxide Removal (CDR), its role in climate change mitigation. Removals under Article 6 of the Paris Agreement. Removals in the voluntary carbon markets. The relationship between states and private actors. How can corporates get involved?

1. Carbon Markets and Carbon Removal
Eve Tamme
Managing Director
Climate Principles
23 July 2023, Carbon Markets Conference, Reykjavík

2. Who am I?
Eve Tamme
• 20 years of experience in climate policy, 15 years as a
policymaker
• Managing Director of Climate Principles — climate policy
advisory with a focus on carbon markets, carbon removal
and carbon capture
• Chair of Zero Emissions Platform
• Board of Directors at Puro.earth
• Board of Advisors at Carbon Gap
• Part of the European Commissions Expert Group on Carbon
Removals (observer in an individual capacity)
• Writing, speaking and media engagements + climate policy
blog at evetamme.com

3. Agenda
Article 6 and Voluntary Carbon Markets
a. How do Article 6 markets and VCM differ?
b. What is the link between the two market types?
Carbon Dioxide Removal (CDR)
a. The role of CDR in climate mitigation
b. Removals under Article 6 of the Paris Agreement
c. Removals in the voluntary carbon markets
Countries and private actors
a. The relationship between states and private
actors
b. How can corporates get involved?

4. Carbon Markets

5. Article 6.2
• trading between countries,
• no international oversight.
• Operational today. Deals between more than
20 seller countries and 6 buyer countries (as
of June 2023)
Article 6.4
• centralised mechanism,
• successor of Clean Development Mechanism
• Governed by the Art 6.4 Supervisory Body
• Timeline until operational?
(Article 6.8 – non-market mechanisms)
Article 6 of the Paris Agreement

6. Source: IETA, 2023
Article 6.2
Bilateral
Agreements
or MOUs
As of July,
2023

7. Compliance markets Voluntary markets
Mandatory targets
Actors: governments, companies
Examples:
• EU Emissions Trading system
• CORSIA (offsetting for international
aviation)
• South Africa carbon tax
• Colombia carbon tax
• Kyoto Protocol Clean Development
Mechanism
• Paris Agreement Article 6.2 and 6.4
voluntary targets
Actors: mostly companies
Examples:
Credits issued by non-governmental carbon
crediting standards, for example:
• Verra
• Gold Standard
• Climate Action Reserve
• American Carbon Registry
• Puro.earth
Credits also accepted in voluntary markets
Accept certain credits from voluntary markets
2
1
1
2
Increasingly integrated

8. Source: Pocket Guide to Article 6, European Capacity Building Initiative, 2022
Carbon Market integration

9. Carbon Dioxide Removal

10. Based on the IPCC Sixth Assessment Report, WGIII contribution, 2022

11. Carbon Removal Methods
Source: Carbon Dioxide Removal and Certification – What is it and why is it needed? Carbon Gap, Bellona and CATF, 2022

12. Source: The State of Carbon Dioxide Removal – 1st Edition, 2023
Broad durability timescale

13. • CDR is not new. Afforestation
and reforestation have been part
of climate policy for decades
• Kyoto protocol
• Paris Agreement
• Nationally Determined
Contributions
• Long Term Strategies
• Article 6 – covered in both 6.2 and
6.4 (governed by the Supervisory
Body)
Carbon Removal Under Article 6

14. Carbon Removal in VCM
Source: CDR.FYI (as of 21 Aug 2023)
Further clarity on the role of removals is needed:

15. Market actors

16. Corporates
• Transparent corporate target
setting and use of carbon
credits
• Many potential roles:
Market actors and relationships
Governments
• Guidance on how Article 6 will
be used
• How corporates can engage in
Article 6 markets
• The expected role of the VCM
and relevant national
frameworks and guidelines
where relevant
• The rules on corresponding
adjustments regarding VCM
buyers
sellers
standards
insurers
consultants
project
developers
verifiers/
auditors rating
agencies

17. • International carbon markets and
voluntary carbon markets are slowly
converging
• More guidance, clarity and
transparency is needed from the
governments to aid this convergence,
also in respect to market actors
• Eventually, carbon markets will
become carbon removal markets
Final words

18. @EveTamme
EveTamme
evetamme.com;
Eve.Tamme@climateprinciples.com
climateprinciples.com
Thank you