From Principles to Practice: Operationalization of a Global Carbon Market under Article 6

In this Oxford Institute for Energy Studies podcast, Hasan Muslemani speaks with Hannah Hauman, Global Head of Carbon Trading at Trafigura and co-author of their second whitepaper series on carbon, From Principles to Practice: Operationalization of a Global Carbon Market under Article 6.  

Hannah explains how the Article 6 Rulebook and new international standards are helping create the foundations of a global regulatory carbon market — but also why putting these rules into practice at scale remains a major challenge.

To meet the Paris Agreement targets, the world must cut or remove 11 billion tonnes of emissions for a 2°C pathway and 25 billion tonnes for 1.5°C by 2030. Although penalties remain the main pricing tool, international trade in Article 6 regulatory credits will play a critical role in achieving cost-efficient decarbonisation. Global demand for carbon credits is expected to exceed 700 million tonnes per year by 2030, but supply constraints, bespoke host-country frameworks, and project lead times may create bottlenecks. 

The discussion highlights what is needed to enable scale:

• Interoperable accounting and registry systems
• Robust legal and reporting frameworks
• Precise credit quality assessment and MRV standards
• Scalable financial and risk-transfer solutions; and
• Capacity building in exporting countries. 

Read the full the Insight paper here.