On October 20, 2025, a coalition of nineteen leading companies in the energy, finance, and logistics sectors, launched the Carbon Measures Coalition, proposing a significant departure from established carbon accounting frameworks. The Coalition represents a prominent industry-led effort to move away from traditional inventory-based emission calculation methods toward a
Continue Reading Carbon Measures Coalition Signals Growing Momentum for Ledger-Based Carbon AccountingThe Greenhouse Gas Protocol’s Proposed Scope 2 Guidance: Key Changes and Considerations for Stakeholders
In late October, the Greenhouse Gas Protocol (“GHG Protocol”) proposed updated Scope 2 guidance for companies quantifying and reporting their greenhouse gas (“GHG”) emissions. If finalized as proposed, the guidance would have significant impacts on how companies plan their renewable energy investments and measure progress toward their climate goals. The
Continue Reading The Greenhouse Gas Protocol’s Proposed Scope 2 Guidance: Key Changes and Considerations for StakeholdersAn EU Biodiversity Market by 2027? The new EU’s Roadmap towards Nature Credits.
On July 7, 2025, the European Commission presented its Roadmap Towards Nature Credits, setting the blueprint for biodiversity certification in the EU. The Communication was also accompanied by a Q&A and a call for feedback by 30 September 2025.
Nature Credits: Practical Uses Across Sectors
In short, nature credits
Continue Reading An EU Biodiversity Market by 2027? The new EU’s Roadmap towards Nature Credits.CFTC Guidance: A Potential Integrity Backstop for Evolving Voluntary Carbon Market
In late September, the Commodity Futures Trading Commission (Commission or CFTC) approved final guidance regarding the listing of voluntary carbon credit (VCC) derivative contracts on CFTC-regulated designated contract markets (Final Guidance). Commission observers had anticipated issuance of the Final Guidance for several months, as it follows proposed guidance issued by CFTC in December 2023. The Final Guidance also follows the Biden Administration’s Joint Policy Statement on Voluntary Carbon Market Principles, discussed in our post earlier this year. The Final Guidance, while applicable to derivative (or futures) contracts, represents the first official action by a U.S. regulator to help validate the integrity of the VCCs underlying such contracts. In this vein, as the derivative contract and underlying VCC markets continue to expand and evolve, the Final Guidance may represent an integrity backstop of sorts for U.S. VCC market participants. Continue Reading CFTC Guidance: A Potential Integrity Backstop for Evolving Voluntary Carbon Market
DOE Announces up to $1.8 Billion in Funding in Next Phase of Regional Direct Air Capture Program
On October 10, the U.S. Department of Energy’s Office of Clean Energy Demonstrations (OCED) hosted a webinar providing an overview of the recently issued Notice of Intent (NOI) to award up to $1.8 billion in funding for new mid- and large-scale commercial direct air capture (DAC) facilities. The NOI represents the start of the next phase of OCED’s Regional DAC Hubs program contemplated by the 2021 Bipartisan Infrastructure Law (BIL), which requires DOE to financially support the development of at least four regional DAC hubs. DOE estimates that a net-zero emissions economy will require annually removing and capturing at least 400 million metric tons of carbon dioxide (CO2) from the atmosphere and emissions sources. A critical step in reaching this benchmark will be accelerating the commercialization and scaling of promising DAC solutions which is the goal of this next phase of the Regional DAC Hubs program. The NOI promises publication of the funding opportunity announcement before the end of this year.Continue Reading DOE Announces up to $1.8 Billion in Funding in Next Phase of Regional Direct Air Capture Program
Engaging in Voluntary Carbon Markets: Overview of Key Developments, Risks, and Opportunities
On May 28, the Biden-Harris Administration issued the Voluntary Carbon Markets Joint Policy Statement and Principles (Policy Statement). You can find Covington’s analysis of the Policy Statement here. Jointly announced by the U.S. Secretaries of Treasury, Agriculture, and Energy, and senior White House climate officials, the Policy Statement describes a three-pronged approach to responsible carbon market development and participation: (1) credit or supply integrity, including protections regarding climate and environmental justice; (2) demand integrity, to ensure the credible use of credits; and (3) market-level integrity, including facilitating efficient market participation and lowering transaction costs. The Policy Statement builds on other recent federal actions, including the Commodities Futures Trading Commission’s 2023 proposed guidance for voluntary carbon credit derivatives and the Securities and Exchange Commission’s final climate risk disclosure rule, which requires certain disclosures related to carbon offset purchases, in the Administration’s attention to and elevation of the voluntary carbon market as an important element in the nation’s climate policy.
In this post, we dive deeper into the voluntary carbon market landscape, implications for business, and additional recent developments. Continue Reading Engaging in Voluntary Carbon Markets: Overview of Key Developments, Risks, and Opportunities
Biden Administration Publishes Voluntary Carbon Markets Joint Policy Statement and Principles
On May 28, the U.S. Secretaries of Treasury, Agriculture, and Energy, along with senior White House climate officials, issued the Voluntary Carbon Markets Joint Policy Statement and Principles (Policy Statement). The Policy Statement provides observations regarding the current state of voluntary carbon markets, followed by a set of guiding principles for responsible market participation. A White House Fact Sheet describes the Policy Statement as representing the U.S. government’s commitment to advancing the responsible development of voluntary carbon markets, “with clear incentives and guardrails.” Notably, the Fact Sheet states that, with such incentives and guardrails, voluntary carbon markets can drive significant progress toward the Administration’s goals of reaching global net-zero greenhouse gas (GHG) emissions by 2050 and limiting warming to 1.5 °C.Continue Reading Biden Administration Publishes Voluntary Carbon Markets Joint Policy Statement and Principles
SBTi Board Announces Role for Carbon Credits in Scope 3 Emissions Abatement; Staff Clarifies Review Remains On-going
On April 9, the Board of Trustees of the Science Based Targets initiative (SBTi), a climate action organization that has validated corporate decarbonization targets for more than 4,200 companies to-date, issued a statement announcing that environmental attribute certificates (EACs), including carbon credits generated by voluntary carbon projects, may be used to abate Scope 3 greenhouse gas (GHG) emissions. It is possible to view the Board’s statement, unprecedented for SBTi, as recognition of the practical challenges associated with achieving Scope 3 emissions abatement without utilizing EACs. Yet, the statement also drew swift criticism from some stakeholders and observers, who argue that it represents a departure from SBTi’s science-based approach to corporate climate action.
Following the criticism, on April 11, “the overwhelming majority” of SBTi’s staff, which felt “compelled to issue multiple clarifications” of the Board’s statement, published a remarkable public response. Thereafter, on April 12, the Board supplemented its April 9 statement to clarify that no changes to the SBTi standards had been finalized. However, the Board’s statement and staff’s response show that interested stakeholders will have opportunities to provide SBTi with critical input regarding the use of EACs in Scope 3 emissions abatement that could have a material effect on any related revisions to the SBTi standards. Continue Reading SBTi Board Announces Role for Carbon Credits in Scope 3 Emissions Abatement; Staff Clarifies Review Remains On-going
Calculating and Reporting Greenhouse Gas Emissions: A Primer on the GHG Protocol
Laws and regulations that require companies, both private and public, to disclose their greenhouse gas (GHG) emissions continue to expand in the European Union and in the United States. Under the EU Corporate Sustainability Reporting Directive (CSRD), beginning in 2025, EU-based public companies and large EU-based private companies will be required to report all material Scope 1, 2, and 3 GHG emissions as set forth in the European Sustainability Reporting Standards. In the United States, California recently passed landmark climate-related disclosure legislation that will require U.S. companies that do business in California and have greater than $1 billion in annual revenues to file annual reports publicly disclosing their Scope 1 and 2 GHG emissions beginning in 2026 and Scope 3 GHG emissions in 2027. This legislation is expected to be joined by the U.S. Securities and Exchange Commission’s (SEC) proposed climate-related disclosure rule. Initially proposed in March 2022, if finalized, the SEC rule would require public companies to disclose their Scope 1 and Scope 2 emissions and material Scope 3 emissions. And later this year, world policymakers, activists, and business leaders will convene at COP28 to discuss global progress towards achieving the net-zero GHG emissions targets set by the Paris Agreement.
The Greenhouse Gas Protocol (GHG Protocol) sits at the center of all these efforts. Established by the World Resources Institute and the World Business Counsel for Sustainable Development in 2001, the GHG Protocol establishes comprehensive standards for private and public entities to calculate and report their GHG emissions and track progress towards their emissions targets.
Continue Reading Calculating and Reporting Greenhouse Gas Emissions: A Primer on the GHG Protocol
USDA Releases Carbon Markets Assessment, Setting Stage for Technical Assistance Program
As directed by the Consolidated Appropriations Act of 2023 (CAA) that was signed into law by President Biden on December 29, 2022, on October 23, the U.S. Department of Agriculture (USDA) released the report on its general assessment of the state of the U.S. compliance and voluntary carbon markets for the agricultural and forestry sectors. The report, titled Report to Congress: A General Assessment of the Role of Agriculture and Forestry in U.S. Carbon Markets (Report) provides a summary of the assessment’s findings with respect to the current supply and demand of agriculture and forestry carbon credits in the U.S., as well as the barriers to market entry faced by many agriculture and forestry landowners and operators. The Report also highlights the role that USDA could play in reducing such barriers, notably through a potential GHG Technical Assistance Provider and Third-Party Verification Program (Program). As participants in the voluntary carbon market search for greater certainty regarding the integrity of carbon credits being bought or sold, the Program may become a unique and valued resource for potential project developers and carbon credit buyers.Continue Reading USDA Releases Carbon Markets Assessment, Setting Stage for Technical Assistance Program