Developments in law and policy of energy, commodities and environment
What You Need to Know.
Continue Reading COP28 Day 4 Recap: The First COP Health Day
On September 13, 2023, the California Legislature passed Assembly Bill 1305 (AB 1305), which imposes wide-ranging disclosure requirements on (1) entities that market or sell voluntary carbon offsets and (2) entities that purchase and rely on these offsets to advertise their climate goals. The bill has been enrolled and is currently on Governor Newsom’s desk.
AB 1305 comes on the heels of escalating criticism of voluntary carbon offsets, including arguments that corporations use low-quality offsets to engage in greenwashing. AB 1305 is likely to prompt companies to engage in careful due diligence before making climate-related claims and to ensure that they rely on high-quality offsets that correspond to real emission reductions or removals.Continue Reading Law Enacted by California Legislature Would Require Companies to Disclose Key Details About Voluntary Carbon Offsets and Claims Made in Reliance Upon Them
On March 30, the Integrity Council for Voluntary Carbon Markets (ICVCM), an independent governance body that aims to set and maintain a global standard for quality in the voluntary carbon market, announced the launch of its Core Carbon Principles. The Core Carbon Principles (CCPs) are intended to establish fundamental principles for high-quality carbon credits that create a verifiable climate impact, based on the latest science and best practice. On the same day, ICVCM also issued the Program-level Assessment Framework and the Assessment Procedures, both designed to assist carbon-crediting programs in verifying that such programs and the credits that they issue comply with the CCPs. Given the role that ICVCM has assumed in recent discussions concerning integrity in the voluntary carbon market (VCM), the CCPs and related Program-level Assessment Framework and Assessment Procedures are likely to draw significant attention from stakeholders at all stages of the VCM-supply chain. Continue Reading ICVCM Launches Core Carbon Principles for Voluntary Carbon Market
The European Union (“EU”) is coming closer to adopting mandatory rules for companies that use carbon credits.
These two regulatory initiatives are closely tied to each other. In effect, the draft ESRS that the Commission is considering for adoption require subject entities to disclose GHG removals and GHG mitigation projects financed through carbon credits.
The EU’s aim of regulating carbon credits coincides with its push for carbon neutrality by 2050, and a related significant proliferation of companies publicly committing to achieve “net-zero” emissions by mid-century, which has triggered an uptick in strategic purchases of carbon credits in the voluntary carbon market (“VCM”). The CRCF Regulation Proposal and the upcoming ESRS will help to expand sustainable and verified carbon removals and encourage investment in technological innovation.
Companies turning to the VCM to reach their net zero goals, and others active in the generation, trading, and use of carbon credits, will want to follow these initiatives closely. Opportunities remain for companies to express views that may shape the final contours of these regulations.Continue Reading The EU’s Emerging Mandatory Disclosure and Certification Rules for Carbon Credits
The European Commission is expected to present a Proposal for a Directive on Green Claims (“Proposed Green Claims Directive” or “the Proposal”) within the next few months. Together with the Proposal for a Directive empowering consumers for the green transition through better protection against unfair practices and better information (“Consumer Empowerment Directive Proposal”), the Proposed Green Claims Directive would contribute to the EU’s green transition towards a circular, climate-neutral and clean economy by creating a common methodology for the substantiation of green claims that concern the environmental footprint of products, services and companies. It would aim to reduce greenwashing and enable consumers to take informed purchasing decisions based on reliable information about the sustainability of products and traders.
If adopted, it is likely to significantly limit the environmental claims that businesses can make in the EU/EEA. Businesses may want to consider approaching the Commission to try to influence the final legislative proposal that it is expected to present by March 2023. Once the Commission presents its legislative proposal, businesses should consider proposing amendments to the European Parliament and Council. Continue Reading Upcoming EU Rules on Green Claims
As noted in our COP27 recap, this year’s climate summit in Sharm el-Sheik involved both the historic creation of a fund to compensate countries most impacted by climate change, as well as lost opportunities to adopt more ambitious and accelerated climate mitigation commitments. Perhaps hidden between these headlines, President Biden announced an initiative with significant implications for federal contractors. Under this proposal, the United States would become the first country to require major government suppliers and contractors to set science-based emissions reduction targets aligned with the Paris Agreement. It would also require contractors to disclose their greenhouse gas (GHG) emissions and climate risks.
This initiative—the proposed Federal Supplier Climate Risks and Resilience Rule—would have wide-reaching impacts if ultimately finalized. Collectively, the proposed rule would cover about 86 percent of the federal government’s supply chain GHG impacts and 86 percent of federal annual spending. To put this in perspective, in the last fiscal year alone the United States purchased $630 billion in goods and services.
The comment period for the proposed Federal Supplier Climate Risks and Resilience Rule closes on January 13, 2023. The proposed compliance requirements for major contractors would start two years after publication of a final rule. If promulgated, this rule may be challenged in court along the lines of the Biden Administration’s COVID-19 vaccine mandate for federal contractors. Continue Reading US Government Proposes Rule Requiring Major Federal Contractors to Disclose Greenhouse Gas Emissions and Establish Science-Based Emissions Reduction Targets
Yesterday, November 8th, was the second day of the ‘High Level Segment for Heads of State and Government’ with a focus on their speeches and declarations. The real business of COP will begin in earnest today when most of the senior politicians have departed.
Financing for Climate Loss and Damage in Vulnerable Countries
Climate loss and damage is quickly emerging as the key point of contention at this COP and foreshadows a more tense meeting than last year’s in Glasgow. This issue has been moving up the agenda and recent extreme climate events have increased the perceived urgency around this topic, particularly for vulnerable countries. Continue Reading Highlights from COP 27: Financing Takes Center Stage
Addressing climate change has been a priority for President Biden since his first day in office. On December 8, 2021, President Biden continued that focus by issuing Executive Order (EO) 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, which includes a number of requirements directed at introducing sustainability to federal acquisitions.
Continue Reading Contractors Have an Opportunity to Help Shape ESG Requirements
As the United Nations Climate Change Conference of the Parties (“COP”) in Glasgow has drawn to a close, with seemingly mixed messages and a somewhat ambiguous conclusion, it is worth reflecting on the overall trajectory of the climate issue, societal expectations, and the accomplishments that — with time — Glasgow is likely to represent. COP26 highlighted the fragility of the planet, as well as the fragility of the global consensus-based United Nations approach to protecting it. It highlighted the sweep of global climate-induced challenges and the scale of transformation needed to address them. With rising temperatures has come a rising global focus on climate and a far greater set of emerging societal expectations for meaningful responses by government and the private sector. Despite the risk that the global agreement forged in Glasgow is seen by climate activists as all talk and no action — what they referred to as “blah, blah, blah” — I believe that a number of features will endure as important accomplishments.
Continue Reading Report from Glasgow COP26: Assessing the United Nations Climate Conference
On the 10th of November 2021, the Scottish Government published its Draft Hydrogen Action Plan (the “Plan”), as a companion document to its December 2020 Hydrogen Policy Statement.
The Plan sets out the Scottish Government’s detailed proposals for the Hydrogen industry in Scotland across the next five years. The aim is for Scotland to have capacity to produce 5 GW of Hydrogen by 2030 and 25 GW of Hydrogen by 2045. This blog sets out the key takeaways from the Plan.Continue Reading The Scottish Government’s Draft Hydrogen Action Plan
