Carbon markets
Overview
Carbon markets are developing as a crucial economic lever in the challenge of reversing the accumulation of greenhouse gases in the Earth’s atmosphere, while CO2 remains a key factor in a range of industrial sectors.
National governments are embracing carbon markets, with a proliferation of carbon pricing policies worldwide. The private sector is channelling finance into projects that generate carbon emissions reductions and removals to mitigate their hard-to-abate emissions.
And the United Nations is making progress in building a global marketplace for carbon emissions reductions that will facilitate nations’ attempts to meet their obligations under the Paris Agreement.
Industrial sectors remain a key source of CO2 emissions and consumption, with innovation looking towards sustainable methods of production and utilisation.
Argus is setting the stage for an extended period of growth, evolution and interconnection of carbon market participants and initiatives.
Latest carbon markets news
Browse the latest market moving news on carbon markets.
IMO incentive to shape bio-bunker choices: Correction
IMO incentive to shape bio-bunker choices: Correction
Corrects B30 pricing in paragraph 5. New York, 21 April (Argus) — An International Maritime Organization (IMO) proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward. The price of these credits will help determine whether B30 or B100 becomes the preferred bio-bunker fuel for vessels not powered by LNG or methanol. It will also influence whether biofuel adoption is accelerated or delayed beyond 2032. At the conclusion of its meeting earlier this month the IMO proposed a dual-incentive mechanism to curb marine GHG emissions starting in 2028. The system combines penalties for non-compliance with financial incentives for over-compliance, aiming to shift ship owner behavior through both "stick" and "carrot" measures. As the "carrot", ship owners whose emissions fall below the IMO's stricter compliance target will receive surplus credits, which can be traded on the open market. The "stick" will introduce a two-tier penalty system. If emissions fall between the base and direct GHG emissions tiers, vessel operators will pay a fixed penalty of $100/t CO2-equivalent. Ship owners whose emissions exceed the looser, tier 2, base target will incur a penalty of $380/t CO2e. Both tiers tighten annually through 2035. The overcompliance credits will be traded on the open market. It is unlikely that they will exceed the cost of the tier 2 penalty of $380/t CO2e. Argus modeled two surplus credit price scenarios — $70/t and $250/t CO2e — to assess their impact on bunker fuel economics. Assessments from 10-17 April showed Singapore very low-sulphur fuel oil (VLSFO) at $481/t, Singapore B30 at $740/t, and Chinese used cooking oil methyl ester (Ucome), or B100, at $1,143/t (see charts). If the outright prices remain flat, in both scenarios, VLSFO would incur tier 1 and tier 2 penalties, raising its effective cost to around $563/t in 2028. B30 in both scenarios would receive credits putting its price at $653/t and $715/t respectively. In the high surplus credit scenario, B100 would earn roughly $580/t in credits, bringing its net cost to about $563/t, on par with VLSFO, and more competitive than B30. In the low surplus credit scenario, B100 would earn just $162/t in credits, lowering its cost to approximately $980/t, well above VLSFO. At these spot prices, and $250/t CO2e surplus credit, B100 would remain the cheapest fuel option through 2035. At $70/t CO2e surplus credit, B30 becomes cost-competitive with VLSFO only after 2032. Ultimately, the market value of IMO over-compliance credits will be a major factor in determining the timing and extent of global biofuel adoption in the marine sector. By Stefka Wechsler Scenario 1, $70/t surplus credit $/t Scenario 2, $250/t surplus credit $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Washington seeks input on GHG market changes
Washington seeks input on GHG market changes
Houston, 21 April (Argus) — Washington regulators are moving forward with a slew of potential changes to the state's "cap-and-invest" program through a pair of draft rules, despite ongoing uncertainty around new program mechanics under discussion in the California-Quebec carbon market. The Department of Ecology opened public comment for the two draft rules on 16 April for the revised carbon market linkage rulemaking it kicked off in March . The draft language builds on changes required by SB 6058 , which lawmakers passed last year at the request of Ecology, to smooth out any incompatibility between the state's program and the larger California-Quebec market, known as the Western Climate Initiative (WCI). In line with legislation, the agency is proposing to shift the program's greenhouse gas (GHG) emissions exemption for biomass-derived fuels to 35pc lower lifecycle emissions — down from 40pc — than the comparable petroleum fuels, allow the use of another jurisdiction's carbon offsets issued after July 2019 for compliance, and lower the allowance holding limits for general participants in a linked market. Ecology is proposing other changes required by the law, such as accounting for emissions from imported electricity. Changes Ecology is proposing that are not required by SB 6058 include accounting for the combined total allowances between all three jurisdictions in the program's holding limit formulas and adding quarterly future vintage allowance auctions in line with the WCI. Ecology began pursuit of linking with the WCI in 2023 , the first year of the Washington's program. While the agency continues to move forward on linkage-related due diligence required by state law, some program changes needed to join the WCI market, such as aligning program compliance periods and corporate affiliation group disclosures, must wait for guidance from California and Quebec. Ongoing work by the current WCI members to update their respective regulations has run into a series of delays . One potential change California Air Resources Board staff floated in April 2024 is aligning the end of each compliance cycle with the program's emissions reduction targets in 2030, 2035, 2040 and 2045, rather than the current three-year compliance cycle. But the agency has largely been silent on the issue since, including in its most recent market notice on planned changes in October 2024. Washington's "cap-and-invest" program aims to cut GHG emissions by 45pc by 2030, compared with 1990 levels, and to achieve net-zero emissions by 2050. The program covers industrial facilities, natural gas suppliers, power plants and other fuel suppliers with GHG emissions of at least 25,000 t/yr. Ecology is requesting public comment on the draft language through 16 May. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Japan’s Revo launches SAF, biodiesel plant in Aichi
Japan’s Revo launches SAF, biodiesel plant in Aichi
Tokyo, 21 April (Argus) — Japanese biodiesel producer Revo International has launched a plant in the Aichi prefecture, central Japan, to produce sustainable aviation fuel (SAF) and biodiesel. This is the company's first SAF plant but its second biodiesel plant, Revo said. The firm already has a biodiesel plant in Kyoto, western Japan. Revo held an opening ceremony at the Aichi plant on 18 April. The plant has a production capacity of 30,000 litres/d for biodiesel, and can process 600 l/d of used cooking oil (UCO) as feedstock to make SAF. The plant can produce SAF at low pressure and temperature, Revo's president Tetsuya Koshikawa said at the ceremony. This helps to save energy consumption during SAF production, which results in a lower production cost, the firm explains. Revo hopes to supply the produced SAF to planes at Chubu International Airport, near the Aichi plant. The company has applied for international certifications on SAF including the UN's Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) and the American Society for Testing and Materials (ASTM) standards, and expects to be certified in the 2025 fiscal year starting from April. Revo also joined Japan's first large-scale domestic SAF production venture Saffaire Sky Energy, jointly funded by Japanese refiner Cosmo Oil, engineering firm JGC and Revo. Saffaire has a SAF plant at Cosmo's Sakai refinery, Osaka, and started delivering its SAF in this April. In the venture, Revo takes charge of collecting UCO as feedstock for SAF. The companies have announced the plans to start delivering Saffaire's SAF to domestic airlines Japan Airlines (JAL) and All Nippon Airways (ANA), the US' Delta Air Lines , Finnish airline Finnair and German logistics group DHL Express in the 2025 fiscal year. Cosmo group will also deliver Saffaire's SAF to Taiwanese airline Starlux Airlines in the 2025 fiscal year at Kobe airport, western Japan, Cosmo and JGC announced on 18 April. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Vietnam's wood pellet exports rise on year in January
Vietnam's wood pellet exports rise on year in January
Singapore, 21 April (Argus) — Vietnamese wood pellet exports rose on the year in January, because of more demand from South Korea and Japan. Vietnam exported 596,000t of wood pellets in January, up by 17pc from the previous year's 507,000t, but fell by 7.3pc from a month earlier, according to customs data. The year-on-year increase in exports was because of strong demand for pellets from South Korean end-users, following a change in state subsidies for biomass-fired generators . Higher buying interest from Japan, given new biomass power plants starting up or coming on line in early 2025, also contributed to the rise in exports. The month-on-month decrease in exports was because of a lack of trading activity during Vietnam's nine-day Tet holiday from 25 January to 2 February. Vietnamese wood pellet shipments to Japan stood at 385,000t in January, up by 72pc from a year earlier, but down by 10pc from December 2024. It accounted for 65pc of the country's wood pellet exports in January. South Korea was Vietnam's second-largest buyer of wood pellets, accounting for 28pc of the country's wood pellet exports in January. Vietnam exported 166,000t to South Korea in January, up by 1.5pc from a year earlier, but down by 18pc from December 2024. There were 31,800t of wood pellets exported to France in January, down by 49pc from a year earlier, with no volumes shipped in December. By Joshua Sim Vietnam's wood pellet exports in January 2025 t Quantity on month (%) on year (%) Japan 385,335 -10.1 72.1 South Korea 166,187 -17.5 1.5 France 31,750 N/A -48.9 Total 595,956 -7.3 17.4 Source: Customs data Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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