India aims to finalize carbon deals with Japan, Singapore – BNN Bloomberg

On November 25, 2024By Pranco

(Bloomberg) — India aims to finalize a potential carbon credit deal with Japan in early 2025 and then advance similar negotiations with countries like South Korea and Singapore

The world’s third-largest emitter of carbon dioxide wants to attract investment and technology that could be deployed on projects that would reduce pollution and provide credits, according to people familiar with the discussions who asked not to be identified as deliberations continue be private.

A bilateral deal with Japan is likely to be signed early next year and India will look to finalize the pacts with South Korea and Singapore before the end of the fiscal year ending March 2026, one of the people said.

Discussions are also taking place about possible future deals with Germany and Sweden.

A spokesperson for India’s ministry of environment, forests and climate change did not respond to a request for comment.

Pacts under Article 6.2 of the Paris Agreement are being discussed, which are intended to facilitate trade between countries and allow countries to use credits towards their climate goals. Negotiators at the COP29 talks in Azerbaijan approved rules to guide the market on Saturday after almost a decade of consultations.

Countries such as Singapore and Switzerland have made agreements before the guidelines were finally drawn up. Agreements between governments to trade emissions reductions exceeded $1 billion at COP29, according to BloombergNEF.

Japan is in talks with India on a bilateral carbon credit deal, the country’s commerce ministry said, without specifying a timeline. The two countries signed an agreement in 2023 to work on building a joint credit mechanism.

Singapore is in discussions with India on a bilateral implementation agreement in line with Article 6.2, the country’s National Climate Secretariat said. South Korea’s Environment Ministry confirmed discussions on a possible memorandum of understanding on carbon credit cooperation.

The German Ministry of Economic Affairs is also in talks with India on a memorandum of understanding, a spokesperson said. “Sweden is in dialogue with many countries” about possible bilateral partnerships, Swedish Energy Agency spokesperson Ola Westberg said, without indicating whether talks are taking place with India.

In some of the talks, India has proposed a joint carbon credit mechanism under which partner countries would provide financing and technology to set up projects. The credits generated would then be shared and the distribution would vary depending on developments, the people said.

Officials in India have previously identified 13 types of activities eligible for bilateral carbon trading, including green hydrogen, sustainable aviation fuel and high-voltage direct current transmission.

–With help from Shoko Oda, Ishika Mookerjee, Heesu Lee, Petra Sorge and Charles Daly.