Key headlines from January - EU's 2040 targets and more
Monthly newsletter on news from the new forest economy
Welcome to Arbonics’ monthly roundup of news relevant to forests, the voluntary carbon markets, and climate solutions more broadly. Bringing you the latest that catches our eye - as well as our own take on the news.
EU seeks a 90% reduction in GHG emissions by 2040 including carbon removals for up to 10% of the target
The EU has been busy at work on 2040 targets, which provide a middle point for already announced plans to cut net emissions 55% by 2030 and reach net zero emissions by 2050. These figures have been leaked ahead of the draft proposal, which will be presented on the 6th February and will need to be approved by EU members.
💡 Arbonics’ take
It’s great to see big ambitions from the EU and including removals within reduction target is also a positive sign. We look forward to the official text to be published in February with more details, including what type of removals are considered as part of that target.
Analysts lower ETS carbon price forecasts and release new forecasts for 2024 and 2025
Analysts have slashed EU’s Emissions Trading System’s (ETS) carbon price forecasts for 2024 by 20%, citing weak demand and increase in supply:
Increased renewable energy production in Europe has led to a lower need for permits by thermal power plants.
Additionally, analysts note that a change in the deadline for compliance is likely to defer some demand to later in the year.
ETS includes manufacturers, power companies and airlines to buy permits for each tonne of CO2 they emit.
New forecast price is €74/tonne in 2024 and €83/tonne in 2025.
💡 Arbonics’ take
It’s important to note that ETS carbon price has maintained historically high, and that the ETS carbon price is different to the voluntary carbon credit prices as the markets are different. Read more about the differences as well as how price is determined here:
The European Investment Bank (EIB) invested a record €49B in green finance in 2023
The EIB announced their 2023 investments over half of which invested into green finance and they are on track for €1 trillion of green spending by the end of the decade. Eligible sectors include climate change mitigation, adaption and environmental sustainability. The investment included more than €21 billion as part of REPowerEU initiative, which aims to support the green energy transition and reduce Europe’s dependence of fossil fuels.
💡 Arbonics’ take
Growth in green investments is further evidence for EU’s commitment to planet-positive policies. A continuing trend in this direction is likely to incentivise more green innovation and drive positive change. All in all, we consider this a good sign for the future of the European green sector.
US-based carbon credit broker Aspiration is under investigation by the Justice Department and Commodity Futures Trading Commission (CFTC)
The company is in trouble over concerns regarding the quality of its carbon credits and potential misleading claims. This scrutiny comes during a challenging period for Aspiration, which in the past saw high-profile investment from celebrities like Leonardo DiCaprio and Robert Downey Jr. The company's difficulties were compounded by the departure of its most recent CEO in October and the layoff of 180 employees last year.
💡 Arbonics’ take
Not a happy story but highlights the increased scrutiny in the carbon markets, as well as why transparency and science based action is vital to any player looking to participate in the carbon markets.
IKEA have reduced their Scope 1, 2 and 3 emissions whilst growing the business
The significant reduction in its climate footprint comes from adopting carbon-saving measures like electric vehicles, renewable electricity use, and improved energy efficiency. Since 2016, as part of its transformation, it has boosted its offsite renewable energy investments by €700 million, reaching a total of €3.8 billion since 2009.
💡 Arbonics’ take
It’s great to see companies leading the way and show that reducing emissions can not just be done but also is good for business.
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