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Unleashing the Power of Carbon Solutions at MPGC 2024

Key Takeaways from Our Expert Panel

The 31st Annual Middle East Petroleum & Gas Conference (MPGC) 2024, hosted by the Emirates National Oil Company (ENOC), concluded successfully in Dubai from May 20-22. This iconic event, renowned as the region’s longest-running oil and gas industry gathering, brought together global leaders from NOCs, IOCs, traders, refiners, petrochemical companies, storage firms, financial institutions, and technology companies for a series of high-level discussions and networking opportunities.

One of the standout sessions at MPGC 2024 was the panel discussion titled “Understanding Carbon Markets and Their Role in Commodity Trading.” The session featured a dynamic lineup of industry experts, including Amit Thusu, Senior Director-Climate Action at the Global Carbon Council (GCC).

Panel Highlights and Key Takeaways

The panel, moderated by Deb Ryan, Head of Emissions Insight at S&P Global Commodity Insights, included insights from:

  • Amit Thusu, Senior Director-Climate Action at GCC
  • Michael Curran, Global Head of Carbon, Vitol
  • Naoufal Alami, Head of Commodities and Energy Transition Trading, First Abu Dhabi Bank
Unleashing the Power of Carbon Solutions at MPGC 2024
Unleashing the Power of Carbon Solutions at MPGC 2024

The discussion centered on critical issues impacting carbon markets and their integration into commodity trading. Here are the key takeaways from Amit Thusu, Senior Director-Climate Action at GCC:

In addressing the global challenge of carbon reduction, Amit outlined a stark reality: a yearly reduction of 58 billion tons of greenhouse gases is necessary to meet the Paris Agreement goals. However, the National Determined Contributions (NDCs) submitted by countries fall short of achieving this target, leaving a substantial gap of over 20 billion tons. This underscores the crucial role that Voluntary Carbon Markets (VCM) must play in closing this deficit. Over the past two decades, while the Clean Development Mechanism (CDM) succeeded in reducing emissions by 2.5 billion tons, VCM has achieved less than 1 billion tons. Looking ahead, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) will require an additional 2.4 billion tons over the next 15 years, with an initial demand of 160 million tons in its first phase. Hence, urgent and concerted efforts are imperative to align actions with the objectives of the Paris Agreement.

Highlighting another critical issue, he addressed the persistent challenges of low demand and pricing volatility in carbon markets. These obstacles hinder the development of a robust and appealing market environment for investors and participants alike. However, there is optimism about the increasing involvement of Voluntary Carbon Markets (VCM) in compliance markets such as the Singapore carbon tax. It is hoped that this trend will positively influence market dynamics and lead to an improvement in carbon credit prices.

Addressing the credibility concerns surrounding Voluntary Carbon Markets (VCM) is paramount in ensuring their efficacy and reliability in the carbon trading landscape. His insights shed light on two crucial aspects:

  • Defining Credibility and Quality of Credits: Within the realm of VCM, credibility and quality often intertwine. Quality standards, rooted in established principles dating back to the Kyoto Protocol, encompass program and credit-level requirements. These standards, upheld by bodies such as the CDM-EB, CORSIA, and ICVCM, serve as benchmarks for carbon credit integrity. Recognized standards align with these principles, bolstering buyer confidence. Amit underscores the necessity for robust standards, governance frameworks, and stringent verification processes to safeguard the credibility and reliability of carbon credits.
  • Link between Quality and Carbon Price: Quality and price in VCM are intricately linked, reflecting a fundamental principle of Quality Management. Amit advocates for a correlation between credit prices in VCM and compliance markets, positing that higher prices signify enhanced quality and associated co-benefits. Presently, while current carbon prices in VCM seem appropriate in relation to credit quality, continual improvement is imperative. A unilateral approach is insufficient; Amit asserts that an increase in carbon prices within VCM is essential to incentivize quality enhancements. Nonetheless, acknowledging the subjective nature of credibility based on perception, Amit emphasizes the importance of contextual understanding in evaluating market dynamics.

In summary, addressing credibility concerns demands a multifaceted approach encompassing stringent standards, robust governance, and price-quality alignment within Voluntary Carbon Markets. Amidst evolving market dynamics, continuous evaluation and enhancement of these mechanisms are imperative to foster trust and confidence among stakeholders.

He acknowledged the significant transparency observed on the supply side, encompassing project development and registry operations, with project details readily accessible through platforms such as CADT, CORSIA, ICVCM, and the S&P Global meta registry. However, he conceded that transparency on the demand side, particularly in markets, requires improvement. Over-the-counter (OTC) trades currently dominate, comprising over 90% of transactions, which often lack the transparency inherent in spot or exchange-based trades. This opacity poses challenges, as some corporations prefer to keep their carbon credit transactions private due to concerns over negative publicity. Nevertheless, Amit highlighted the necessity for heightened transparency, particularly regarding corresponding adjustments by host countries under Article 6.2/6.4/CORSIA. Achieving the highest level of transparency is crucial to ensuring the integrity and effectiveness of carbon trading mechanisms and fostering confidence among stakeholders.

Commenting on the regulatory landscape of carbon markets, he notes the existing robust regulations governing the supply side and project development, built upon sound principles established under Article 6.4, CORSIA, and ICVCM. These regulations undergo scrutiny from various stakeholders, including rating agencies, media, and non-governmental organizations (NGOs), ensuring compliance and accountability. However, he acknowledged a lack of comparable regulation on the demand side or within markets, which has prompted initiatives to enhance transparency and oversight. For instance, regulatory bodies such as the Financial Action Task Force (FATF) in the US have begun to address this gap, signaling a shift towards increased regulation. Additionally, the Commodities Futures Trading Commission’s release of proposed guidance in December 2023 for voluntary carbon credit derivative contracts listed on designated contract markets (DCMs) represents a significant step towards regulating the demand side of carbon markets. These developments reflect a growing recognition of the need for comprehensive regulation to safeguard the integrity and stability of carbon trading mechanisms.

It presents a significant barrier to the full engagement of many companies with Voluntary Carbon Markets (VCMs), primarily driven by concerns surrounding credibility and market stability. Establishing trust and transparency within these markets is imperative to encourage broader corporate participation. By addressing these concerns and demonstrating the integrity and reliability of VCMs, stakeholders can foster an environment conducive to increased corporate involvement. This emphasis on trust and transparency is essential for unlocking the full potential of VCMs and advancing collective efforts towards sustainability and climate action.

One of the biggest hurdles discussed was the lack of clarity around Article 6.2 of the Paris Agreement, particularly regarding Letters of Approval (LoA) withdrawal, revocation, and corresponding adjustments. This uncertainty hinders market growth and international cooperation.

Currently, countries look at carbon markets as an economic opportunity, environmental responsibility, policy tool, international cooperation, to address climate change mitigation and adaptation. Currently new trend is emerging, where countries view carbon as a national/sovereign asset and like to have a share e.g. Kenya (30%), Zambia, Zimbabwe (30% of revenues), Ghana (3 USD/ton).

Despite these challenges, he expressed optimism about the future of carbon markets. He called for greater international cooperation, clear regulatory frameworks, and innovative solutions to drive market development. He suggested two key aspects for the path forward: (i) Ensure Certainty to bring liquidity in carbon markets and (ii) Scaling up of VCM is the need of the hour.

Unleashing the Power of Carbon Solutions at MPGC 2024

Audience Engagement

The session saw active participation from over 70 attendees, including industry professionals and stakeholders. The engaging discussion and interactive Q&A session provided valuable insights and fostered a deeper understanding of the role of carbon markets in commodity trading.


The MPGC 2024 provided an excellent platform for thought leaders and industry experts to discuss and address the pressing issues facing carbon markets today. The insights shared by Amit Thusu and the panelists are instrumental in shaping the future of carbon trading and climate action.

At GCC, we are committed to driving innovation and collaboration in carbon markets to achieve a sustainable future. Stay tuned for more updates and insights from our participation in global events like MPGC 2024.

For more information about our initiatives and upcoming events, visit Global Carbon Council (GCC).

Unleashing the Power of Carbon Solutions at MPGC 2024