ESG (1)

COP26 – what’s your corporate ESG plan for 2030, what can you do now to help meet ‘net zero’?

23rd November 2021

COP26 has now concluded a week ago, many are divided on its accomplishments. Let’s focus on the positive outcomes:

1) 1.5 deg C is still achievable, just... 6 years ago the Paris Agreement was signed by 195 countries. Therefore agreeing to reduce global warming to ‘well below 2 deg C’ by the end of this century, 2100. Currently, the planet is on track to hit 2.4 deg C warming over pre-industrial times; importantly this is down from a 3.5 deg C projection at the time of the Paris Agreement. But admittedly there’s room for real improvement.

2) COP26 wording requests tougher emissions caps (via a binding country ‘NDC’) at COP27 in Nov 2022, it’s critical that all countries continue to ratchet their ambitions.

3) COP26 momentum is clear, they spelled-out that a 45% reduction in global emissions is needed by 2030, verses 2010 levels.  

4) A doubling in financial support for low-income countries to implement climate-change plans.

5) Coal and fossil-fuel subsidies will be ‘phased down', India requested ‘phased-out’ to be replaced. These new references are still a climate-summit first in its 26 year lifespan. Irrespective of whether this is a divisive change in the original wording, this is still a clear statement which will divert investment flows.

6) UN climate summits are excellent, but the real change occurs as individuals cast green-votes at the ballot box to further influence local climate policy, make the vote count - its all about local leaders driving a strong NDC.

7) Article 6 and other elements of Paris Agreement rules are now at last agreed upon. Including the much-maligned, but in fact critical, carbon markets. Which had remained unresolved for the last 6 years.

8) Stopping deforestation by 2030 covering 85% of the world’s forests.

9) Methane emissions to reduce by 30% by 2030, the US published its blueprint to meet the goal.

10) India, 4th largest emitter, will meet net-zero by 2070

In direct response to COP26 the carbon price for compliance and voluntary markets has substantially increased, impacting airlines, refineries, and other carbon regulated industries, but also non-regulated corporations that wish to better plan their 2050 net-zero pathway. Ultimately all corporates will have exposure to carbon commodity price in some way shape of form. 

Pricing of both voluntary carbon (13.75 USD/mt for CME’s CBL Nature-based NGEO) and compliance carbon (Dec21 at 70 USD/mt) increased in response to COP26, see below the graph of offset carbon from October to date.

CBL Image

How can Onyx’ help refineries, oil consumers (shipping, aviation, transport), and producers? 

Onyx can help you forge your ESG strategy,  including selecting offset projects, quantifying and listing forest projects with the recognised registries, compliance carbon, hedging carbon market risk, investing in carbon (compliance and voluntary) and finding innovate financing for the strategy. Also considering immediate alternatives to diesel and jet fuel, so companies can make a difference today – sustainable paraffinic fuels for hard to abate industries such as multi-modal transportation, distribution and manufacturing.