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The Role of Carbon Credits in Scaling Up Innovative Clean Energy Technologies

The Role of Carbon Credits in Scaling Up Innovative Clean Energy Technologies

Full Title: The Role of Carbon Credits in Scaling Up Innovative Clean Energy Technologies
Author(s): International Energy Agency
Publisher(s): International Energy Agency
Publication Date: May 9, 2024
Full Text: Download Resource
Description (excerpt):

Achieving net zero requires rapid development of technologies such as low-emissions hydrogen, sustainable aviation fuels (SAF), and direct air capture and storage (DACS). The IEA and GenZero report explores how carbon credits can incentivise their deployment.

Massive scaling-up is needed: low-emissions hydrogen production needs to jump from almost zero today to 70 million tonnes by 2030; SAF’s share of final energy consumption in aviation needs to rise from close to zero today to around 11% by 2030; and annual removals of CO2 via DACS need to reach almost 70 Mt CO2 in 2030, from almost zero today.

Investment must also increase dramatically. Governments can unlock investment through a mix of policies and financing instruments. Carbon credits can play an important role, especially in attracting private capital and accelerating technology adoption.

Carbon credits cannot bridge the investment gap on their own, and governments and the private sector need to develop strategies to create the right enabling environment for investments. Moreover, the current low availability of crediting methodologies hinders the generation of carbon credits from low-emissions hydrogen, SAF and DACS, but the landscape is shifting. A coalition of stakeholders should develop clear guidance on emissions accounting, and efforts to get better data on emissions are necessary to provide the foundation for such guidance.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of OurEnergyPolicy.org, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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