The Voluntary Carbon Market: What is the Role of the Energy Transition Accelerator?

New policy paper analyses the ETA against the background of current developments on the voluntary carbon market

  • News 15.01.2025

In order to combat climate change and achieve the goals of the Paris Agreement, the mobilisation of financial resources from the private sector is crucial. The demand for carbon credits on the voluntary carbon market (VCM), which contribute to the financing of climate protection measures, plays a central role here. Against this backdrop, the Energy Transition Accelerator (ETA) was launched as a public-private initiative to foster the decarbonisation of the energy sector in developing countries. Sectoral crediting is  intended to incentivise the expansion of renewable energies, the decommissioning of coal-fired power plants and the improvement of the electricity grid infrastructure.

In the policy paper "The Energy Transition Accelerator – Using carbon crediting to foster sectoral transformation", Nicolas Kreibich, Senior Researcher in the International Climate Policy Research Unit at the Wuppertal Institute, analyses the current developments of the ETA and the associated impacts on the voluntary carbon market. The paper examines key elements of the sectoral crediting system of the ETA and the proposed use cases of ETA credits.

The paper concludes that the ETA can contribute to sectoral transformation by focussing on the electricity sector – however, challenges remain in terms of environmental integrity and compatibility with the requirements of the Paris Agreement. Critically, the proposed voluntary offsetting options for companies do not comply with current best practices or European regulations and could weaken the decarbonisation of supply chains. Nicolas Kreibich recommends to limit the use of ETA credits to use cases that allow companies to support beyond value chain mitigation while at the same time incentivising companies to reduce their own emissions.

The Carbon Mechanisms Research Policy Paper "The Energy Transition Accelerator – Using carbon crediting to foster sectoral transformation" has been published in English and is available via the following link.


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