Decarbonisation Technology - May 2024 Issue

Category of materials

CertifHy UK Low Carbon Hydrogen Certification Scheme (LCHS) TÜV SÜD CMS 77 Standard ASTM International Standards, ASTM D7566 ICAO’s CORSIA Roundtable on Sustainable Biomaterials (RSB) Certification IATA’s Global Framework Standard/certification system/initiative/organisation

Hydrogen

Sustainable aviation fuel (SAF)

Sustainable marine fuels (SMF)

ISCC Certification for SMF Fuel EU Maritime Regulation

Ammonia

Ammonia Energy Association (AEA) TÜV SÜD CMS 77 Standard

Methanol

International Sustainability and Carbon Certification (ISCC) Renewable Fuel Standard (RFS) Low Carbon Fuel Standard (LCFS) European Renewable Energy Directive (RED II) ResponsibleSteel World Steel Association’s Climate Action Program The Green Steel Certification

Steel

Fertilisers

Global GAP The 4R Nutrient Stewardship Organic Certification

Table 1 Standards and certification schemes for leading renewable chemicals and fuels

to encourage a shift towards lower-carbon fuels, energy conservation, and investment in clean energy technologies. Carbon pricing can be implemented through two main mechanisms. First, a carbon tax directly sets a price on carbon by levying a tax on the GHG emissions of fossil fuels. The tax is applied at the point of their extraction or importation, making carbon-intensive energy sources more expensive and thus less attractive compared to low-carbon alternatives. Second, Emissions Trading Systems (ETS), also known as cap-and-trade systems, set a cap on the total allowable level of GHG emissions and enable industries with lower emissions to sell their surplus allowances to larger emitters. This creates a market price for carbon emissions, incentivising reductions where they are most cost-effective. Hybrid systems are a mix of cap-and-trade and carbon taxes, where a price floor (minimum price) and a price ceiling (maximum price) are established. This system provides companies with price stability while ensuring that emission reductions are achieved.

The EU has developed and implemented a Carbon Border Adjustment Mechanism (CBAM) to address carbon emissions associated with imports. The CBAM acts as a duty on imports based on the carbon footprints resulting from the production of the imported products. It is designed to level the playing field for EU producers facing carbon costs under the EU’s ETS by levying a suitable carbon price on imported goods. Starting in 2026 as a pilot implementation, the CBAM will require non-EU companies to pay a levy on some emissions-intensive products by purchasing CBAM certificates, the price of which will be determined by the ETS. Sectors covered in the pilot phase are iron, steel, aluminum, cement, fertilisers, chemicals, polymers, electricity, and energy. Agreed standards, certification systems, and associated programmes are catalysts for facilitating international trade in low or zero- carbon fuels, chemicals, and products like hydrogen, sustainable aviation fuels (SAF), ammonia, methanol, steel, and fertilisers (see Table 1 ). They ensure product quality