Emissions & Carbon Trading Global Law Firm

Carbon trading is a market-based system aimed at reducing greenhouse gases that contribute to global warming, particularly carbon dioxide emitted by burning fossil fuels.

Carbon trading can be: (i) regulatory or compliance emissions trading markets where emission allowances are required to satisfy regulatory 'cap and trade' obligations, thereby encouraging reductions in emissions, or (ii) on voluntary carbon markets where voluntary credits are issued by accredited projects producing reductions in or avoidance of emissions.

We advise clients in all aspects of regulatory and voluntary carbon market trading, regulatory requirements of trading schemes and investments into carbon reduction projects and project developers.

We act for a wide variety of project developers and investors, financial participants and corporates.

Our deep bench expertise covers advising on:

net zero and other targets, and how to build carbon offsetting into target implementation.
assistance on selecting offset partners.
structuring of purchases/purchasing arrangements and documenting transfers of credits to ensure ready supply of offsets and risk mitigation.
establishment of standalone projects for offset purchases, and minority investments in project companies/developers, including all necessary documentation.
legal due diligence on offset projects.
trading allowances, credits and environmental attributes on the regulated markets.
carbon reduction obligations for operators under emissions trading schemes.
establishment of carbon trading platforms and carbon exchanges.
all aspects of carbon finance including derivative products and securitization, and carbon funds.
disputes involving carbon credits.

Recent client highlights

World first plastic and carbon credit-linked bond: Advised Citigroup Global Markets Limited as arranger of the first bond for which interest amounts are linked to, and contingent upon, the generation of plastic waste collection credits and plastic waste recycling credits, issued by the IBRD. A portion of interest on the bond is also linked to, and contingent upon, the generation of VCUs.
Carbon offset project loan: Advised Asian Development Bank on the US$6.5 million financing of Greenway Grameen Infra's carbon offset project in India, involving the production and distribution of one million improved cookstoves to rural households in Madhya Pradesh and Odisha states.
World's largest biochar carbon removal project: Advised Biocare Projects on its long-term carbon removal project with ASX-listed timber company Kiland Limited.

Carbon offsetting arrangements: Advised easyJet on carbon offsetting agreements in relation to its commitment to offset the carbon from all domestic and international flights.
EU Emissions Trading System: Advised RWE, easyJet, Administrators for British Steel and Administrators for Calon Energy on the EU Emissions Trading System.
Voluntary credits: Advised a sovereign wealth fund on purchasing voluntary credits to offset emissions.
Global carbon commodities exchange platform: Advised Xpansiv on Blackstone's US$400 million investment in its global carbon and environmental commodities exchange platform. Xpansiv provides market data for carbon offsets.

Forestry project, DRC: Advised a sovereign wealth fund and Macquarie on their potential investment in a forestry project in the DRC including the due diligence of the project.
Natural capital investment, UK: Advised Pollination Climate Asset Management (CAM) on the setup of its debut fund for investment in Natural Capital Projects and related carbon agreements.
Forestry investments, Germany: Advised global car manufacturers on investments in forestry projects and an investment in an offsetting developer including due diligence.

Scaling the global carbon markets: a way forward for the VCM and Paris Mechanisms

At COP29, the global community is meeting in the hope of driving critical progress on climate commitments. Against this backdrop, our London Environment Group has launched a new report which explores recent developments concerning the Paris mechanisms and the VCM and makes recommendations for actions that need to be taken if they are to reach their full capabilities.

Singapore carbon initiatives: The Carbon Tax and the Eligibility List

Singapore's eligibility list for international carbon credits (ICCs), published shortly after the announcement of its successful Article 6 Paris Agreement collaborations with Papua New Guinea, is expected to be extended over time – most recently, to reflect further collaborations with Ghana. In this briefing we take a closer look at Singapore's ICC Framework and eligibility list which provide opportunities for businesses wishing to offset carbon tax liabilities.

Find out more about Singapore carbon initiatives: The Carbon Tax and the Eligibility List

Singapore carbon initiatives: Introduction to carbon markets

Interest in carbon markets is growing across the globe. Singapore has led the way in carbon regulation in South-East Asia and has been proactive in seeking opportunities for international collaboration. In this briefing, we explore the different forms of carbon market – regulated, voluntary and hybrid, and consider the opportunities available to participants in Singapore.

Find out more about Singapore carbon initiatives: Introduction to carbon markets

UK VAT treatment of voluntary carbon credits

HMRC has published new guidance on the VAT treatment of voluntary carbon credits, correcting the anomalous distinction between voluntary and compliance market credits. From 1 September 2024, voluntary carbon credits will generally be subject to VAT.

Find out more about UK VAT treatment of voluntary carbon credits

UK Government consultation on the design of the UK Carbon Border Adjustment Mechanism

The UK Government has published proposals for a UK Carbon Border Adjustment Mechanism (CBAM) to deal with carbon leakage while the UK decarbonises. The proposals have similarities to the EU CBAM but there are some key differences. This briefing explores the UK proposals which are subject to consultation, and some of those differences.

Find out more about UK Government consultation on the design of the UK Carbon Border Adjustment Mechanism

Carbon Trading in China: Relaunch of the Certified Emission Reduction Scheme

On 22 January 2024, China officially relaunched the China Certified Emission Reduction (CCER) scheme, which is a milestone step in establishing the voluntary carbon market in China (the National CCER Scheme). The framework of the voluntary standard applicable under this scheme is similar to other internationally recognised voluntary standards (such as Verra and Gold Standard), whilst the implementation details are subject to PRC specific regulatory requirements.

Find out more about Carbon Trading in China: Relaunch of the Certified Emission Reduction Scheme

What happened at COP28 - the UAE consensus

Following intense negotiations, COP28 has ended in a package deal which is being referred to as the "UAE Consensus". Clifford Chance hosted a webinar on 19 December outlining what happened at COP28 drawing out key outcomes from the negotiations and the many announcements and commitments made in and around COP28, focussing on implications for businesses. Here are some of the highlights of the "UAE Consensus" and other commitments made in and around COP28.

Find out more about What happened at COP28 - the UAE consensus

Energy Transition TV: What's on the horizon for Carbon Trading?

Dr. Mathias Elspass outlines why carbon trading will take centre stage.

Watch more