COP28 Latest: More Than $1 Billion in Grants to Slash Methane

(Bloomberg) -- Vice President Kamala Harris touted a pledge by the US to contribute $3 billion toward a United Nations fund meant to help developing countries slash greenhouse gas emissions and adapt to climate change at the COP28 summit on Saturday. The EU will invest €2.3 billion ($2.5 billion) in the energy transition over two years.

COP28 President Sultan Al Jaber launched a pact to cut methane emissions from the oil and gas sector at United Nations climate talks in Dubai on Saturday. Exxon Mobil Corp. and Saudi Arabia’s Aramco are among the 50 producers that have signed up. Another program will support companies that make highly polluting products whose emissions are hard to cut, such as cement and steel.

The United Arab Emirates said it would contribute $100 million to a World Bank fund for grants to spur methane work by national oil companies in developing countries. John Kerry, the US representative, said more than $1 billion has been raised to help cut methane since COP27. Here’s a rundown of developments so far today.

$1 Billion in Grants Raised for Slashing Methane

Kerry said that over $1 billion in grant financing has been raised by the US, EU and philanthropic donations to help slash methane emissions. The money will go in particular to low and middle-income countries. Equinor, Total, BP, Shell, Eni and Occidental Petroleum each pledged $25 million to help the effort and provide technical assistance.

“It will leverage billions more in project investment,” the US climate envoy said. “We will continue to add to this effort.”

UAE Pledges $100 Million to World Bank Fund

COP28 President Sultan Al Jaber said his country would contribute $100 million to a World Bank fund to help cut methane emissions. He also called for stronger, economy-wide national targets to cut emissions.

US Announces $568 Million of Cheaper Financing

The US will provide the concessional finance to help build clean energy supply chains globally, Vice President Kamala Harris said. “The urgency of this moment is clear,” she said. “The clock is no longer just ticking, it’s banging. We must make up for lost time.”

EU to Invest €2.3 Billion for Energy Transition Globally

European Commission President Ursula von der Leyen announced that the bloc will invest €2.3 billion over two years from its common budget in neighboring countries and across the world to support the energy transition. 

It came as she lauded the commitment of more than 110 countries to triple renewables and double energy efficiency by the end of the decade — and to track progress in meeting it. The pledge should also be reflected in the final COP28 outcome, she added. It is an essential contribution to phase out fossil fuels in the world’s energy mix,” she said. “We need to unlock the necessary financial support for countries that need it.”

Heavy Industry Gets Support from UN

The Industrial Transition Accelerator aims to “catalyse decarbonization” for energy, industrial, transportation and other polluting companies by supporting projects needed to cut emissions.

Heavy-emitting industries “are currently in transition traps,” said Mark Carney, the UN Secretary-General’s Special Envoy for Climate Action and co-chair of the Glasgow Financial Alliance for Net Zero. “They know what they need to do but struggle to get the investment they need to meaningfully cut emissions.”

Carney announced the launch of ITA with COP28 President Sultan Al Jaber, UN Climate Change Executive Secretary Simon Stiell and Michael R. Bloomberg, the founder of Bloomberg News parent Bloomberg LP, who also serves as UN Secretary-General’s Special Envoy on Climate Ambition and Solutions. 

The initiative is backed by $30 million from Bloomberg Philanthropies. Carney, in addition to his role at the UN, is the chair of Bloomberg Inc.

Exxon Among 50 Oil Producers Pledging Emissions Cuts at COP28

Exxon Mobil Corp. and Saudi Arabia’s Aramco, the world’s largest private and state-sector oil companies, led a pledge by 50 oil and gas producers at the COP28 climate summit to cut emissions from their own operations. 

The deal will be controversial given none of the companies are agreeing to reduce oil and gas production. But they will pledge to stem releases of methane, one of the most dangerous greenhouse gases, to near zero by 2030 and stop routine flaring of natural gas.

World Needs a Standard for Green Products, China’s Climate Envoy Says

China’s climate change envoy, Xie Zhenhua, said there should be a unified standard on what green, low carbon products are to ease trade restrictions between countries. Xie spoke on a trade policy panel hosed by the World Trade Organization in Dubai during the COP28 summit.

The European Union recently introduced a system to put a levy on carbon intensive goods entering the bloc — a move that triggered a hostile reaction from some trading partners, including China.

Xie said developing nations need help participating in the global trade of low carbon products, and proposed richer nations should provide financial and technical supports to improve their capabilities.

Xie also noted that opening up trade can help lower global emissions by increasing availability of cleaner energy supplies. “China has managed to lower the costs of wind power products by 80% and the costs of solar power by 90% in the past years,” he said. “These products could only be circulated in the global market [because of] cooperation among countries.”

US Confirms $3 Billion Contribution for Green Climate Fund

US Vice President Kamala Harris reaffirmed the US’s pledge to contribute $3 billion to the Green Climate Fund and said the US is on track to meet President Joe Biden’s goal of delivering $11 billion in climate finance by 2024.

“Our action collectively, or worse, our inaction, will impact billions of people for decades to come,” she said. “Around the world there are those who seek to slow or stop our progress leaders who deny climate science, delay climate action and spread misinformation.”

Harris also cited corporate greenwashing and lobbying for fossil fuel subsidies as roadblocks to progress. “In the face of their resistance, in the context of this moment, we must do more,” she said.

EIB Backs EU Wind Sector with €5 Billion of Guarantees

The European Investment Bank plans to unlock the money in tranches, starting with €1.5 billion ($1.63 billion) before the end of the year assuming the program is approved by the institution’s board on Dec. 13, Jean-Christophe Laloux, head of operations at Luxembourg-based EIB, said in an interview.

The counter-guarantees will be in equal partnership with about 10 of Europe’s largest lenders to the sector and directed toward the region’s five main wind turbine manufacturers as well as companies in the supply chain.

IRENA Says Tripling Renewables Globally Is “Done Deal”

The director general of the International Renewable Energy Agency said a tripling renewables target is “absolutely” feasible. As of two days ago, 111 countries said they were behind the goal, “so others will join,” Francesco La Camera said in an interview, “I think it’s a done deal, the pledge is there.”

“We need policies that may favor switching the demand from fossil fuel to others and they are not still in place,” he said. “The narrative after COP should be to overcome those barriers for adding more money into renewables.”

Biden Administration Announces New Crackdown on Methane

The US will force oil and gas companies to replace leaky equipment and regularly search for escaping methane gas as part of a new effort to crackdown on the greenhouse gas. 

The final regulation announced by the US Environmental Protection Agency and Biden administration officials at COP28 comes amid an intensifying global focus on methane. The potent greenhouse gas is at least 80 times more powerful than carbon dioxide in warming the atmosphere during the first two decades after its release.

France Leads Push to Cut Off Private Coal Finance

France is leading a push to cut off private finance flowing from banks in Group-of-Seven nations to new coal projects, as developed nations look to further stymie one of the most polluting sources of greenhouse gas emissions.

The Coal Transition Accelerator was launched by France alongside the US, the EU and a number of developing countries like Indonesia and Vietnam, who are members of so-called Just Energy Transition Partnerships that aim to transition economies away from coal. 

The initiative is asking the Organisation for Economic Co-operation and Development and the International Energy Agency to establish a “gold standard” to measure and assess climate and financial risks attached to private sector investments in new coal assets — one way to make them more expensive. Meanwhile, the US and six other countries joined the Powering Past Coal alliance to commit to not building new coal plants and to phase out existing ones in order to keep 1.5C in reach.

Brazil Urges More Regulation for Carbon Markets

The head of Brazil’s development bank said it’s urgent that stronger regulation is applied to carbon markets as the country draws up an ecological transformation plan to protect its environment and create jobs. The strategy is expected to cost as much as $160 billion per year for the next decade. BNDES President Aloizio Mercadante spoke on a panel in Dubai with Finance Minister Fernando Haddad. Haddad reiterated his view that the country has room to cut interest rates next year. Brazil has just assumed the presidency of the G20 and hosts COP in 2025.

Mottley Calls for Long-Term Access to Finance

Barbados Prime Mia Mottley told world leaders that “we need to change our attitude to access to capital.” She said COP28 needs to end with a global methane agreement and progress in unraveling what’s needed for opportunities to increase climate investment in developing countries. “We need people at the table” including insurance companies, ratings firms and banking regulators, she said. 

Macron Says Developing Countries Should Be Able to Invest in Nuclear

French President Emmanuel Macron said developing countries should be able to invest in nuclear power as part of their green transitions, especially by using small modular reactors. He added that Belgium would host a nuclear summit in March in Brussels alongside the International Atomic Energy Agency.

Macron said that nuclear pledge countries would also work with the IAEA to develop a regulatory framework to help countries deploy nuclear energy in a safe and reliable way, adding that the World Bank was needed to help finance the roll-out.

Emmanuel Macron Photographer: Hollie Adams/Bloomberg

“This commitment and the goal of tripling nuclear capacity sends a powerful signal to the world,” Macron said. “Nuclear energy is back and it is an indispensable solution to the fight against climate change.”

France has one of the world’s largest nuclear power industries.

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