Market updates

After nearly a decade of international wrangling, Article 6 is out of the gate. In November, world leaders finally agreed on rules for international carbon trading at COP29. The framework will unleash a flurry of carbon credit issuance and cross-border trading, making it a major milestone for carbon markets and climate action. 

It also represents a big tailwind for Oka.

By formalizing the rules that govern mandatory private-sector offsetting schemes, such as The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), it heralds and provides our customers with a clear path to vast new revenue streams.

In my public response, however, I noted that there’s a long way to go before “in principle” integrity translates into “in practice” confidence. Insurance can bridge that gap.

Market participants were quick to note that the framework is a standard, not a defence. It won’t insulate credits from political or project risks, nor buyers from loss. Developers will need to do more to reassure individual buyers in a competitive market.

In the absence of a centralized governing body enforcing the Article 6 rules, Oka has been working alongside developers, as well as registries and industry bodies, to create dedicated (in design) and systematic (in application) insurance solutions.

• Plus… CORSIA cogs continue to turn, building the case for insurance. In October, the International Civil Aviation Organization (ICAO) added registries Gold Standard, Verra, and Climate Action Reserve to its growing list of CORSIA-authorized carbon-crediting programs. Responding to ICAO’s concerns about the (unaddressed) risk of Article 6 revocation, all three registries — as part of their resubmissions — put forward insurance as a solution.
  
  That the world-leading registries are beginning to integrate insurance solutions on their platforms is an encouraging step, and it’s exciting to see recognition resonate among buyer organizations. In its latest update, ICAO expressly recognised the role of insurance products — including those offered by Oka — designed to ‘guarantee’ credits and insulate buyers against the risk of double claiming.

Product updates

Corresponding Adjustment Protect™

Our world-first Article 6 insurance solution, Corresponding Adjustment Protect™, has generated significant media interest in lockstep with market developments. It was the focus of an Quantum Commodity Intelligence article on the “increased demand” for Article 6 risk protections, as well as a feature in Carbon Pulse for which both I and Euan McDougall, COO of our customer DelAgua, were interviewed. 

Euan revealed that DelAgua “used the Oka policy on our biggest sale to date,” adding that “the policy was superb for us… buyers want that extra level of protection, and insurance has helped push the sale over the line.” Take a read of our case study for more. 

Corporate updates

In events… Read our reflections on another exciting and exhausting Climate Week NYC. There and throughout this quarter, we’ve been fortunate to be involved in a number of panels hosted by industry leaders, including Xpansiv and IETA. Most recently, I hosted a ‘fireside chat’ at the S&P Carbon Markets Conference 2024. 

In the press… Carbon insurance, and Oka’s role at the vanguard of the market, has continued to grow in profile and press attention. Our interviews this quarter included Insurance Post — for an article titled, aptly, “Is carbon insurance the biggest opportunity in decades?” — Commercial Risk Online, Trellis, and the Wicked Problems podcast.