Title page 1

Contents 1

Executive summary 1

1. Introduction 3

2. Scene-setting: Article 6, energy, and development, and the evolving financing landscape 3

2.1. A shifting financing context for energy transition and access 3

2.2. Article 6: A brief overview 5

2.3. The development opportunity: Linking Article 6 carbon finance and energy transition/access 5

3. The market for ITMOs 6

3.1. Demand for ITMOs: From nascent beginnings to potential scale 6

3.2. Supply: Strong interest, uneven readiness 9

3.3. Linking Article 6 to energy financing needs 12

4. Policy considerations 12

4.1. Policy considerations for developing (host) countries 12

4.2. Policy considerations - buyer countries 17

5. Conclusions 21

Figure 1. Cumulative demand for ITMOs until 2030 from airlines and buyer countries 7

Figure 2. Article 6.2 Agreements between countries 11

Figure 3. Example of marginal abatement cost curve to illustrate how countries can reduce the risk of overselling 14

Boxes 4

BOX 1. INVESTMENT REQUIREMENTS FOR ENERGY 4

BOX 2. EXAMPLE - ARTICLE 6 TO ACCELERATE ELECTRIC COOKING (ENERGY ACCESS) 10

BOX 3. EXAMPLE - ARTICLE 6 TO SUPPORT EARLY RETIREMENT OF COAL-FIRED POWER PLANTS (JUST ENERGY TRANSITION) 10