On 23 April 2024, the UK’s Financial Conduct Authority (“FCA“) published its “Finalised non‑handbook guidance on the Anti‑Greenwashing Rule (FG/24/3)” (the “Guidance“). The FCA has published the Guidance to help in-scope firms understand and comply with the anti-greenwashing rule, which will come into effect on 31 May 2024.

Continue Reading UK Financial Conduct Authority publishes finalised guidance on its Anti-Greenwashing rule

In March 2023, the European Commission proposed the Green Claims Directive (the “Directive“), which aims to tackle greenwashing (read our previous update on the Directive here).  On 12 March 2024, the European Parliament voted in favour of the Directive at first reading. This move further complements the EU’s commitment to empowering consumers, ensuring fair competition and fostering a more environmentally responsible marketplace.

Continue Reading The Green Claims Directive: European Parliament approves at first reading

Replace, Reduce and Remove.

The 3Rs that constitute the three-pronged approach espoused by PUB, the national water agency of Singapore, in its hefty goal of achieving net zero emissions by 2045. The strategy by PUB focuses on replacing fossil fuels with renewable solar energy, investing in research and development to reduce the energy required in water-treatment processes, and capturing and removing carbon released into the atmosphere.

In an ambitious move to combat climate change and attain its lofty aim of achieving net zero emissions by 2045, PUB unveiled on 27 February 2024 its upcoming plans for Singapore to host the world’s largest ocean-based carbon removal plant. This ground-breaking initiative, known as “Equatic-1”, represents a collaboration between the carbon removal company, Equatic, the national water agency PUB, and the University of California, Los Angeles (UCLA). The announcement details plans to construct a US$20 million facility capable of removing 3,650 metric tons of CO2 from the ocean annually while simultaneously generating 300kg of carbon-negative hydrogen per day.

Equatic-1 leverages a novel method dubbed the “Equatic process” to enhance the ocean’s natural capacity for carbon sequestration. This technique involves the electrolysis of seawater to precipitate carbon dioxide into solid calcium and magnesium-based materials, akin to natural seashell formation. These materials are designed to safely sequester CO2 for over 10,000 years, effectively turning the ocean into a more potent carbon sink. The process also yields carbon-negative hydrogen, a promising clean energy source.

This initiative is a part of Singapore’s broader strategy to reach net zero emissions by 2045, outlined by PUB. The strategy focuses on replacing fossil fuels with renewable energy, reducing energy consumption in water treatment, and employing innovative technologies like Equatic-1 to capture and store atmospheric CO2. The project builds on the success of two pilot plants in Los Angeles and Singapore, which began operations in March 2023 and have demonstrated the feasibility of the technology at a smaller scale.

Equatic-1 is set to be commissioned in Tuas, western Singapore, and is expected to begin operations in the last quarter of 2024, starting with the capacity to remove one tonne of CO2 per day. This capacity will be scaled up to 10 tonnes per day by the second quarter of 2025. The project is co-funded by PUB, the National Research Foundation (NRF) Singapore, and UCLA’s Institute for Carbon Management (ICM), with significant contributions from a multidisciplinary team of researchers and technology experts.

The commercial implications of this technology are also significant, with the operation of Equatic-1 expected to generate carbon credits. These credits will be distributed among the project partners according to their funding contributions. Moreover, Equatic has already signed agreements with various companies, including Boeing, to purchase these carbon credits, underscoring the commercial viability and environmental potential of the technology.

In addition to mitigating climate change, the Equatic process presents opportunities for integration with Singapore’s desalination operations, enhancing water security while reducing carbon emissions. The solid carbonates produced can potentially be used in the construction industry, while the hydrogen byproduct may serve as a clean energy source for various industrial applications.

This initiative not only marks a significant step toward Singapore’s climate goals but also represents a scalable solution for global carbon reduction efforts. With its innovative approach to carbon sequestration and clean hydrogen production, Equatic-1 embodies the intersection of technology, sustainability, and industry collaboration, poised to make a significant impact on the fight against climate change.

Other Author: Maria Chang

On 19 March 2024, GRESB – an investor-led organisation that provides standardised and validated data to assess the sustainability-related performance of real estate assets and portfolios – announced the upcoming launch of “REAL Solutions“. REAL Solutions is a new suite of tools designed to provide real asset managers and investors with more granular ESG data, which they are demanding in order to take advantage of opportunities in the sustainable investment market and to comply with increasingly burdensome ESG-related regulations.

Continue Reading GRESB announces launch of its new suite of ESG-evaluation tools, REAL Solutions

The UK Government launched a Consultation on the introduction of a UK CBAM on 21 March 2024.  The Consultation closes on 13 June 2024.  This follows the announcement, in December 2023, that the UK would implement a UK CBAM similar to the EU CBAM which came into effect on 1 October 2023.

In this update, we summarise the key design features of the proposed UK CBAM and highlight some of the key differences with the EU CBAM.

Continue reading at Mayerbrown.com.

On 26 March 2024, the European Securities and Markets Authority (“ESMA“) published a consultation on its first set of regulatory technical standards (“RTS“) under the EU Green Bond Standard Regulation (the “Consultation“). The Consultation addresses mandates relating to the registration and supervision of external reviewers and aims to clarify the criteria used for assessing an application for registration.

Continue Reading ESMA publishes Consultation Paper on European Green Bond Standard Regulation

The SEC today paused implementation of the climate rules the agency rolled out less than one month ago, in the face of significant legal challenges in numerous federal lawsuits.  The rules would impose substantial disclosure mandates on companies, including concerning the costs of extreme weather events, corporate strategies for addressing climate change, corporate governance procedures and, for many companies, greenhouse gas emissions.

The SEC proposed the rules two years ago and received voluminous comment letters, including many critical ones questioning the proposal’s legality. In response, while the SEC withdrew proposals to require disclosure of emissions across a company’s value chain and added some materiality qualifications, the final rules would continue to impose costly, expansive and controversial duties. The plaintiffs in the cases, including SEC registrants, say the final rules are beyond the SEC’s statutory authority, that some would compel speech on controversial topics in violation of the First Amendment, and that the SEC failed to comply with certain provisions of the Administrative Procedure Act. 

The first federal court to assess one of the lawsuits ordered the final rules stayed, but lifted that suspension when transferring the case to another circuit where all the cases are being heard on a consolidated basis.  The plaintiffs that won the earlier stay were joined by plaintiffs from the other cases in requesting a renewal of the stay.  In light of that action, the SEC announced its unilateral decision to suspend its rules. It explained its decision as appropriate amid a pending case to assure an orderly judicial and regulatory process.  The agency took pains to say it continues to believe the rules are valid, to negate any suggestion that it acknowledges the seriousness of the legal challenges.

Read our client alert on the SEC Final Rule here.

On March 5, 2024, the European Parliament and the Council of the European Union reached a “political agreement” on a Regulation prohibiting products made with forced labour (“the EU Forced Labour Regulation” or “the EUFLR“) on the European Union (“EU“) market (see Insight of 6 March 2024 hhttps://www.mayerbrown.com/en/insights/publications/2024/03/eu-political-agreement-on-forced-labor-product-ban). The EUFLR prohibits companies from “placing and making available” on the EU market, or exporting from the EU, products made with forced labour.

Continue reading at Mayerbrown.com.

On March 25, 2024, the Brazilian federal government published Decree No. 11.961/2024, establishing an advisory and deliberative group, the Brazilian Sustainable Taxonomy Interinstitutional Committee (“CITSB”), which will coordinate the development and implementation of the Brazilian Sustainable Taxonomy (“TSB”). The TSB will establish a classification system for sustainable projects and activities, providing standardized terminology for companies, financial institutions, investors, regulatory bodies, governments, and other stakeholders, thereby harmonizing investment decisions and the development of public policies.

Continue reading at Mayerbrown.com.

On 5 March 2024, the European Commission adopted a delegated regulation that will supplement the EU Securitisation Regulation with regulatory technical standards (“RTS“) in relation to simple, transparent and standardised (“STS“) securitisations where the underlying exposures are residential loans or auto loans or leases. The RTS specify the content, methodologies and presentation of information related to the principal adverse impacts (“PAIs“) of assets financed by the underlying exposures on sustainability factors for (i) non-asset-backed commercial paper (“non-ABCP”) traditional STS securitisations and (ii) STS on-balance-sheet securitisations.

Continue reading at Mayerbrown.com.