European Commission and OECD sign agreements on the Commission’s financial contribution to the OECD IFCMA

On 10 April 2024 OECD Secretary-General Mathias Cormann and DG TAXUD Director-General Gerassimos Thomas signed two agreements paving the way for the European Commission’s financial contribution to the OECD Inclusive Forum on Carbon Mitigation Approaches (IFCMA).

The OECD IFCMA initiative is designed to help optimise the global impact of emissions reduction efforts around the world through better data and information sharing, evidence-based mutual learning and inclusive multilateral dialogue. It brings together relevant policy perspectives from a diverse range of countries from around the world, participating on an equal footing basis, to take stock of and consider the effectiveness of different carbon mitigation approaches. The IFCMA is also identifying and addressing challenges inhibiting the widespread use of carbon intensity metrics. Granular and timely carbon intensity metrics can play a key role in providing the necessary information for the development of markets for low carbon goods and underpin the transition to net zero.

Since its launch in February 2023 the IFCMA has welcomed 58 members, extending beyond OECD members. The OECD reports regularly to the G20 and engages with third countries in view of further extending membership. A Steering Group acts as the bureau of the project, and is currently co-chaired by Switzerland, Chile, and the Philippines. Other members of the Steering Group include Nigeria, Singapore, the United States, Türkiye, Japan, Denmark, Mauritius, France and the European Commission.

The financial contribution of the European Commission, worth up to a total of €600 000, will fund two IFCMA projects.  Firstly, the work on product-level carbon intensity metrics which will be carried out to identify and facilitate the use of scalable methodologies for carbon intensity metrics. The proposed work will complement a forthcoming 2024 IFCMA Carbon Intensity Workstream report, which will present a high-level overview of the main approaches to, and challenges faced when calculating product-level carbon intensity metrics. Secondly, the funding for a pilot study of Nigeria which will complement two other pilots, on Switzerland and Chile, already initiated. The pilots are designed to serve as a testing ground for various methodological approaches and to help the IFCMA to gain practical experience, with the view to scale up its work to a wider set of IFCMA members. The IFCMA is funded through statutory funding and voluntary contributions from its members.

The IFCMA’s work will usefully inform broader efforts of the EU and its international partners to reduce complexity in the implementation of decarbonisation policies. The results will allow for synergies with other international initiatives, in particular the Climate Club, a leading high-ambition intergovernmental forum for exchange on industry decarbonisation comprising 38 members and growing.  The Commission’s contribution recognises the IFCMA’s potential to enhance international collaboration for climate action and complementarity with work that the European Commission is undertaking for the Carbon Border Adjustment Mechanism (CBAM), along with other international efforts on climate.