Establishment of the New Alliance 'ARC Coalition' to Support Carbon Credit Demand and Financing

Osaka Gas Co., Ltd. (President and CEO: Masataka Fujiwara, hereinafter 'Osaka Gas'), together with Bain & Company, Carbon Growth Partners, CATL, Climate Bridge International, Climate Impact X, Enterprise Singapore, GenZero, Mitsubishi Corporation, Rubicon Carbon, Tencent, Vale, and the World Wide Fund for Nature (WWF) Singapore, is participating in the new international alliance for carbon credits, the 'Action for a Resilient Climate (ARC) Coalition' (hereinafter 'ARC Coalition').

The ARC Coalition aims to aggregate corporate demand for high-quality carbon credits and support the provision of funds to projects that generate them. The coalition seeks to promote investment in projects that contribute to solving climate change issues reliably, strengthen trust in the market, and create an environment where more companies can participate in the global carbon credit market.

Background High-quality carbon credits play a crucial role in achieving the long-term temperature goals of the Paris Agreement and promoting reliable corporate sustainability activities. Continued growth in the carbon credit market requires collaborative efforts and stronger cooperation among diverse stakeholders. The ARC Coalition will initially focus on aggregating demand in the Asian region, supporting the expansion of projects generating high-quality carbon credits, and contributing to the formation of a more reliable global carbon credit market.

Purpose of the ARC Coalition The ARC Coalition brings together companies, financial institutions, charitable organizations, government agencies, and technical experts to improve market integrity, strengthen practices, and create an environment where companies can purchase high-quality carbon credits with confidence. It also supports reliable and efficient carbon credit procurement in line with international rules and excellent practice examples for corporate decarbonization.

These goals will be realized through the following initiatives:

・ Demand Aggregation: The ARC Coalition gathers corporate buyers and promotes the demand for and utilization of high-quality carbon credits. It sets a goal of procuring over 10 million tons of carbon credits by 2030, thereby fostering collaboration with project developers who contribute significantly to greenhouse gas reduction.

・ Creation of Financing Opportunities: A distinctive feature of the ARC Coalition, compared to other carbon credit-related alliances, is its collaboration with partners and financial institutions to build and implement mechanisms for providing funds to high-quality projects at an early stage. This aims to accelerate the expansion of carbon credit supply and generate positive outcomes for climate, biodiversity, and nature on a large scale.

・ Establishment of Strict Quality Standards: The ARC Coalition will establish transparent and reliable standards for the selection and utilization of carbon credits. While referencing international rules and frameworks adopted by the Coalition to Grow Carbon Markets and the Integrity Council for the Voluntary Carbon Market (ICVCM), it will ensure the flexibility to support early-stage projects. Furthermore, by utilizing rating agencies, it aims to improve market reliability, ensure consistency, and contribute to the formulation of standardized rules and guidance.

・ Improving Access to Carbon Credits: To make it easier for companies to participate in the carbon credit market, the ARC Coalition will streamline carbon credit procurement by providing evaluated, selected, contracted, and managed projects.

The ARC Coalition emphasizes collaboration with partners who share common goals for the development and increased reliability of the global carbon credit market. As part of this, it is collaborating with the 'Symbiosis Coalition,' an alliance of corporate buyers aimed at purchasing high-quality, nature-based carbon removal credits, to share excellent practice examples, and to improve quality standards, due diligence, and contracting processes in common areas.

* The ARC Coalition will be established as a non-profit organization based in Singapore.