Is trade key to cutting global emissions? With Jon Erik Remme and Patrick King

00:00 – 04:00 Noah Brener: This is Let’s Talk Energy, your go‑to podcast for smart energy insights. I’m your host, Noah Brener. Each week, we bring you an inside look at the forces shaping global energy markets through conversations with Rystad Energy experts and special guests. Today, we’re discussing global emissions and how shifting priorities around cost, security of supply, and trade could influence climate progress. While many companies and governments still support emissions reduction, affordability and energy security are increasingly taking center stage. At the same time, emissions are becoming a factor in global trade, with tariffs and regulations tied to carbon or methane intensity. To unpack these trends, I’m joined from Oslo by Jon‑Erik Remma, Senior Vice President leading our coverage of climate policy and carbon markets, and Patrick King, Vice President covering global emissions. Jon Erik, welcome. Jon Erik Remme: Thanks for having me. Patrick King: Great to be here. Noah: We’re recording as the US considers major regulatory changes around emissions. Some people say global interest in climate action is fading. Is that accurate? Jon Erik: Not entirely. Companies are still working seriously on decarbonization, but the energy trilemma has shifted. Reliability and affordability have moved ahead of sustainability after recent energy crises and geopolitical tensions. Sustainability hasn’t disappeared — it’s just less dominant right now. 04:00 – 08:00 Noah: Are emissions rising or falling today? Patrick: We’re seeing something close to a plateau. Coal emissions are expected to decline, oil demand may grow for longer, and gas demand could extend even further. Together, these trends suggest peak emissions could arrive within the next few years. Power demand growth — especially in places like India — will be critical. Renewables can cover much of new demand, but rising wealth and increased electricity use, like air conditioning, could offset some gains. Noah: What does this mean for the Paris Agreement targets? Patrick: Limiting warming to 1.5°C looks increasingly difficult. Current national climate commitments point closer to about 1.7°C, and our base case is nearer 1.9 to 2°C. However, methane reduction offers a meaningful opportunity. Oil and gas methane emissions alone represent about 20% of global emissions — reducing those could shift warming trajectories by around 0.1°C. 08:00 – 12:00 Noah: Countries once celebrated steep emissions cuts, but now they worry about industrial competitiveness. How has sentiment changed? Patrick: Five years ago, there was strong momentum toward aggressive decarbonization targets. But geopolitical instability and supply security concerns shifted priorities. Europe’s emissions reductions, for example, partly came from de‑industrialization — moving heavy industry overseas. As carbon costs rise under systems like the EU Emissions Trading System, companies face tougher decisions about staying competitive while reducing emissions. Noah: Jon Erik, emissions policy is increasingly tied to trade. Are climate policies becoming trade tools? Jon Erik: Absolutely. Emissions reduction is a global problem, but domestic policies create friction. Mechanisms like carbon border adjustments attempt to level the playing field by attaching a carbon footprint to traded goods. They can both protect domestic industries and influence global production practices. 12:00 – 16:00 Noah: Let’s talk about Europe’s Carbon Border Adjustment Mechanism, or CBAM. Patrick, what reactions are we seeing globally? Patrick: Many Asian economies are introducing carbon pricing systems partly in response. Malaysia is rolling out a carbon tax, Vietnam is piloting an emissions trading system, and Japan is expanding voluntary carbon markets. By implementing domestic carbon pricing, exporters can reduce fees applied at Europe’s border. However, some sectors remain excluded, like oil and gas — which creates uneven impacts. European refiners pay carbon costs while some imports do not, at least for now. Noah: Jon Erik, could something similar emerge in the US despite weaker climate policy? Jon‑Erik: Potentially, yes. Even without a strong climate focus, carbon‑based trade rules can appeal from a competitiveness standpoint. US manufacturing often has a lower carbon footprint than some competitors, which could make carbon‑adjusted trade attractive from a geopolitical perspective. 16:00 – 20:00 Noah: Let’s shift to methane regulations. Europe is requiring suppliers to verify emissions performance. How big is this issue? Patrick: It’s significant. Europe depends heavily on imported energy, and methane regulations could reshape trade flows. Tracking emissions intensity and verifying supply chains is complex, and there isn’t yet enough certified low‑methane gas to meet demand. The US has some advantages because certain regions already produce relatively low‑emissions gas. However, other suppliers — like Algeria — may struggle to comply quickly. This creates tension between climate goals and energy security, especially for southern European countries reliant on specific pipelines. 20:00 – 24:00 Noah: What about corporate climate commitments? Are companies backing away? Jon Erik: It’s a mixed picture. Some firms are delaying timelines, but many remain committed — partly because targets are legally or reputationally binding. The tech sector is a good indicator. Companies like Microsoft continue investing heavily in carbon removals and credits to maintain their climate goals, even as emissions rise from data center expansion. 24:00 – 28:00 Noah: Carbon markets have faced criticism recently. Where do they go from here? Jon Erik: The voluntary carbon market is maturing. We’re seeing better standards, clearer price differentiation, and stronger demand. Even with companies adjusting climate ambitions, we expect carbon credit usage to grow significantly — potentially tripling by 2030. These markets offer flexibility, allowing companies to address emissions they can’t directly eliminate. Noah: Patrick, how are emissions measured today — and could that change? Patrick: Most companies follow the Greenhouse Gas Protocol, which divides emissions into Scope 1, 2, and 3. Scope 3 includes the entire value chain and often leads to double counting. A new industry initiative proposes attaching a fixed carbon footprint directly to each product — almost like a financial label — which could simplify trade‑based carbon accounting. 28:00 – 32:00 Patrick: The challenge is adoption. The current system is widely used globally, so replacing it would require broad agreement from governments and industry. Jon Erik: Interestingly, policy trends like CBAM and methane regulations already push in that direction. Attaching emissions data directly to goods could make sustainability more practical — integrating climate considerations into trade and consumer decisions. Noah: Could consumers eventually see carbon labels like calorie labels on food? Jon Erik: Possibly. It’s a pragmatic way to keep sustainability relevant while balancing affordability and security concerns. 32:00 – 36:00 Noah: Looking ahead to 2030 — what might we be discussing? Patrick: Peak emissions should occur within the next few years, but many corporate and policy targets face a reality check. Some goals may slip as energy security takes priority. Jon Erik: I expect carbon markets to become a mainstream global commodity by then. As emissions trading systems expand and offsets become more accepted, they’ll play a larger role in balancing climate goals with economic realities. 36:00 – End Noah: Let’s recap. Emissions policy is increasingly shaped by affordability and energy security concerns. Trade policies may become key tools in regulating carbon intensity, and product‑level carbon footprints could transform how we measure emissions. While climate ambition remains, the path forward looks more pragmatic — and more uncertain. Thanks for listening to Let’s Talk Energy. This podcast is a Rystad Energy production. Connect with us on social media, subscribe, and join us next week for more insights into the global energy landscape.