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TOP STORY
Japan set to boost voluntary offset demand in lieu of mandatory carbon pricing
Japanese industries are likely to add to the fast-growing global demand for voluntary carbon credits as hundreds of companies strive to align with Prime Minister Yoshihide Suga’s net zero emissions target and as the introduction of a domestic cap-and-trade programme remains improbable.
EMEA
EU kicks off process to align carbon market with higher 2030 emissions goal
The European Commission’s work on reforming the bloc’s carbon market will put a strong emphasis on adding shipping and adjusting the MSR, according to documents the EU executive published on Thursday.
Offset supply squeeze, Sasol SOS as first South African carbon tax compliance period in the books
Activity in South Africa’s offset market is picking up and prices rising as the first carbon tax compliance deadline arrives, with major emitters seeking more GHG-cutting projects amid a big chunk of the country’s available offset supply being used up.
EU lawmakers demand more global efforts to cut shipping emissions ahead of key meeting
MEPs in the European Parliament’s influential environment committee are not convinced by the deal on global shipping emissions struck last week at the UN’s International Maritime Organisation (IMO) and want the European Commission to push for more stringent measures at a meeting in November.
Statkraft sees jump in gas power output amid improved margins
Norway’s utility Statkraft has seen its ETS-covered gas power generation rise 39% over the first nine months of 2020 amid improved profitability, the company said in quarterly results on Thursday.
EU Market: EUAs lift away from 4-month low after stronger auction, wider market gains
EUAs briefly topped €24 on Thursday, rebounding from the previous session’s four-month low on a stronger auction and wider market gains, rebuffing widespread concerns over the impact of renewed coronavirus restrictions.
Silicon Valley investors back UK-based CO2 accounting startup with $3.4 mln
A real-time corporate emissions tracking platform has secured $3.4 million in funding from Silicon Valley backers including Uber’s former CEO.
AMERICAS
NA Markets: RGGI breaks $7 mark, California allowance prices slide into Q4 auction
RGGI Allowance (RGA) prices eclipsed the $7 mark for the first time in more than four years this week on relatively thin volume, while California Carbon Allowances (CCAs) continued to retrace from recent highs ahead of the WCI cap-and-trade programme’s Q4 auction.
RGGI expansion across PJM would yield 100 Mt of abatement in 2030 -study
Extending the RGGI cap-and-trade programme throughout the PJM wholesale grid could slash CO2 output by almost 100 million tons in 2030 compared to a business-as-usual scenario, according to a report published Wednesday.
Analysts expect Q2 credit surplus for California LCFS after coronavirus travel restrictions
California’s Low Carbon Fuel Standard (LCFS) credit bank will increase by 3% during the second quarter of the year due to a plunge in gasoline sales stemming from the COVID-19 pandemic, analysts said in a report published Thursday.
INTERNATIONAL
Policy pledges bring world closer to 2C warming target, but large gap remains -analysts
The world is on track to cut greenhouse gas emissions by an additional 700 million tonnes by 2030 thanks to recent commitments made by policymakers, but the overall reductions forecast are still insufficient to prevent global warming of 2 degrees C or more.
COMMENT
All change for the EU ETS
The worm is turning. European power economics are shifting in favour of coal, especially at the front of the curve, and this might be seen as being supportive of carbon. If coal’s more profitable than gas, then surely there should be more demand for carbon, right?
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BITE-SIZED UPDATES FROM AROUND THE WORLD
*Carbon Pulse is organising and moderating a series of side events at the IETA-ICAP Carbon Markets Virtual Pavilion on Nov. 11-12, including sessions on the EU ETS, China, Canada, RGGI, and carbon as an investible asset class. The full event programme also offers high-level discussions and interactive sessions, along with an informal carbon markets networking area for people to connect and stay in touch. Registration is free and open to the public, but spaces are limited for the Carbon Pulse side events so sign up now!*
See no evil – The Task Force on Climate-Related Financial Disclosures (TCFD) has found an “insufficient” one in 15 asset managers reviewed company climate risk disclosures, according to its third annual status update. It said the current voluntary global disclosures need wider backing from the industry to be fully effective. (FT)
Fossil rescue – Some €216 bln of G20 governments’ energy sector stimulus is aimed at supporting the recovery of fossil fuels, compared to €145 bln for clean energy, according to research from Finnish energy technology firm Wartsila, which called this a significant “missed opportunity” to accelerate the transition to renewable power in the wake of COVID-19. (BusinessGreen)
‘Brutal downturn’ – Big European oil and gas companies have shed more than €360 bln in market value this year while renewable energy stocks and technology companies focused on cleaner fuels have surged. The gulf in performance between the two groups highlights how investors are betting on a transition away from fossil fuels, while oil majors such as BP and Shell grapple with a brutal downturn in crude prices and how to execute their own shift towards greener forms of energy. The 16 oil and gas groups on Europe’s blue-chip Stoxx 600 index have taken a €364 bln or 53% tumble in market value. (FT)
Stepping forward – Spanish utility Iberdrola and chemical manufacturer Fertiberia have formed a new partnership that, with a €1.8 bln investment, aims to install 800 MW of green hydrogen production capacity in Spain by 2027. The announcement is a positive step towards Spain’s recent renewable hydrogen target of 4 GW by 2030. This builds on a current project announced by the partners which is expected to come online in 2021. The project aims to be Europe’s largest green hydrogen complex for industrial use, and the product will be utilised in the Fertiberia ammonia plant. (ICIS)
Cleaning up cement – London-based CCS technology company Carbon Clean and cement producer LafargeHolcim on Thursday signed an agreement to develop a large-scale CCUS project based in LafargeHolcim’s cement plant in Almeria, southern Spain. Starting with 10% of CO2 emissions from 2022, the project could potentially capture 700,000 tCO2 and achieve full decarbonisation at the plant. The CO2 captured will be recycled for agricultural use to accelerate crop production by imitating and accelerating the natural photosynthesis process. The total project costs were not disclosed, although LafargeHolcim announced at the end of 2019 that it would invest about €150 mln on decarbonisation projects in Europe, €20 mln of which would be earmarked for projects in Spain.
Bank on it – Australia’s ANZ bank on Thursday said it would align its lending policy with a net zero emissions target for 2050 and gradually wind down lending to new coal-fired plants over the next decade, reports the ABC. The policy included offering existing clients help to diversify away from coal over the next five years. But the move sparked a series of angry statements from senior members of the National party, the smaller of the two government Coalition partners, who said the bank would create difficulties for farmers. Deputy Prime Minister Michael McCormack dismissed ANZ’s announcement as “sheer virtue signalling”, according to the Sydney Morning Herald.
Australian acknowledgement – This week’s announcements by Japan and South Korea that they will hit net zero emissions by 2050 have mostly been welcomed by observers worldwide, but not by the Australian government. Asked in parliament five times on Thursday whether she welcomed the targets, Foreign Affairs Minister Marise Payne refused to go further than saying Australia “acknowledges” the decisions, the Guardian reports. The Australian government itself has rejected to set a similar target, ridiculing it on several occasions. There are also concerns in Australia that new net zero policies in Japan, South Korea, and China will hurt its coal and LNG exports to those countries.
Deeper sink – China’s forests are absorbing more carbon than previously estimated, according to recent research reported in Nature. An international team has identified two areas in the country where the scale of CO2 absorption by new forests has been underestimated. Taken together, these areas account for a little over 35% of China’s entire land carbon sink. Billions of trees have been planted in the country in recent decades to tackle desertification and soil loss and to establish timber and paper industries. The new study refines estimates for how much CO2 all these extra trees could be taking up as they grow. (BBC)
Rhode Island ready, day two – Rhode Island can pursue climate-related claims against oil and gas companies in state court, the US Court of Appeals for the First Circuit ruled Thursday in a setback for the industry. The appellate panel rejected arguments from ExxonMobil, Chevron, and others that said the case raised federal issues and therefore belonged in federal court. The ruling follows similar decisions in other circuits that allowed local governments’ climate cases to proceed in state courts. (Bloomberg Law)
What are your values? – The New York Department of Environmental Conservation (DEC) on Thursday released draft “Value of Carbon” guidance to assist state entities with estimating the value of the GHG reductions in decision making. The agency noted this guidance is different than a regulation and does not propose a carbon price, fee, or compliance obligation. Public comments are accepted until Nov. 27.
And finally… Space is the place – If Democratic presidential nominee Joe Biden wins the Nov. 3 election, he’ll likely maintain the Space Force, a fledgling military service branch under President Donald Trump’s administration, alongside many of Trump’s other space initiatives. But Biden also plans to turn NASA’s attention closer to home in order to help the US combat climate change, meaning a greater role for NASA’s Earth science research, an area that has been squeezed by Trump, according to space leaders who are advising or supporting Biden’s campaign, and outside analysts. The space agency already uses satellites to study and understand the environmental changes that are causing more droughts, rising sea levels, more frequent deadly storms, and natural disasters, while figuring out what human actions might reverse or minimise the damage. Those tools could be central to the government-wide effort that Biden has proposed to invest in clean energy and beef up infrastructure to withstand climate change. (Politico)
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