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TOP STORY

Researchers urge removal of older offsets, legacy projects to save global voluntary carbon market

Call it the ‘first-mover disadvantage’. Researchers are urging for carbon credits generated from historical emissions reductions, as well as the older projects that created them, to be all purged in a bid to save the global voluntary offset market.

ASIA PACIFIC

Moderate, but rising price expectations for China’s national ETS -survey

Chinese market participants believe prices in the national emissions trading scheme will start off slightly higher than the level they estimated last year, though overall price expectations remain modest, a survey showed Tuesday.

Japan’s GHG emissions continue to fall, putting Paris pledge in easy reach

Japan’s greenhouse gas emissions fell 2.7% year-on-year in FY2019, preliminary government data showed Tuesday, keeping the country on track to easily meeting its Paris pledge from five years ago.

NZ Market: Record NZU run continues unabated as sellers step back

New Zealand carbon allowances on Tuesday notched a fifth straight day of record high prices, with spot NZUs firming almost 5% over the period as willing sellers remain elusive.

EMEA

UK should front-load its effort towards net zero, say advisors

The UK should front-load its efforts towards its 2050 net zero goal by setting a 2035 emissions reduction target of 78% under 1990 levels, and should consider forcing airlines to buy domestic removals offsets, the government’s independent advisory body said on Wednesday.

EU Commission sets out updated benchmarks for free carbon market allocations over next 5 years

The European Commission has released draft values for the benchmarks used determine free EUA allocations to each industry over 2021-25, advancing the delayed process for handing out the units from next year.

EU carbon market reform can support ‘green’ industry frontrunners

A strengthened EU ETS resulting from a higher bloc-wide emissions reduction target by 2030 will be an important tool to support industrial decarbonisation, a panel featuring representatives from heavy manufacturers, government, EU legislative bodies, and green groups heard Tuesday.

EU Market: EUAs fall back after hitting €30, despite Brexit progress

EUAs touched €30 on Tuesday but slipped back even after signs of progress on a Brexit trade deal, while carbon traders brace for the expiry of the Dec-20 options contracts.

AMERICAS

California governor expected to name ARB chair appointee soon, sources say

California Governor Gavin Newsom may announce ARB Chair Mary Nichols’ replacement in the next week, with the appointee to guide the state agency through the 2022 Scoping Plan, sources told Carbon Pulse.

ANALYSIS: Oil majors, utilities shift offset usage amid low California allowance prices

Low carbon allowance prices earlier this year may have contributed to fewer California entities surrendering offsets at the interim compliance deadline in November, but participants anticipate the trend skewing back to historic levels next year.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Compo costings – Germany’s decision last week to award 11 hard coal plants almost €317 mln in compensation for shutting in 2021 may well have extended the facilities’ lives, according to analysis by environmental think-tank Ember. It found that seven of the larger facilities have run at less than an eighth of capacity so far this year and made losses totalling more than €200 million in the last two years due to market forces including higher EU carbon prices. Ember said the compensation could instead be invested in strategies to ensure just transitions in the communities most affected by the coal phaseout and wants Germany bring forward its 2038 deadline to a “Paris-compliant” 2030.

Cash strapped – Exxon Mobil has temporarily halted work on a planned carbon capture storage (CCS) project in Wyoming, but the oil giant told Bloomberg this week that project remains in its capital plans. Exxon shelved the LaBarge project as its stock price fell to 18-year low amid the COVID-19 pandemic, but it has moved forward with more traditional oil and gas projects since. Bloomberg found the LaBarge project, which would be the largest CCS project solely operated by Exxon, would have made 20% of the company’s emission reduction efforts out to 2025, according to documents. Exxon officials said the project remains in its plans, but spending cuts have impacts projects across the company. (Bloomberg)

The H Team – The world’s biggest green hydrogen developers have joined forces to expand the production of hydrogen 50-fold in less than six years and to radically drive down the cost in a project called the “Green Hydrogen Catapult”. The companies involved include ACWA Power, CWP Renewables, Envision, Iberdrola, Orsted, Snam and Yara. They hope to reduce the cost of hydrogen to $2 per kg, down from $3.50-8 currently. (BBC)

Rich lift – EU emissions reductions since 1990 resulted from a fall in the emissions of lower- and middle-income Europeans, while the emissions of the richest 10% of Europeans grew, development charity Oxfam reveals in analysis based on research conducted with the Stockholm Environment Institute on the consumption emissions of different income groups between 1990 and 2015, when emissions fell 12%.

Solid state breakthrough – Battery startup QuantumScape revealed test results on Tuesday that showed its solid-state battery had overcome core challenges that plagued previous iterations. A solid-state battery would use a solid electrolyte and pure lithium metal negative terminal that experts believe could enable ultra-fast charging and increase energy density. However, past attempts have been plagued by short life spans and slow charging. QuantumScape said its battery can charge to 80% of capacity within 15 minutes, retains more than an 80% charge after 800 charging cycles, and has an energy density of 1,000 watt-hours per litre, or double the current lithium-ion cells. Company CEO Jagdeep Singh said the technology could propel electric vehicles into the mainstream. (Wired)

There’s always a first – Southeast Asia has been slow in joining in the race to ditch coal, but Malaysia’s CIMB Group Holdings on Tuesday became the first banker in the region to do so, according to Reuters. CIMB said it would phase coal out from its portfolio by 2040, and it has strengthened environmental requirements for palm oil, forestry, and oil and gas companies to receive lending.

A bit more can’t hurt, can it? – The Independent Planning Commission in Australia’s New South Wales on Tuesday approved an application by Wollongong Coal to extract 3.7 Mt of metallurgical coal from its Russell Vale colliery over the next five years, ABC reports. Project documents show that the mine will emit around 1.5 MtCO2e over that period, while another almost 10 Mt worth of Scope 3 emissions will be released from the consumption of the coal. The commission ruled that 1.5 MtCO2e is acceptable and would be unlikely to threaten Australia’s Paris target, while the Scope 3 emissions will be released outside of Australia, so that’s not its problem.

Good example – South Korea’s government agencies will reduce their GHG output 37.5% below 2017 levels by 2030, compared to an overall target for the country of 24.4%, the environment ministry announced Tuesday. While the public sector isn’t a large emitter nor a significant energy consumer, the government wants to be a shining example for the private sector on the way to meeting the net zero target. The new goal covers 45 central government agencies, 243 local governments, 17 metropolitan and provincial education offices, 290 public institutions, 140 corporations and industrial complexes, 36 national and public universities, and 782 other institutions, including even dental hospitals.

Positive outlook – Brazil’s approval of the Floresta+ programme may shift a sense of negativity from the government towards international investors in voluntary REDD+ projects, potentially bolstering future investments, according to a new report. The Floresta+ pilot programme will target the restoration and recovery of native vegetation, the prevention of deforestation, and compliance with environmental legislation among small farmers, indigenous and traditional peoples, public institutions, and civil society. The programme has faced environmental criticism, but the report authored by six groups, including Brazilian REDD+ developer Biofilica and environmental market firm BVRio, found the programme’s advancement could led to positive outcomes. “Considering the potential for large scale GHG mitigation of the Brazilian nature-based sector, an increase in market activity for voluntary REDD+ credits could result in more widespread adoption of market practices accepted by Brazil,” the authors wrote. The report added the shift could come at a moment when the Brazilian environmental is fragile as deforestation has risen in the first half of 2020.

And finally… Scope X – Businesses routinely report their CO2 emissions in three categories: Scope 1 for the direct burning of fossil fuels in generators, facilities, and vehicles; Scope 2 for purchased energy, such as electricity or heat; and Scope 3, the most complicated, for supply chains and customers. But for as much CO2 as that system covers, it’s still incomplete, Bloomberg reports. Many businesses pollute very little themselves but do much to aid and abet the emissions of others – think public-relations and advertising firms, lobbyists, consultancies, law firms, and other professional services. These businesses certainly contribute to carbon pollution by promoting high-emissions activities, and yet there’s still no way to quantify their responsibility for the damage caused by climate change. Solitaire Townsend, co-founder of the UK PR firm Futerra, has one idea. She wrote an op-ed over the summer calling for universal recognition of these so-called “Scope X” emissions. Since the Paris Agreement was finalised in 2015, Futerra has issued annual statements about the carbon make-up of its clients and signed up some 300 other PR firms around the world to do the same. Separately, UK research firm Influence Map has spent the last several years developing a methodology to score the effect companies have on climate policy, for better or for worse. Climate lobbying – or “Scope 4” emissions, as Influence Map once labeled them – is graded on an A to F scale that reflects a company’s “readiness for a transition to low carbon policy globally.”

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