CP Daily: Thursday March 18, 2021

Published 22:07 on March 18, 2021  /  Last updated at 22:07 on March 18, 2021  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

CORSIA “unlikely to materially alter” aviation’s climate impact, unpublished EU analysis says

The UN’s global aviation offsetting system CORSIA is “unlikely to materially alter” the climate impact of the aviation sector, according to an unpublished EU study leaked Thursday.

INTERNATIONAL

UN’s COP26 climate summit in Glasgow to go ahead as planned this year -media

The UN’s COP26 climate summit will go ahead as planned in Glasgow later this year, the Scottish Government’s lead for the summit has reportedly said.

“Forceful, abrupt” international climate action response to birth US carbon market by 2025 -experts

Delayed efforts to combat climate change will result in a “forceful, abrupt, and disorderly” response by governments by 2025, which combined with protectionist policies will see the US introduce a national carbon pricing system by that date.

EMEA

EU negotiators urged to conclude Climate Law talks by end-April

EU institutions are aiming to conclude trilateral negotiations on the European Climate Law by the end of April, just ahead of an international climate summit convened planned for Earth Day.

EU Market: EUAs fall back from new record as markets reverse course

EUAs surged to a new record high on Thursday as markets lifted in response to a dovish US Fed and a strong auction, but fell back as concerns about inflation hit equities and triggered profit-taking.

Heating industry risks derailing EU’s climate objectives -report

Industry is delaying the phaseout of new oil and gas boiler sales across the EU, risking the derailment of the 27-nation bloc’s climate targets, a brand audit released Thursday said, while the European Commission is considering options to curb emissions from heating and cooling.

EU anti-deforestation import rules still a ways off, but related due diligence could come sooner

A high-profile initiative focused on reducing forest-risk commodity (FRC) imports into the European Union won’t be finalised for at least 18 months, but risk managers should take heed of broader guidance that dramatically expands corporate due diligence to cover a company’s entire supply chain, an MEP said Thursday.

AMERICAS

NA Markets: RGGI prices retrace after bank adjustment announcement, while CCAs languish

RGGI Allowance (RGA) prices dropped on the secondary market this week after briefly rising following the programme’s five-year bank adjustment announcement, while California Carbon Allowances (CCAs) edged down as entities looked to shift positions out on the curve.

RFS Market: RIN prices retrace as gas arbitrage closes

US biofuel credit (RIN) values declined from near all-time highs this week, as traders said a gasoline arbitrage window shut and Renewable Fuel Standard (RFS) market participants looked to divert product.

BP to partner with renewable energy company for California RNG project

BP and renewables company Aria Energy announced a partnership on Thursday to develop a renewable natural gas (RNG) project in California that could allow the oil major to earn credits under the state’s Low Carbon Fuel Standard (LCFS) and federal Renewable Fuel Standard (RFS).

Texas LNG facility to deploy CCS for as little as $13/tCO2e

A planned liquified natural gas (LNG) export facility in south Texas will feature proprietary carbon capture and storage (CCS) technology that coupled with federal tax credits could allow for a breakeven CO2 sequestration cost of $13 per tonne.

ASIA PACIFIC

China’s Industrial Bank signs first voluntary carbon forestry offset forward deal

China’s Industrial Bank on Thursday unveiled a deal involving upfront funding and forward purchase of carbon credits from a forestry project in Fujian province, a first of its kind in China that observers say can help overcome financing challenges for voluntary forestry schemes.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Carbon Pulse has teamed up with CME Group to provide its clients with regular updates on the global carbon markets. Check out these briefs for the latest insights on pressing trends and events impacting markets, published every other week. Registration required.

INTERNATIONAL

Renewed interest – Investors in renewables earned three times more than those backing fossil fuels over the past decade, signalling a broader structural trend towards a lower-carbon future, according to a joint report released Thursday by Imperial College Business School and the International Energy Agency. Amongst the study’s findings were:

  • The share of renewable power in global energy investment has risen to nearly 1/5th.
  • Renewable power has seen a 367% greater total return than fossil fuels since 2010.
  • Advanced markets’ renewable energy returns have outweighed fossil fuel returns by 2300% over the last decade.
  • Renewables posted 22% higher returns in emerging markets and developing economies.
  • There are potential diversification benefits and resilience of renewable energy, according to new correlation analysis.
  • Renewables show lower annualised volatility than fossil fuels in global markets and advanced economies, but higher in emerging markets and China.

Credit crunched – Sovereign debt downgrades are in prospect for Britain, the US, and scores of other countries around the world unless they urgently step up their efforts to reduce GHGs, according to a study. In the first attempt to adjust credit ratings to take account of the economic consequences of the climate emergency, a team of academics led by Cambridge University said failure to act would leave governments paying billions of dollars more to borrow. The study used artificial intelligence to simulate the economic effects of climate change on Standard and Poor’s ratings for 108 countries over the next 10, 30, and 50 years, and by the end of the century. (Guardian)

EMEA

Halfway there – Britain is halfway to its goal of being carbon neutral by 2050, The Times reported ($). GHGs have fallen by 51% against the government’s baseline for measuring progress towards net zero, an analysis of official data revealed. CO2 emissions fell by 13% last year to the lowest level in nearly 150 years.

Into the blue – BP aims to build Britain’s largest hydrogen plant by 2030 as part of the country’s push to boost use of the fuel and cut GHGs. The Teesside plant in northern England will have capacity of up to 1 GW of so-called blue hydrogen, about a fifth of Britain’s target of 5 GW of hydrogen capacity by the end of the decade. Blue hydrogen is produced by converting natural gas into hydrogen and storing the CO2 emissions from its production. BP has begun a feasibility study on the project to explore technologies that could capture up to 98% of the CO2 from the hydrogen production process. The Teesside project, dubbed H2Teesside, is expected to capture up to 2 Mt of CO2 a year and pipe it into storage below the North Sea. H2Teesside will be linked with Net Zero Teesside (NZT), a planned industrial zone that will also be linked to a CCS project. The hydrogen could also be used for heating residential homes in the region or for transportation. (Reuters)

AMERICAS

Climate comeback – The US EPA restored a page containing key climate change information to its public website on Thursday, four years after President Donald Trump’s administration had removed it as part of a strategy to downplay global warming threats. “Climate facts are back on EPA’s website where they should be,” EPA Administrator Michael Regan said in a statement provided to Reuters. “Considering the urgency of this crisis, it’s critical that Americans have access to information and resources so that we can all play a role in protecting our environment, our health, and vulnerable communities,” he added.

Rising rates, rising opposition – Democrat Senate Majority Leader Chuck Schumer reportedly pushed back on a US FEMA proposal to increase flood insurance rates on Apr. 1 to more accurate reflect the risk homeowners’ face, saying the policy could raise rates on low-income and middle class families, according to The New York Times. The new rates are seen as one of the federal government’s most powerful tools to limit damage from climate change, but Schumer’s opposition could create a political dilemma for the Biden administration that has backed more aggressive action of environmental issues. Under the proposed plan, roughly 4% of households with insurance would see an annual increase of 18% for 10 years or more.

Grass is a go – The Canadian Forage and Grassland Association this week announced it has launched a two-year pilot that will allow landowners and ranchers to generate carbon offsets for CO2 stored in conserved grasslands in Canada. Funding for this project has been provided through the AgriAssurance Program under the Canadian Agricultural Partnership, a federal-provincial-territorial initiative, with industry funding from Shell Canada. The pilot project aims to test and refine offset registry Climate Action Reserve’s avoided grasslands conversion protocol to assess its feasibility and better understand the challenges and opportunities associated with such a programme.

ASIA PACIFIC

SOCAR, so good – SOCAR Trading is aiming to establish a carbon division this year that would include trading and business development, executives at the Geneva-based firm, part of Azerbaijan’s state oil company SOCAR, told Reuters. “By the year-end we hope to have everyone recruited and working,” said Hayal Ahmadzada, head of trading at SOCAR.  The company is also delving into integrated LNG-to-power projects. It has already been involved in one project in Malta as part of the ElectroGas Malta consortium that built an onshore regasification facility to receive liquefied natural gas (LNG) along with a power plant, completed in 2017. Its next LNG-to-power project will be in Sri Lanka where it is part of the Pearl Energy project to develop LNG capabilities at the country’s Hambantota port. The LNG would then be transported by road to power producers with an eventual goal to build a power plant at the port.

AND FINALLY…

Proton tor-FEED-oes and other pet projects – UK start-up Deep Branch has secured funds from backers including French oil giant Total for its plan to turn CO2 into food for chickens, fish, and pigs. The company uses a fermentation process similar to winemaking or pickling, except that microbes feed on CO₂ and hydrogen instead of sugars. The result is a 70% protein product called Proton that can replace conventional livestock feed such as fishmeal and soybeans. The agriculture industry’s reliance on the two ingredients has been linked to the depletion of wild fish stocks and caused large-scale deforestation, BNN Bloomberg reports. Deep Branch says its process produces 90% fewer CO2 emissions than would have been generated from traditional agricultural methods. Most of its emissions are due to the use of ammonia, which provides the nitrogen component of its proteins. Currently, ammonia is usually produced using natural gas in a carbon-intensive process, but companies are working on ways to manufacture the gas without causing emissions. Deep Branch has raised €8 mln for a pilot project to scale up its technology. The startup is one of several using fermentation technology to develop more sustainable protein. US-based Air Protein and Finland-based Solar Foods are working on converting gases into food, while in India, String Bio recycles methane into protein for animals. Separately, The Guardian reports that scientists have found that feeding seaweed to cows is a viable long-term method to reduce their methane emissions, with researchers who put a small amount of seaweed into the feed of cattle over the course of five months recording 82% less of the gas.

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