CP Daily: Monday March 22, 2021

Published 23:37 on March 22, 2021  /  Last updated at 23:39 on March 22, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

EXCLUSIVE: Discredited, ageing Kyoto offsets re-emerge to taint voluntary carbon market

Years after being widely discredited, decade-old Kyoto Protocol offsets from Russia and Eastern Europe are still in circulation in the voluntary carbon market, with nearly 2.6 million sold to companies in the EU and US by an established trading house that said some buyers are seeking the cheapest possible credits.

INTERNATIONAL

Green Climate Fund commits $1.2 bln to new projects

The Green Climate Fund approved $1.2 billion in new funding to 15 projects at this year’s first board meeting, including programmes aiming to cut emissions by more than 420 MtCO2e over their life spans.

Oil firm BP reports 10% fall in full-scope emissions

Oil major BP saw a 10.1% drop in its 2020 full-scope GHG emissions as sales fell sharply due to pandemic restrictions, it said on Monday, reporting less of a decrease than that of its main rival Shell.

AMERICAS

Utah legislature reapproves funding for lawsuit challenging California climate policies

Utah Republicans restored funding to challenge California’s cap-and-trade programme and emissions performance standing (EPS), with the lawsuit likely to progress this summer, state officials told Carbon Pulse.

Additional permit allocations to lower RGGI auction supply for remaining 2021 sales

RGGI’s remaining auctions this year will see total volume decline by roughly 4% from the Q1 sale, after two member states set their allowance allocation levels following the power sector carbon market’s bank adjustment announcement last week, data showed.

EMEA

EU Market: EUAs rebound 2.1% as energy, equities lend support

EUAs hit €43 on Monday, climbing back towards record levels as higher energy and equity prices helped counter renewed coronavirus lockdown worries in Europe.

VOLUNTARY

VCM Report: VER prices converge, while CORSIA credit premium emerges

Voluntary emission reduction (VER) prices between different exchange-traded products narrowed over the week, while voluntary carbon market (VCM) participants took note of entities tacking on a premium to credits eligible for UN body ICAO’s global aviation offset scheme CORSIA.

ASIA PACIFIC

South Korea to appoint three new ETS market makers

South Korea will appoint three additional market makers to boost liquidity in its emissions trading scheme, the environment ministry has announced, just days after amending the rules to allow private-sector entities to fill the role.

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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

Group work – The last 72 hours highlighted hurdles and opportunities for US-China cooperation on climate at a time of very deep divisions over human rights, cybersecurity, and more. Chinese state media, in a weekend readout of high-level talks between the two nations in Alaska on Thursday and Friday, said one outcome of the multi-topic meeting will be a “joint working group” on climate. But yesterday a US State Department spokesman told Axios that “the two sides discussed the climate crisis but did not form a formal working group.” Nevertheless, US Secretary of State Antony Blinken cited areas where the two countries’ “interests intersect” – including climate. The US and China are co-chairing a reconstituted G20 Sustainable Finance Study Group.

Full scope fail –  Eighty-four of 159 companies monitored by the investor-led Climate Action 100+ (CA100) tracking initiative have committed to net zero emissions by 2050, but just 39 of these include Scope 3 emissions, according to the organisation’s assessment published Monday. The report measures corporate commitments against 10 criteria defined in late 2020 to promote transparency and comparability across disparate corporate net zero commitments.

AMERICAS

Three’s company – President Joe Biden’s economic advisers are preparing to recommend spending as much as $3 trillion on a sweeping set of efforts aimed at boosting the economy, reducing CO2 emissions and narrowing economic inequality, beginning with a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich, according to people familiar with the plans and documents obtained by The New York Times. The first legislative piece under discussion, which some Biden officials consider more appealing to Republicans, business leaders and many moderate Senate Democrats, would combine investments in manufacturing and advanced industries with what would be the most aggressive spending yet by the US to reduce emissions and combat climate change. It would spend heavily on infrastructure improvements, clean energy deployment, and the development of other “high-growth industries of the future” like 5G telecommunications. It also includes money for rural broadband, advanced training for millions of workers, and 1 mln affordable and energy-efficient housing units. Documents suggest it will include nearly $1 trillion in spending alone on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector.

Decree on Scope 3 – The US Securities and Exchange Commission has directed oil companies ConocoPhillips and Occidental Petroleum Corp to hold shareholder votes on far-reaching new emissions targets, the Financial Times reported on Saturday. The SEC denied requests from both oil companies that they be allowed to throw out shareholder motions that would force them to lay out detailed plans for cutting their Scope 3 emissions, the FT report added. (Reuters)

Water works – Installing solar panels over California’s network of water canals could save the state an estimated 63 bln gal (238 bln L) of water and produce 13 GW of renewable power every year, according to a feasibility study published in Nature Sustainability. California moves more water than any other system in the world, with 75% of the state’s available water in its northern third and the southern two-thirds accounting for 80% of the state’s demand. Covering the canals with solar panels would reduce evaporation by shading the canals from the sun (along with the co-benefit of reducing canal-choking plant growth) and the cooling effects of the water could boost solar panel efficiency. The final third of this win-win-win is the land elsewhere that won’t need to be covered by a solar farm, Michael Kiparsky, director of the Wheeler Water Institute at the UC Berkeley School of Law, told Wired. (Climate Nexus)

Unwilling to change – Members of Canada’s Conservative Party this weekend rejected a proposed change to their policy book that would recognise that “climate change is real”, hours after a plea from the party leader that the official opposition party would have to embrace change. In a virtual policy conference, 54% of delegates on Saturday voted against a proposal to update the policy book by adding that “climate change is real” and that the party is “willing to act” on it, according to results posted online. The vote came just a day after party leader Erin O’Toole told fellow Conservatives they must “change” if they are to expand the party’s base, adding that members can no longer “ignore the reality of climate change” if they hope to oust the minority government of PM Justin Trudeau in possible snap elections in the coming months. (Al Jazeera)

EMEA

Club, not CBAM – The EU should create a “climate club” with other large emitters instead of unilaterally setting up carbon border adjustment mechanisms (CBAMs), the Scientific Advisory Board to the Federal Ministry for Economic Affairs and Energy (BMWi) has said. This would help ensure GHG reductions, avoid carbon leakage, and create a more level playing field for Europe’s industry. If the EU were to introduce a CBAM that puts a charge on imports from countries with lower CO2 costs, direct carbon leakage could be prevented, but indirect emission leakage would still occur, researchers Klaus Schmidt, professor at the University of Munich, and Gabriel Felbermayr, professor at the University of Kiel and president of the Kiel Institute for the World Economy (IfW) said at a press conference. In their report “A CO2 border adjustment as a building block of a climate club”, they suggest instead that the EU teams up with the US and other large emitters like China to introduce a common minimum CO2 price within the “club” and a uniform carbon border adjustment. “To achieve greenhouse gas reductions, we need CO2 prices of €100-150 per tonne in the next 10-15 years. Carbon border adjustment is the prerequisite for creating the best incentives within the climate club to switch to low-CO2 production,” Felbermayr said. Creating such a club with all the negotiations necessary would clearly take longer than the EU unilaterally introducing a carbon border tax, which could be operational as soon as 2023, Felbermayr added. But with the US under the new Biden administration thinking about a national CO2 price, accompanied by their own CBAM, now would be the time to approach them “urgently”, he said. “Establishing a climate club takes longer, but the unilateral solution may have no effect on global warming,” Felbermayr said. (Clean Energy Wire)

Last one to leave… – France’s EDF will shut its West Burton A coal plant at the end of September next year, the company’s last coal station in Britain. The swift reduction of stations burning coal in the UK has helped the country cut its emissions faster than any other rich nation since 1990. The country looks to be on track to fulfil its goal of phasing out the fossil fuel completely from 2024, Bloomberg reports. Coal is still used to meet peak demand in winter and two units at West Burton A will be available next winter, according to EDF. With the final coal unit at the Drax power station shutting this month, that will leave just one station remaining in England and one in Northern Ireland. EDF has been trying to find a buyer for its West Burton B natural gas-fired station as it focuses on nuclear and renewables.

V-air-iable carbon tax – Sweden plans to rejig take-off and landing fees for aircraft so that they correspond to the amount of GHG emissions from different types of plane and fuel, the government said on Monday. The plan would mean lower fees for newer, more efficient aircraft or those using biofuels and would cover both passenger and freight flights to and from Arlanda airport in Stockholm and Landvetter in Gothenburg, the government said, adding the move would be a world’s first. The government said it would leave it up to the airports and the airline companies to agree how the system will work, but that the government was prepared to regulate if that failed. Air travel by Swedes was responsible for around 10 MtCO2e in 2017 – around 1.1 tonnes per individual, research from Chalmers University of Technology showed. (Reuters)

ASIA PACIFIC

More money – The South China Morning Post reports comments made by Yi Gang, governor of the People’s Bank of China, at a closed-door session at China Development Forum over the weekend. Yi said that the target of reaching peak carbon emissions before 2030 and becoming carbon neutral by 2060 had raised new and higher demands for the bank. He estimated that it would need hundreds of trillions of yuan to fund the programme and the government could only cover a small proportion. (Carbon Brief)

VOLUNTARY

Xpansiv expansion – Spot environmental commodities exchange and market data firm Xpansiv has bought OTX, an Anglo-Italian market platform for compulsory stockholding obligations – government-imposed oil product storage mandates – and renewable fuels. The companies believe the deal will benefit their big-emitting customers address their exposure to climate risk via a platform that will incorporate conventional and bio-based fuels.

SCIENCE & TECH

Fuel cell future – Swiss startup Inergio has unveiled a prototype for a lightweight, eco-friendly, high-performance fuel cell that could, in the future, lead to miniature hydrogen fuel cells, H2 View reports. Despite the fuel cell’s size, which measures 25 cm long by 14 cm high and wide, Inergio says it can successfully supply 25W when there is no access to a power grid and hydrogen.

Endless summer – Summers are already about 20% longer than they used to be, The Guardian reports, and if the climate crisis continues unabated then northern hemisphere summers could cover nearly half of the year by 2100, making them more than twice as long as they were in the 1950s. And unlike their counterparts of the 1950s, future summers will be more extreme, with heatwaves and wildfires more likely. Researchers used historical climate data to measure how much the seasons have changed already. They defined summer as the onset of temperatures in the hottest 25% for that time period and winter as the onset of the coldest 25% of temperatures. Their results, published in Geophysical Research Letters, show that the average northern hemisphere summer has grown from 78 to 95 days between 1952 and 2011, while winter has shrunk from 76 to 73 days. Spring and autumn have contracted too. Using climate change models, they were able to show that even bigger changes are to come, with northern hemisphere summers lasting an average of 166 days by 2100, squeezing out all the other seasons and shrinking winter to just 31 days. The Mediterranean region and the Tibetan plateau are projected to experience the greatest changes, but far-reaching impacts on agriculture, human health and the environment will be felt everywhere.

AND FINALLY…

Glas-gouged – Delegates visiting Scotland for the COP26 climate summit are being asked by the UK government’s official accommodation provider to pay £12,000 to stay in a small windowless hotel room for the summit’s duration. According to a report by The Scotsman, the official hotel portal for the UN gathering is charging visitors up to £888 ($1,230) per night for downmarket budget accommodation where the rate is usually as low as £50. With delegates forced to book a minimum 12-night stay and pay their entire bill upfront, it has prompted warnings that the “eye-watering” costs will dissuade delegations from poorer nations and NGOs from attending COP26. The government has also been accused of sanctioning a “monopoly” over the provision of hotel rooms in and around Glasgow through MCI Group, its “official housing agency” for COP26. It has not disclosed the value of the contract with the firm, which is based in Switzerland and controlled by Roger Tondeur, a high-ranking poker player based in Morocco, according to Companies House records. The government said delegates were free to “book independently” instead of using the official COP26 hotel portal, despite the fact the portal itself says delegates should only use it to make bookings. While the coronavirus pandemic has impacted on planning for the rescheduled summit, organisers are still working towards an in-person event in November.

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