CP Daily: Wednesday April 14, 2021

Published 00:43 on April 15, 2021  /  Last updated at 00:46 on April 15, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

EU presidency holder Portugal floats compromise to try to unblock negotiations on Climate Law

EU presidency holder Portugal is proposing to cap the carbon removals that can be used to meet a strengthened 2030 emissions target, according to documents seen by Carbon Pulse, in a compromise designed to unblock stalled negotiations on the bloc’s Climate Law.

ASIA PACIFIC

China carbon market faces surplus of 1.56 bln allowances for 2019-20, analysts find

China is likely to have oversupplied its national emissions trading scheme by as much as 1.56 billion allowances for 2019 and 2020, pushing the fair value of permits in the market to zero.

South Korea postpones carbon auctions until June

South Korea has postponed its scheduled CO2 allowance auctions for April and May amid the lowest secondary market KAU prices in more than five years, shifting the volume to the June sale just weeks ahead of the annual compliance deadline.

VOLUNTARY

Shell, C-Quest ink deal to generate 60 mln VERs from African cookstoves

US-based offset developer C-Quest Capital on Tuesday announced it signed an agreement with oil major Shell to fund the generation of more than 60 million verified emission reductions (VERs) from cookstoves in Africa, with even more supply set to emerge.

Corporate net zero commitments incrementally improving but still “stagnant” -analysis

Companies’ net zero commitments are becoming more robust, but still vary widely by sector and do not demonstrate a clear pathway to decarbonisation by 2040, according to analysis published Tuesday.

AMERICAS

Dominion Energy argues RGGI allowance approach is “prudent” as it carries short position into Q2

Virginia utility Dominion Energy backed its auction-focused approach to RGGI compliance amid criticism about failing to account for long-term CO2 abatement trends, while the company disclosed it held a small shortage in the regional power sector carbon market through Q1, according to public documents.

California mints 260k new offsets with DEBs-eligible ODS projects netting the bulk

California regulator ARB issued more than 260,000 new offsets this week, with the ozone-depleting substance (ODS) protocol accounting for the majority of these and with all qualifying as providing direct environmental benefits to the state (DEBs), according to data published Wednesday.

LCFS Market: California credits inch back from recent plunge

California Low Carbon Fuel Standard (LCFS) credit values edged above $180 this week after suffering their greatest losses since the onset of the COVID-19 pandemic, while market participants questioned how much further credit prices could rise going forward.

Canadian ETF provider seeks approval for carbon neutral North American blue chip index funds

A Canadian ETF provider has applied to introduce a series of funds that track major North American equity indexes while offsetting a portion of the emissions of the constituent companies.

EMEA

EU gas grid operators set vision for 2040 hydrogen network roadmap

Some 23 national gas transmission system operators (TSOs) from 21 European countries have joined an initiative setting a roadmap for a renewable and low-carbon hydrogen pipeline network by 2040 that mostly repurposes existing gas infrastructure.

EU Market: EUAs fail to hold above €44 following weaker auction, as investor bullish bets and participant numbers rise

EUAs twice rose back above €44 on Wednesday, but a challenge to this week’s record levels was beaten back after a weaker auction and faltering equities, while trading data showed that investors’ net long futures positions rose and the number of market participants surged to a new record.

France’s Saint-Gobain launches employee-led internal carbon fund to cut CO2, invest in new projects

France’s Saint-Gobain has launched an internal carbon fund to incentivise employees to cut the building materials manufacturer’s emissions, while monetising some of those actions to fund new abatement initiatives within the firm.

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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

In memoriam – Paul Oquist, a US-born climate diplomat for Nicaragua, has died. Famous for objecting to the adoption of the Paris Agreement, Oquist nonetheless continued to engage with the UN process and served on the board of the Green Climate Fund, Climate Home reports. The Nicaraguan president’s office said that Oquist died on Monday night. Local media reported the cause of death was pulmonary embolism, a common complication of severe COVID-19 infection – although no positive diagnosis of the virus was made. “Paul Oquist Kelley served the people, the families, all Nicaraguans with love, faithfulness, commitment and untiring bravery,” president Daniel Ortega said in a statement on Tuesday. Climate watchers have described him as a “fighter for justice” and a  “complex figure in global climate negotiations”, with a sharp, analytical mind.

EMEA

Fossil subsidies no more – Seven European countries – France, the UK, Germany, the Netherlands, Denmark, Spain, and Sweden – will stop subsidising fossil fuel projects elsewhere in the world in a bid to reduce emissions, French economy minister Bruno Le Maire has announced. The leading nations pledged to halt public subsidies to oil and gas projects abroad, while financing sustainable projects and being transparent about their subsidies, said Le Maire, citing the EU’s commitment to carbon neutrality by 2050. (Montel, $)

Tug of war – Several dozen MEPs, on the initiative of Polish lawmakers Jerzy Buzek and Bogdan Rzonca, wrote a letter to urge the European Commission not to ignore the role of natural gas in the energy transition. The letter, leaked by Euractiv, called for the Commission to set the proposed emission performance standard – currently at 100g CO2/kWh – at a “technically feasible” level for state of the art gas generation and also called for the “do no significant harm” benchmark to be set at a “realistic” 380g CO2/kWh. When it comes to the emissions threshold for hydrogen production, the letter calls on the Commission to be technology neutral. In contrast, socialist MEPs Simona Bonafe and Paul Tang sent a separate letter voicing concerns around the classification of investments in certain gas plants and nuclear as ‘green’.

Bad sign – The EU’s top environment official told Brazil on Wednesday that the South American country’s updated climate pledge “sends a bad signal” by only committing to reaching net zero carbon emissions by 2060. Like most of the world, Brazil late last year submitted an updated NDC under the Paris Agreement, but the country largely maintained its previous targets while adding the 2060 pledge. The EU and US have vowed to eliminate net emissions of all GHG by 2050, while top emitter China is targetting 2060. “The failure to increase ambition in the updated NDC submitted by Brazil in December 2020 is a missed opportunity and sends a bad signal,” EU Environment Commissioner Virginijus Sinkevicius told top Brazilian officials on Wednesday. “The EU and the international community are expecting Brazil to show a much higher level of ambition,” he said, adding that the pledge should be as close to 2050 as possible. Brazilian Foreign Minister Carlos Franca defended the updated pledge, saying it affirmed the country’s commitment to Paris. (Reuters)

Made for trade – Germany’s pro-business Free Democratic Party (FDP) plans to enter the upcoming election campaign with a pledge to extend emissions trading as the main tool for fighting climate change. The party wants to extend trading to all sectors and other geographic areas as quickly as possible in order to protect the climate “in a market-based and scientifically secure manner,” the party’s draft manifesto says. The FDP programme argues that “many of the bans, subsidies and support measures adopted to reduce CO2 emissions in transport do not lead to a reduction, but only to rising costs and market distortion. Only emissions trading guarantees a cap on total climate gas emissions.” Germans vote on Sep. 26, with the FDP currently polling at around 9%.  However, the party hopes to achieve a “strong double-digit result” that could rule out both a coalition between Angela Merkel’s Conservatives and the Greens and an alliance between the Social Democrats, Greens, and the Left party. (Clean Energy Wire)

AMERICAS

Alive by ’25 – Colombia is aiming to achieve full operation of its emissions trading scheme by 2025, a government official confirmed Wednesday. Speaking at a webinar hosted by the World Bank Partnership for Market Readiness and ICAP, the Colombia Ministry of Environment and Sustainable Development’s (Minambiente) Adriana Gutierrez confirmed the timeline, building on other government officials last year saying that the ETS pilot phase may not occur until 2023 or 2024. Minambiente is expected to publish its design proposal for the general regulation of the carbon market this year.

One-party push – US Energy Secretary Jennifer Granholm said Tuesday that President Joe Biden’s administration is committed to delivering a clean energy standard to boost carbon-free energy, suggesting there’s a way Congress could pass one without Republican support. “So much of it depends on how it is crafted,” Granholm told the Bloomberg New Energy Finance energy conference, adding that it “remains to be seen” whether the clean energy standard – a centerpiece of Biden’s climate agenda – could be passed through the Senate by regular order with 60 votes, or through the Senate’s reconciliation process, which requires just 51. But Granholm said she believes there are “versions” of it that would “work for Senate reconciliation rules,” which would enable passage along party lines. The decision would be up to the Senate parliamentarian, who interprets the chamber’s rules. (E&E News)

Fee meetings – The conservative-backed Climate Leadership Council (CLC) is organising a series of meetings this week for corporate leaders to advocate its carbon fee and dividends proposal directly to lawmakers. More than a dozen Democratic and Republican senators will meet with business leaders from companies including Exxon Mobil, GM, IBM, Procter & Gamble, and several others to discuss the measure. The CLC, founded by two former Republican secretaries of state, would impose a carbon tax beginning at $40 per tonne, increasing 5% every year, and return the revenue to households through equal quarterly payments. (Politico)

Frontrunning forum – House Republicans plan to hold a three-day forum over Apr. 19-21 to present their ideas on addressing climate change and counter a climate summit event President Biden is hosting on Apr. 22-23 with the world’s top emitters. House Republicans will roll out a counter agenda to promote clean energy innovation, but won’t include a specific mandate or target to cut emissions. As many or more than 30 members from across the Republican ideological spectrum will participate in the House forum, including members from the conservative Freedom Caucus and centrist Tuesday Group, the GOP leadership aide said. (Washington Examiner)

Bring on Brenda – Brenda Mallory, President Biden’s nominee to head the White House Council on Environmental Quality, won Senate confirmation on Wednesday. In her new role, Mallory will oversee an office that has already started reviewing changes the Trump administration undertook to relax environmental permitting under the National Environmental Policy Act for large projects, such as highways and bridges. Mallory was approved by a 53-45 vote, and will be the CEQ’s first Black leader. (Bloomberg Law)

ASIA PACIFIC

Getting to it – Malaysian Prime Minister Tan Sri Muhyiddin Yassin has outlined six main approaches to climate change that the government expects will help cut emissions by 165 MtCO2e over the next decade, reports the Malaysian Reserve. Details are yet to emerge, though a carbon pricing mechanism was one of the six, and specifics will be worked out over the coming months.

VOLUNTARY

Cow credits – Swiss-British Agritech firm Mootral on Wednesday launched the world’s first carbon credits generated from cattle burp emission reductions. Its cattle feed supplement, Mootral Ruminant, can cut the amount of methane cows release by up to 38%, while increasing yield naturally and enabling production of climate-friendly milk and beef, the company said in a press release. Mootral is also seeking a further $2.5 mln in investment to close the current seed funding round to expand its cattle feed supplement globally.

Blue(source) times two – DTE Energy’s Gas Company on Wednesday announced a partnership with North American offset project developer Bluesource on the Greenleaf Improved Forest Management project in Michigan’s upper peninsula, the utility announced. The partnership is part of DTE’s Natural Gas Balance, a voluntary customer programme to neutralise GHGs through a combination of carbon offsets and renewable natural gas. The company did not disclose the volume or price it will pay for these offsets. Additionally, Bluesource on Wednesday partnered with Arva Intelligence to provide a scalable, geospatial data platform to quantify agriculture-based carbon offsets and ecosystem service benefits.

SCIENCE & TECH

Hydrogen boom – The global hydrogen market will reach $197 bln by 2030 from $136 bln in 2019, representing a 4.3% compressed annual growth rate between 2020 and 2030, according to the most recent Hydrogen Market Research Report. The biggest growth will come in on-site generation and not transportation, the report said.

Hydrogen connection – Electric semi-truck developer Nikola has formed a partnership with commercial vehicle maker IVECO and natural gas distributor OGE to set up a hydrogen pipeline and fuel station system in Europe that’s needed to power fuel-cell big rigs, Forbes reports. The companies said the goal of their collaboration is to improve hydrogen availability and hold down the cost of distributing and storing carbon-free fuel. Nikola will install fueling stations for customers that are tied into the distribution network.

AND FINALLY…

Pot-ent reductions – Aeriz, the largest aeroponic cannabis operator in the United States, and forest carbon credit marketplace Pachama on Wednesday announced a partnership to offset the nationwide emissions of Aeriz. In a press release, Aeriz said it is working with Pachama on future offset projects as marijuana company expands operations in California, Illinois, and Arizona.

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