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TOP STORY
EU’s Greens seek price floor, speculation curbs in carbon market reforms
Greens/EFA MEPs will seek to establish a price floor and additional measures to stabilise prices under the much-anticipated EU ETS reform process kicking off in mid-July, two EU lawmakers said Thursday, also calling for curbs on speculation in Europe’s carbon market.
VOLUNTARY
Banks, financials announce new Singapore-based voluntary offset exchange
Financial services firms DBS and Standard Chartered, the Singapore Exchange, and Singaporean government-owned investment company Temasek on Thursday announced plans for a new exchange for the global voluntary carbon market.
AMERICAS
NA Markets: California allowances soar to near all-time highs, RGGI rises on speculator interest
California Carbon Allowance (CCA) prices rose to near all-time highs this week amid a flurry of speculative activity before the Q2 WCI auction, while RGGI allowances also rose on the secondary market on relatively thin demand.
RGGI emitters unloaded allowances following Q1 auction -report
Regulated entities in the Northeast US RGGI cap-and-trade programme shed carbon permit holdings after the March auction settled far below the secondary market allowance price at the time, a report published Thursday showed.
Green group asks Virginia commissions to reject Dominion’s RGGI rate request
An environmental group has asked the Virginia State Corporation Commission (SCC) to reject utility Dominion Energy’s proposal to recover RGGI allowance costs due to the lack of a least-cost analysis or a prudent procurement strategy, according to documents filed this week.
RFS Market: RINs shrug off report of flat biofuel quotas for 2021-22
US biofuel credit (RIN) values only slightly dropped on Thursday morning following a report that the EPA will keep Renewable Fuel Standard (RFS) biofuel volumes steady for the next two years.
EMEA
European markets: Carbon rebounds as traders bid for return to records
EUAs rose more than €3 on Thursday, clawing back almost half of the 12% losses of the previous two sessions as traders bought on what they expect to a brief dip in a still-bullish market.
Czech utility CEZ sets targets to further reduce coal-fired generation by 2030
Czech utility CEZ presented its climate strategy on Thursday, setting the intention to reduce its share of coal-fired generation to just over a tenth of its generation mix in line with recent output falls.
ASIA PACIFIC
New Zealand commits to reinvesting NZU auction revenue in carbon-cutting projects
New Zealand will use future revenue from its quarterly sales of carbon allowances under its emissions trading scheme towards investing in projects that will further cut greenhouse gases, the government said Thursday as part of its annual budget.
COMMENT
Let’s remove ONLY what we can’t avoid
While carbon removals will play a role in mitigating climate change, we cannot afford to take our focus away from the urgent objective of avoiding emitting in the first place, write Sarah Leugers and Owen Hewlett of Gold Standard.
Offsetting 2.0: how ratings can help avoid a race to the bottom
In order to avoid fungibility becoming a race to the bottom, the voluntary carbon market needs tools that recognise the variation in carbon returns and enables the creation of products that capture this variation, according to Sebastien Cross of BeZero Carbon.
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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
Gee-up you seven – The UK is using its current leadership of the G7 group of major economies to push for mandatory corporate reporting of climate risks, Bloomberg reported, citing people familiar with the matter. Under the proposals, the biggest companies would report annually on their exposure to risks and opportunities in line with 2017 guidelines by the Task Force on Climate-Related Financial Disclosures. The G7 finance ministers meet June 4-5, and while a final communique from the group has yet to be agreed, the UK is pushing the idea as a priority.
Get back in the queue – Poorer nations struggling to access COVID-19 vaccines may make the “moral” choice not to send delegates to November’s UN climate summit in Scotland if others more in need of the doses remain at risk, climate and health experts have warned. Giving COP26 delegates priority in vaccine-short countries would go against the principle of not “jumping the queue”, Ahmed Ogwell Ouma, deputy director of the Africa Centres for Disease Control and Prevention, told journalists in an online briefing. Such a move could dim prospects for success at the high-profile conference, which aims to swiftly ramp up action on climate change as the world veers toward failing on its targets to curb dangerous planetary heating. After negotiations were postponed in 2020, COP26 organisers hope to hold the key gathering in person – but the pandemic has complicated efforts to safely bring tens of thousands of delegates and observers from around the world to Glasgow. If vaccines are required, Ogwell Ouma said African nations might decide delegates would not be “preferentially vaccinated” before others on national priority lists if supplies remained insufficient. (Thomson Reuters Foundation)
Maritime miss – Shipping will fall short of achieving 2050 net zero emissions, the IEA said in a new report. The industry is expected to miss its target “due to a lack of available low-carbon options on the market and the long lifetime of vessels (typically 25 to 35 years)”, it added. This comes despite a growing stream of pledges and commitments from policymakers and industry stakeholders to achieve zero emissions by 2050 in the shipping industry. The IEA now expects emissions from shipping, which was responsible for about 880 Mt of CO2e in 2019, to decline by 6% annually to 120 Mt by 2050. (Reuters)
ASIA PACIFIC
Bad news – China’s CO2 emissions rose 9% in the first quarter of 2021 compared with pre-pandemic levels, driven by a carbon-intensive economic recovery and big hikes in steel and cement output, research showed on Thursday. In the 12 months since China began relaxing COVID-19 lockdowns, total CO2 emissions exceeded pre-pandemic levels by 7%, setting the fastest rate of growth since 2012, said Lauri Myllyvirta, lead analyst with the Helsinki-based Centre for Research on Energy and Clean Air (CREA). Around 70% of the surge was due to increased consumption of coal, he added, with domestic coal production rising 16% YoY in the first three months. China has vowed to cut coal consumption, its biggest source of emissions, but only after 2025. Earlier this month, a study by the Rhodium Group think-tank showed that China’s total 2019 GHGs exceeded those from the whole of the OECD for the first time, with the country’s per capita emissions also now close to those of western nations. (Reuters)
Good news – Separately, China has ordered power transmission firms to connect a minimum of 90 GW of wind and solar capacity to the grid this year, the National Energy Administration said on Thursday, as part of a new policy initiative aimed at meeting its low-carbon targets. The NEA also said it will set targets for the transmission of renewable power rather than the construction of new capacity in a bid to avoid waste and ensure that wind and solar plants can sell all their electricity on the market. China, the world’s biggest emitter, has vowed to increase its non-fossil fuel energy consumption to around 20% of primary energy use by 2025 and to around 25% by 2030. (Reuters)
IEA snub – Government officials from Japan and the Philippines have disputed the IEA’s call for no new fossil fuel investments for the world to be able to reach net zero CO2 emissions by 2050, Reuters reported. The officials said there were many ways to get to net zero, even as the IEA said its pathway was the most technically feasible, cost-effective, and socially acceptable. The head of the Australian Petroleum Production and Exploration Association said the IEA report didn’t take into account future negative emission technologies and offsets from outside the energy sector. Read Carbon Pulse’s readout on the IEA report.
Getting ready for it – Australia’s Woodside Energy and Japan’s Marubeni on Thursday announced an agreement to study the possibility of exporting green ammonia from Tasmania to Asian markets. While it is unclear if the activity will ever go live, it is the latest in a number of hydrogen and ammonia deals between the two countries, as Australia is seeking a role as a net zero exporting power house while Japan will largely import such products to meet its net zero emissions ambitions.
AMERICAS
Risk reduction – President Joe Biden is directing the federal government to develop a strategy to curb the risk of climate change on public and private financial assets in the US, the White House announced on Thursday. The executive order, titled Climate Related Financial Risk, directs National Climate Advisor Gina McCarthy and Director of the National Economic Council Brian Deese to develop a government-wide plan to identify and disclose climate risk on government programmes, assets, and liabilities within the next 120 days. The order also requires Treasury Secretary Janet Yellen, the head of the Financial Stability Oversight Council, to deliver a report on financial risk data related to climate change. (CNBC)
SAF savings – US Democratic lawmakers introduced a bill on Thursday that would create a tax credit for lower-carbon sustainable aviation fuel (SAF). The legislation would impose a tax incentive of up to $2.00 for every gallon produced of SAF, before expiring at the end of 2031. Climate groups, such as the Environmental Defense Fund and the World Wildlife Fund, as well as industry groups, like United Airlines and Airlines for America, support the bill, though it was unclear if it would attract Republican support. (Reuters)
Ms. Orrego goes to Washington – The American Carbon Registry’s Director of Forestry, Jessica Orrego, testified in front of the US Senate Committee on Agriculture, Nutrition & Forestry for its hearing on Federal, State, and Private Forestlands: Opportunities for Addressing Climate Change. The hearing was convened, in part, to discuss opportunities for supporting the growth of forest carbon markets as both a climate solution and a means to generate benefits for different kinds of forest landowners. Orrego delivered three key messages to the Senate committee: first, that a robust market with existing infrastructure including standards, verification bodies, investors and technical experts is already in place; second, that the demand for credits is rapidly increasing and will continue to rise, with US forest owners well-positioned to benefit; and third, that there is no need to start from scratch or reinvent the wheel, as the market and related infrastructure is already in place and is rapidly evolving and expanding to offer more opportunities. Orrego added that “there is an important role for the federal government to play to support the growth and scaling of the forest carbon market by providing capacity building support or through loans … The carbon market is operating already and it is growing rapidly, so we recommend that any role that the government plays complements the carbon market and the existing frameworks.” She also said the market welcomes scrutiny, as the its growth and long-term sustainability depend on integrity. Read the full written testimony.
EMEA
Too little, too late – Germany’s recently revamped Climate Action Law calls for the energy sector to reduce CO2 emissions from 175 Mt to 108 Mt by 2030. To reach that target, the energy sector must accelerate the phaseout of coal, according to a new study by Berlin-based energy market research group Energy Brainpool. “If the phaseout of lignite alone is brought forward to 2029, the envisaged share of renewable energy sources in gross electricity consumption must be increased from 65% to 75% in 2030.” And if the phaseout of hard coal were also brought forward to 2029, the energy sector target could also be achieved with a renewables share of 65%. An early lignite phaseout would require around 11 GW of additional capacity – and around 16 GW with a complete coal phase-out – in order to ensure supply security. This flexibility can be provided by storage technologies, demand-side management, additional gas-fired power plant capacities and network reserve, according to the study. (Clean Energy Wire)
Polish winds – The European Commission approved a €22.5 bln Polish scheme to support offshore wind farms, under EU state aid rules. The aid will be granted in the form of a two-way contract-for-difference premium, during 25 years, but only up to 100,000 full load hours per MW of installed capacity. The scheme, running until 2030, will support Poland’s ambition to develop 5.9 GW of offshore wind by 2030 and up to 11 GW by 2040.
VOLUNTARY
Positive negative – AirCarbon Exchange (ACX), a Singapore-based, blockchain-enabled carbon exchange, has offset its own historical and projected emissions from the date of the company’s inception in 2018 to Mar. 2022, which it said makes it the world’s first carbon negative trading platform. ACX calculated all of the company’s Scope 1-3 emissions from the last three years, and it sourced and retired an undisclosed number of offsets from a VCS-approved Guatemalan clean cookstove project developed by C-Quest Capital.
AND FINALLY…
Greenadder – The creator/screenwriter of film and TV hits including Mr. Bean, Blackadder, Love Actually, and Four Weddings and a Funeral has launched a campaign to make Britain’s £2.6 trillion pensions industry eco-friendly. Richard Curtis’ Make My Money Matter group is spearheading the Green Pensions Charter to push for funds to be invested in appropriate projects to put them “at the heart of the solution” to the climate crisis. Fifty firms and organisations, including retailer IKEA, Octopus Group, Brewdog, WWF, and Oxfam have already signed up. The charter wants pension funds to ensure that their investments are net zero – with GHGs halved by 2030 and eliminated or totally offset by 2050. (Daily Express)
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