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TOP STORY
EU plans new social fund from expanded carbon market, says EC climate chief
The European Commission will create a ‘climate action social fund’ with revenues from an expanded carbon market if it decides to bring emissions from vehicles and buildings under the EU ETS, the bloc’s climate chief Frans Timmermans said on Wednesday.
INTERNATIONAL
Shell to “accelerate” energy transition after court ruling, says CEO
Shell will “accelerate” its energy transition strategy and will likely take “some bold but measured steps” in the coming years to reduce emissions, its CEO said on Wednesday, after a Dutch court ruling ordered the oil major to substantially cut greenhouse gases by the end of the decade.
EMEA
Euro Markets: EUAs jump nearly 4% on supportive energy, technicals as bulls re-emboldened
EU carbon prices rose more than €2 on Wednesday to top €54 for the first time in two weeks, as bullish technicals, a strong auction, and a supportive energy complex helped push prices back towards record levels.
European Commission joining Czech lawsuit against Poland over coal mine
The European Commission is joining a lawsuit filed at Europe’s highest court by Czechia against Poland over an open-pit lignite mine near the two countries’ border.
Veteran carbon market analyst to join Andurand Capital
A veteran carbon market analyst is to join hedge fund Andurand Capital Management, where as head of climate research he will advise on the launch of new environmentally-focused investment vehicles.
AMERICAS
New York ISO seeing increased power demand, higher generation from carbon-emitting sources
New York is seeing rising generation from carbon-emitting sources amid an uptick in electricity demand, with the trend coming as RGGI emitters ramped up allowance purchases at last week’s quarterly auction, data shows.
California offset issuances continue to languish, as Quebec credits top 1 mln
California compliance offset generation maintained a recent sluggish trend this week, while Quebec saw its credit issuances surpass the 1-million mark for the first time, according to government data released Wednesday.
ASIA PACIFIC
NZ Market: NZUs soar to fresh highs as climate commission doubles down on higher auction price settings
New Zealand carbon allowances soared past NZ$40 ($28.81) to new record high levels on Wednesday, following the release of the independent Climate Change Commission’s final advice to the government on the country’s carbon budgets out to 2035.
Impact fund takes majority stake in Australian offset developer
Melbourne-based Tiverton Agriculture Impact Fund has taken a majority stake in an Australian offset developer and carbon advisory 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
CONFERENCE
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INTERNATIONAL
No one left behind – As the world’s richest economies invest in new and cleaner power supplies, it’s vital for everyone that poorer nations don’t get left behind. Investments in clean energy in these economies will need to surge to over $1 trillion a year by the end of the decade in order to meet global climate goals, up from less than $150 bln in 2020, according to a new report by the International Energy Agency. Already, developing and emerging markets have seen annual investments in the energy sector fall around 20% since 2016. It’s a stark contrast to European countries and the US that pioneered the burning of fossil fuels, but are now able to spend a lot more to cut their carbon footprints. (Bloomberg)
Burn brighter – A new analysis from BloombergNEF found the outlook for electric vehicle deployment is “getting much brighter,” but it’s off pace for meeting aggressive mid-century targets for cutting CO2 emissions from transportation. The analysts project that sales of electric passenger vehicles will rise to 14 mln annually in 2025 from 3.1 mln in 2020, equating to roughly 16% of new car sales in 2025. From there, they break the analysis into two segments: an “economic transition scenario” (ETS) that estimates market evolution under existing policies at the time, and a new “net zero scenario” that models what’s needed to meet 2050 transportation decarbonisation targets. The report found two- and three-wheeled vehicles and buses are almost on track for the net-zero pathway, while projected medium- and heavy-trucks deployment, meanwhile, is nowhere near what’s needed. (Axios)
EMEA
Leakage lock-up – US President Joe Biden will meet EU leaders Ursula von der Leyen and Charles Michel on June 15, where among other things they are set to agree to closely coordinate to promote robust climate measures, address carbon leakage risk, and cooperate on sustainable finance, including by providing the private sector with usable tools and metrics, according to a draft communique seen by Reuters.
Collision course – The European Commission’s inter-service consultation over the measures for shipping included in the “Fit for 55” legislative package has resulted in a huge clash between DG Move and DG Clima, Euractiv reported. Particularly, sources close to the issue said there are major inconsistencies between the two DGs regarding the EU ETS and the FuelEu Maritime proposals currently circulating. DG Move wants ships to burn fuel approved under the EU standards since the very beginning of their trip towards Europe accompanied by a system of credits applied for all incoming and outgoing ships. Critics suggest that such a move would bring Europe on collision course with China and the US at the IMO.
Hike for heating – Germany should immediately increase its domestic nEHS carbon price for buildings and transport and better support renewables to initiate the phase out of fossil gas in buildings heating, said think-tank Green Budget Germany, Clean Energy Wire reported. The organisation said this would help avoid billions of euros in climate-related damages, and added a price of €215/tonne on CO2 in the nEHS would be necessary to cover all costs caused to society by emissions and the resulting climate change, and should be reached by 2030. Read Carbon Pulse’s latest on the nEHS here.
AMERICAS
Throwing away the Key – Oil pipeline company TC Energy on Wednesday said it has terminated the $9 bln Keystone XL pipeline project, months after US President Joe Biden revoked a key permit in a blow to Canada’s oil sector. Keystone XL, which would have been under construction this year, was expected to carry 830,000 barrels per day of Alberta oil sands crude to Nebraska. But opposition from US landowners, Native American tribes, and environmentalists had delayed the project for the past 12 years, with Biden pledging to scrap the permit, which he did on his first day in office. (Reuters)
Tarred and bettered – Meanwhile, Canadian tar sands producers said on Wednesday they would form an alliance to achieve net zero emissions from their operations by 2050, as the cash-rich firms come under pressure to meet the country’s goal on energy transition. The alliance, which includes Canadian Natural Resources, Cenovus, Imperial Oil, MEG, and Suncor, will work with the federal and Alberta governments to help Canada meet its climate goals. The companies said they would look to link oil sands facilities in the Fort McMurray and Cold Lake regions to a carbon sequestration hub, and use CCS technology as well as clean hydrogen, fuel switching, and other methods to reduce emissions. (Reuters)
OBPS amendments – The Canadian environment ministry has published proposed amendments to the ‘backstop’ output-based pricing system (OBPS). Environmental law firm Resilient LLP notes the proposed amendments seek to maintain the incentive to reduce GHG in the OBPS and increase the accuracy of the values output and GHG emissions and emissions limits calculated by covered facilities. In addition, the proposed amendments are an attempt to clarify certain provisions of the regulations to ensure compliance is consistent with the policy intent of the OBPS and federal Greenhouse Gas Pollution Pricing Act (GGPPA). The public comment period is open until July 5.
Joe-ing for it – White House National Climate Advisor Gina McCarthy acknowledged in an interview with Politico that some climate change provisions, such as a clean energy standard, might ultimately fall out of eventual infrastructure legislation, but that President Joe Biden’s administration would be “going for it” to deliver the loftiest climate package possible. “While every piece like a clean electricity standard may not end [up] in the final version, we know that it is necessary, we know that the utilities want it, we are going to fight like crazy to make sure that it’s in there. And then we’re going to be open to a range of other investment strategies,” she said. The White House said Tuesday it will continue to negotiate with a bipartisan group of senators. But barring a breakthrough, Democrats are hinting they’ve changed strategies : They may now pass one package of bipartisan measures and push through more controversial provisions, like ones on climate change, via reconciliation.
Somewhat stringent – General Motors on Wednesday told the Biden administration that it would agree to tighter federal fuel economy and tailpipe pollution rules, along the lines of what California has already agreed to with five other auto companies. The move is a step by the nation’s largest automaker away from its position during the Trump administration, when GM’s chief executive, Mary Barra, asked Trump to relax Obama-era auto pollution rules. But Barra stopped short of endorsing Biden’s desire to fully reimpose or strengthen the Obama-era auto pollution standards, which to date stand as the strongest policies ever imposed by the federal government to fight climate change. And she also asked the administration to augment the federal rules with provisions that would give incentives to auto companies that are investing in electric vehicles, although she did not specify what those incentives should be. (NYT)
Spared change – Mexican President Andres Manuel Lopez Obrador’s (AMLO) Morena party is unlikely to be able to change the constitution to pass fossil fuel friendly energy reforms, after he failed to win a two-thirds majority in the country’s lower congressional house. The reforms would give the state-owned Federal Electricity Commission (CFE) a competitive advantage over private and foreign rivals. Electricity generated by CFE, which predominately comes from burning coal and gas, would be prioritised in the grid over energy from private companies, which is generally cleaner and cheaper and so currently dispatched first. AMLO’s proposed reforms would reverse previous reforms that President Enrique Nieto wrote into the country’s constitution in 2013 so that future governments would find it harder to undo them. In March, a judge ruled that AMLO’s reforms must be frozen until the Supreme Court decides whether they are constitutional. (Climate Home)
ASIA PACIFIC
Peak and cut – Chinalco, one of China’s biggest aluminium producers, on Wednesday pledged to peak its carbon emissions by 2025 and reduce them 40% by 2035, Reuters reports. It becomes one in a growing line of major Chinese corporations to set voluntary targets, just as aluminium production is tipped to be brought into the national ETS next year.
Getting the wallet out – China Development Bank has said it will provide 500 bln yuan ($78 bln) in special loans to help meet “carbon peak and carbon neutrality” goals, as outlined in the 14th five-year plan, according to reports. Of these funds, 100 bln will be made available this year. The lending will primarily be made available to support hydro power in main river basins, coastal nuclear power, wind and solar PV, offshore wind, and heat production, according to this report from the Green Economic Association.
VOLUNTARY
We got the bunk – Vitol Bunkers, the newly established marine fuels brand of commodity trading firm Vitol, has started offering voluntary emissions reductions (VERs) to its customers. The company said its VERs will conform to the highest global standards and be sourced from its existing portfolio and the wider voluntary carbon offset market, with emissions calculated using EU and IMO guidelines. (Ship & Bunker)
The travel 12 – Travel management firm FCM on Tuesday announced a new global carbon credit programme with sustainability consultancy South Pole and plans to offset all company travel retroactive to 2019. Under the initiative, CO2 emissions data can be reported monthly or quarterly, and clients subsequently can choose from among 12 climate action projects to offset these emissions, with options including forestry conservation and restoration and community energy and water programmes. The offsetting price for each project ranges from $3.70 to $15 per tCO2e, and clients can select up to four projects to fit their budget, geographic area and preferred impact categories. (BTN)
Learning to count, take 3 – Singapore-based traders Pavilion Energy on Wednesday announced a 10-year deal with BP to import 800,000 tonnes of LNG annually for the Singapore market, with both parties pledging to strive to co-develop and implement a GHG quantification and reporting methodology to accompany each shipment. Pavilion has previously signed similar deals with Qatar Petroleum and Chevron, but no industry standard for GHG accounting has emerged so far.
SCIENCE & TECH
Solvent green – Drax Group has signed a long-term deal for carbon capture technology with Japan’s Mitsubishi Heavy Industries (MHI), paving the way for negative emissions from its UK plant by 2030, the firms said on Thursday. By applying MHI’s carbon capture solvent at its biomass-fired power plant, Drax could ultimately remove more CO2 from the atmosphere than is emitted across its operations. To reach the Paris climate target of limiting global warming to 1.5 degrees, carbon removal needs to start as soon as possible, Drax’s chief executive Will Gardiner told Reuters. The project also supports thousands of jobs, with MHI planning to locate its core carbon capture and storage team at the company’s European headquarters in London, the firms said.
AND FINALLY…
Moon shot – Texas Rep. Louie Gohmert (R) on Tuesday asked a representative from the US Forest Service if it was possible to alter the orbit of the moon or the Earth as a way of combating climate change, though it was unclear if he was being serious. Gohmert was speaking with Jennifer Eberlien, associate deputy chief of the National Forest System, during a House Natural Resources Committee hearing. “I understand from what’s been testified to the Forest Service and the BLM [Bureau of Land Management], you want very much to work on the issue of climate change,” Gohmert said to Eberlien, adding that a past director of NASA had once told him that orbits of the moon and the Earth were changing. “Is there anything that the National Forest Service, or BLM can do to change the course of the moon’s orbit or the Earth’s orbit around the sun?” Gohmert asked Eberlien. “Obviously they would have profound effects on our climate.” “I would have to follow up with you on that one, Mr. Gohmert,” Eberlien responded. “Well, if you figure out a way that you in the Forest Service can make that change, I’d like to know,” Gohmert added. (The Hill)
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