CP Daily: Monday June 21, 2021

Published 01:07 on June 22, 2021  /  Last updated at 01:07 on June 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

FEATURE: Europe’s most valuable startup seeks climate path beyond offsetting

Swedish payments firm Klarna has set out climate plans to invest in carbon-cutting projects without offsetting, a move some say assuages integrity concerns while supporting impactful activities at scale.

IN MEMORIAM

COVID claims life of “beloved and honourable” California carbon market economist

A respected and admired economist covering California’s carbon market has passed away after falling ill with the coronavirus.

VOLUNTARY

VCM Report: CORSIA-eligible credit values rise, CME Group announces nature-based futures contract launch

Prices for CORSIA-eligible voluntary emissions reductions (VERs) ticked up once again this week, while US-based exchange CME Group announced it will launch a nature-based carbon offset futures contract this summer.

JP Morgan lays out carbon offset push with forest company acquisition

JP Morgan Asset Management announced the purchase of a forest management and timberland investing company on Monday, with the New York-headquartered financial services firm seeking to become an “active participant” in growing carbon credit markets.

ASIA PACIFIC

South Korea schedules KAU auction for June 25 despite oversupply

South Korea will auction off over 5.5 million CO2 allowances this Friday after previously suspending the sale, it announced Monday, sending the KAU price to its lowest level since Oct. 2015.

Australian carbon conference postponed over escalating COVID situation

The Carbon Market Institute has postponed its annual Australasian Emissions Reduction Summit, originally scheduled to be held Thursday and Friday this week, due to the escalating COVID situation in Sydney and increased travel restrictions, it said Monday.

AMERICAS

Speculators’ WCI allowance holdings rise toward 100 Mt, CFTC data shows

Speculators’ California Carbon Allowance (CCA) positions inched closer to 100 million over the prior week, as allowance prices under the linked WCI programme peaked at a fresh all-time high amid new financial interest, according to US Commodity Futures Trading Commission (CFTC) data published Monday.

California gasoline consumption hits 14-month high in April as demand nears pre-COVID levels

California fuel usage continued to edge back towards pre-pandemic levels in April, as monthly gasoline demand rose to its highest in 14 months, according to US Energy Information Administration (EIA) data released Monday.

EMEA

Euro Markets: EUAs lift again as focus turns to options expiry

EUAs gained for a second straight session on Monday, climbing towards €53 as traders braced for a volatile spell ahead of options expiry.

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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

Rocken’ chair – The Rockefeller and Ikea foundations on Monday unveiled a $1 bln initiative to reduce 1 bln tonnes of global emissions and deliver clean energy to 1 bln people worldwide who lack electricity access — and they hope it catalyses vastly more outside capital. The new platform will be housed in the RF Catalytic Capital division that Rockefeller launched last year, with the goal of unlocking finance for areas like micro-grids and off-grid renewable power. While the initial $1 bln on its own is nowhere near the scale needed to sustainably expand global access, the Financial Times reports that the effort hopes to attract $10 bln in additional funds this year from international development agencies, before opening up to institutional investors. (Axios)

EMEA

Another climate ruling – Belgium’s failure to meet climate targets is a violation of human rights, a Brussels court has ruled, in the latest legal victory against public authorities that have broken promises to tackle the climate emergency. The Brussels court of first instance declared the Belgian state had committed an offence under its civil law and breached the European Convention on Human Rights by not taking all “necessary measures” to prevent the “detrimental” effects of climate change. The legal victory follows similar rulings in the Netherlands, Germany, and France, where judges have condemned governments for inadequate responses to the climate crisis or failing to keep their promises. But judges rejected the plaintiff’s – Belgian NGO Klimaatzaak – demand that the courts should enforce tough new carbon-cutting targets on the state, saying this would breach the separation of powers. (Guardian)

Ring the alarm – The European Commission last week published an updated methodology to assess which gas infrastructure projects will be eligible to receive EU funding, triggering warnings by environmental groups. Last Tuesday, Commission published a document outlining the methodology to assess gas projects applying for EU funding. Energy infrastructure projects that make it onto the bloc’s priority list – known as projects of common interest (PCI) – are able to gain access to EU money and faster permitting. Some 74 gas projects have applied to be on the list and the current methodology could see many of them accepted, according to lawmakers and NGOs, who have flagged concerns about a lack of barriers to prevent gas projects from seeking favoured status. (Euractiv)

Farm fresh – The EU’s huge farming subsidy programme is failing to rein in GHG emissions, despite €100 bln of such subsidies being labelled as climate spending since 2014, the bloc’s watchdog Court of Auditors has said in a report. The auditors said the new 2021-27 policy should incentivise emissions reductions from livestock and fertilisers, and pay farmers to restore drained land so it can absorb and store CO2. (Reuters)

Sponge plunge – Swedish partners SSAB, LKAB, and Vattenfall say they have now produced the world’s first hydrogen-reduced sponge iron at a pilot scale, a key technological breakthrough in their HYBRIT initiative that captures around 90% of emissions in conjunction with steelmaking in what they claim to be a decisive step on the road to fossil-free steel. The facility aims to be first to market, in 2026, with fossil-free steel at an industrial scale. (International Mining)

No Swiss miss this time – The Swiss government on Friday proposed binding rules to boost energy production from hydropower and other renewable sources and limit energy consumption through 2035 and 2050. It wants to add 2 TW of climate neutral electricity production by 2040, to be financed by a winter surcharge. Under the government’s “Energy Strategy 2050,” it plans to increase production of energy from renewables and hydro generation as it phases out nuclear energy. It said it would now seek to make targets binding in order to foster a secure environment for investments into renewables. The proposals come after Swiss voters last Sunday rejected a new law containing measures to help the country reach its Paris Agreement goal. (Reuters)

ASIA PACIFIC

Climate action, Australian style – Michael McCormack, leader of Australia’s junior partner in the governing Coalition, was removed from his position Monday after a challenge from former leader Barnaby Joyce, reports RenewEconomy. The spill came as key National MPs – loyal backers of the coal industry – had accused McCormack of not being sufficiently opposed to Prime Minister Scott Morrison’s climate policy, and hints that the country might be about to accept a net zero emissions target by 2050.

Done at last – China over the weekend was added to the list of 120 nations that have ratified the Kigali Agreement, which obligates China to reduce HFC consumption 80% below a 2020-22 baseline by 2045, reports Cooling Post. HFC is a significant source of GHG emissions in China, and reducing them earned Chinese facilities tens of millions of UN-issued carbon credits in the 2000s and early 2010s, before they were ruled eligible in emissions markets worldwide.

AMERICAS

Fuel focus, part I – Billions of dollars in federal investments and tax credits to boost demand for biofuels will be part of two bills that Democratic lawmakers will introduce to the US Congress, two sources familiar with the plans told Reuters. Congress members from rural states will introduce bills in coming weeks seeking federal funds to add more high-biofuel blend pumps at retail stations and tax credits for automakers that put more “flex-fuel” vehicles on the road. President Joe Biden was expected to give an update on Monday on whether the White House will accept a pared-down infrastructure bill negotiated by bipartisan group of lawmakers. If that happens, the sources said, the biofuels bills could be rolled into a massive spending bill with economic priorities Biden omitted from the infrastructure talks.

Fuels focus, part II – Canadian Minister of Natural Resources Seamus O’Regan on Monday launched the C$1.5-bln Clean Fuels Fund with a call for proposals that increase the country’s capacity to produce such products. The fund supports building new or expanding existing clean fuel production facilities, including hydrogen, renewable diesel, synthetic fuels, renewable natural gas, and sustainable aviation fuel. It will also establish biomass supply chains to improve logistics for the collection, supply, and distribution of biomass materials, such as forest residues, municipal solid waste, and agriculture crop residues, as well as the development of essential codes and standards. The call for proposals is open until Sep. 29.

AND FINALLY…

Sage advice – Several of the world’s leading scientists plan to launch a rapid-response independent expert group this week to advise, warn, and criticise global policymakers on a monthly basis online about the climate and nature crises. The new body, called the “Climate Crisis Advisory Group”, will be chaired by the former UK chief scientific adviser Sir David King. The group comprises 14 experts from 10 nations and every continent. (Guardian)

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