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TOP STORY
China emissions trading to start in July, premier says
Trading in China’s carbon market will begin in July, Premier Li Keqiang said Wednesday evening, after the failure to meet the widely touted June deadline had sparked concerns a longer delay might be in store.
EMEA
Brussels mulls full free allocation phaseout by 2035 “at the earliest” -draft
Brussels may propose waiting until 2026 to gradually phase out free allocation of EU carbon allowances for industry and to fully put an end to the handouts by 2035 at the earliest, according to two draft documents on the planned carbon border adjustment mechanism (CBAM) seen by Carbon Pulse.
Free EUA allocation quotas for 2021-25 start to emerge following delays
The European Commission has begun to add EU ETS allocation data for the 2021-25 period to the EU Transaction Log, the database that holds details of all carbon allowance allocations and transactions.
Switzerland to raise domestic carbon tax by 25% following insufficient emissions cuts
Switzerland will raise its domestic carbon tax by 25% next year after its fossil fuel emissions output in 2020 missed the country’s annual reduction targets.
Euro Markets: EUAs lose further ground after rout
EUAs fell another 2.6% on Wednesday to compound the previous session’s big sell-off, with some traders said to opt for unwinding their positions rather than deal with further volatility.
AMERICAS
NA Markets: CCAs leap above $24 on renewed financial interest and lack of sellers
California Carbon Allowance (CCA) prices soared to new records over the first half of the holiday-shortened week as speculative interest remained robust and few sellers appeared, with several traders attributing some purchases to power sector emitters.
RFS Market: RIN prices drop to two-week low as corn weighs
US biofuel credit (RIN) values fell to a more than two-week low on Wednesday on declining corn prices, while federal lawmakers introduced bipartisan legislation to negate a recent Supreme Court decision on Renewable Fuel Standard (RFS) waivers.
ASIA PACIFIC
NZ Market: NZUs hit NZ$46 as race towards cost containment reserve continues
New Zealand carbon allowances added another 1.7% to their value on Wednesday as they rose to NZ$46, just a day after they broke through the NZ$45 level for the first time.
Australia Market Roundup: ACCU issuances, deliveries spike as BlueScope gives up on offset project
Offset issuances and deliveries to the ERF both spiked in the Clean Energy Regulator’s latest data update, while BlueScope Steel has given up on generating any carbon credits from the energy efficiency project at its Port Kembla steelworks.
VOLUNTARY
Global banks partner to launch pilot voluntary offset platform
Four banks based on separate continents have launched a carbon offset platform, joining several marketplaces aiming to boost transparency in the OTC-based voluntary emissions reduction (VER) market.
AXA investment arm acquires voluntary carbon offset platform ClimateSeed
The investment management arm of insurance giant AXA has purchased voluntary carbon offset platform ClimateSeed from BNP Paribas.
S&P Global Platts announces six AI-powered carbon credit indices
Commodity price reporting agency S&P Global Platts on Tuesday proposed to launch six carbon credit indices from next month with Viridios AI that would reflect a wide variety of voluntary emissions reduction (VER) project types and co-benefits.
Climate Action Reserve commences development of US-based biochar offset protocol
California-based offset registry Climate Action Reserve (CAR) kicked off the process of developing a voluntary offset protocol for biochar on Wednesday, as interest grows in sourcing carbon credits from removal-based strategies.
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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
The Argus Live: Carbon Markets and Regulation (15-16 July) conference is a 2-day virtual event that will provide participants with the latest pricing predictions, as well as updates on global policy and regulation within the carbon market. There will also be sessions focusing on the developments and opportunities in the voluntary carbon market. Hear from speakers such as DG CLIMA, EEX, ClearBlue Markets, CF Partners, BASF, Gold Standard, South Pole, Redshaw Advisors and many more. Carbon Pulse readers can receive 15% off their registration fee using the code CARBONPULSE15 at checkout. Register today
INTERNATIONAL
Packed agenda – The UK’s Presidency Programme for COP26 has been unveiled, “to drive forward climate ambition and action against key issues alongside two weeks of intensive climate negotiations in Glasgow,” the government announced Wednesday. Beginning with a world leaders summit on Nov. 1-2, each day will focus on a different theme, from advancing progress on key priorities like clean energy, zero-carbon transport, and protecting nature, to ensuring the participation of women, girls, and young people is at the centre of climate action. Cross-cutting themes like science, innovation and inclusivity will run throughout the programme, as will the need to mitigate climate change, adapt to its impacts, and mobilise public and private finance. Exhibitions and events in the UK-run zones in Glasgow will also feature throughout the programme to showcase progress from the whole of society, governments, businesses, amongst others. The Presidency programme will run alongside the formal negotiations that sit at the heart of the UN summit. This year’s focus will be on closing off the outstanding aspects of the Paris Agreement, including the rulebook for the treaty’s market-based Article 6.
Oslo outreach – Norway will allocate over $1.1 bln over five years towards a climate fund for cutting emissions via deploying renewable energy investments in developing countries, the oil rich government said. The fund will from next year support projects to reduce dependence on fossil-fuels and could mobilise ten times the cash via partnerships with private capital. The support will be in addition to the $720 mln Norway spends per year in climate financing. (Reuters)
EMEA
Cheap? – Germany’s chemical industry has called for massive amounts of cheap green power to help it go carbon neutral. The industry says it needs more than 600 TWh of green electricity per year, more than Germany’s entire current electricity consumption of around 500 TWh, according to its Roadmap 2050. It assumes that the electricity must be made available at a total final price of a maximum €0.04/kWh – less than what energy-intensive companies have been paying in recent years. The document lists the build-up of a hydrogen economy and infrastructure as another key to transformation, as well as carbon capture and utilisation. The German government has previously agreed with a similar paper from the steel industry, Clean Energy Wire reports. Meanwhile, a newly-formed cross-industry alliance is calling for a significantly faster decarbonisation of the building sector through renewable heating technologies and a correspondingly more ambitious energy policy. The Federal Solar Industry Association (BSW), the Federal Association of Heat Pumps (BWP), and the German Energy Wood and Pellet Association (DEPV) have jointly established the Green Heat forum, which aims to reduce the heating sector’s annual CO2 footprint by 3-4 times more by 2030 than today and thus make a significant contribution to the GHG reduction required in the building sector.
Well, cheaper – The UK’s climate targets will cost the government less over the next 30 years than the price of battling the COVID-19 pandemic if it acts quickly, according to the UK’s fiscal watchdog. According to The Guardian, forecasts from the Office for Budget Responsibility (OBR) show that ending the UK’s contribution to the global climate crisis would add 21% of GDP to the national debt by 2050, or £469 bln in today’s terms. But those costs could climb twice as high if the government delays action to cut emissions. The independent spending forecasts found that taking early action to decarbonise the economy would have a smaller net impact on the UK’s finances than COVID or the 2008 financial crisis. But the spending watchdog said that delaying climate action until the start of the next decade, which is considered crucial in averting dangerous levels of global heating, would end up adding twice as much to the national debt as acting fast. Failing to take action could have a catastrophic impact on the public finances, the OBR warned. Meanwhile, around 625,000 jobs could be created if UK’s existing clean energy project pipeline is realised, according to new analysis from EY. Up to 90% of pandemic job losses could be offset by new jobs in the UK’s clean energy sector, if the government acts now to ensure the country’s vast clean energy project pipeline is realised, BusinessGreen reports.
Chilling stuff – Europe’s ambitions to fight climate change are being torpedoed by a soaring trade in illegal hydrofluorocarbons (HFCs). A new report released Thursday by the London-based Environmental Investigation Agency (EIA) reveals the potential climate impact of this illegal trade could amount to the GHGs of more than 6.5 mln cars being driven for a year. The EU revised its F-Gas Regulation in 2014 to phase down HFCs, a family of synthetic GHGs hundreds to thousands of times more potent than CO2 and commonly used in refrigeration, air-conditioning, and fire protection. But as supplies shrink and prices rise under the EU’s HFC quotas, criminal trade has proliferated to meet demand. EIA investigations identified Romania as a key entry point for illegal HFCs into EU markets, highlighting a network of intermediaries involved in illegal trade and commonplace use of bribery to smuggle HFCs across the border. Evidence from other illegal trade hotspots, such as Poland and Lithuania, suggest traders are opportunistic and move to exploit markets with weak enforcement. EIA investigators went undercover in Romania to infiltrate the highly profitable trade and found no shortage of suppliers willing to break the law to supply them with smuggled HFCs, at times supplied in single-use cylinders which have been outlawed in the EU. The most shocking revelation was the discovery that these hazardous gases were being smuggled around Europe below unwitting passengers and drivers in the luggage compartments of transcontinental coaches, among other methods. Although the size of the illegal HFC trade cannot be accurately estimated, EIA believes it is significant, likely between 20-30% of the legal trade – and with an allowable annual EU quota of 100.3 Mt CO2e, this would indicate the volume of illegal HFCs entering the EU is potentially as much as 30 Mt of CO2e.
AMERICAS
Power press – Nearly 80 major corporate entities are pressing Congress to enact a federal clean electricity standard, as the businesses want the US power sector to hit an 80% reduction in carbon emissions from 2005 levels by 2030 and meet President Joe Biden’s goal of 100% clean electricity by 2035. “Passage of a federal clean electricity standard will drive large amounts of new renewable generation and do so in a way that provides businesses with a clear path and expectations to make needed investments at the scale and speed necessary,” the companies wrote in a letter seen by Politico. The signatories include tech-adjacent firms Apple, eBay, and PayPal, utility Exelon, auto manufacturer General Motors, and consumer goods conglomerate Unilever.
CCUS cash – British Columbia-based Svante on Wednesday announced that the Government of Canada made a C$25 mln ($20 mln) investment to support the industrialisation and commercialisation of its CCUS technology within the North American market. With this investment, Svante will set-up a new Centre of Excellence for CCUS in Vancouver that will allow the company to scale up its manufacturing operations to produce commercial scale structured absorbent filters and to test its proprietary rapid adsorption machine (RAM) designs. The investment announced today comes from the Strategic Innovation Fund’s Net Zero Accelerator initiative and aligns with Government of Canada’s climate plan.
Carbon inclusion – Price reporting agency Argus Media on Wednesday signalled that its Biofuels and LCFS Markets Summit in Napa, California this October has reverted back to incorporating carbon, according to a new description of the event. Whereas the initial announcement last month dropped any mention of North American carbon markets – a departure from previous years – the event is now rebranded as the Argus North American Biofuels, LCFS & Carbon Markets Summit 2021. The event will take place Oct. 18-20.
SCIENCE & TECH
Green dreams – Even if European carbon prices more than tripled to €200 ($236), hydrogen from renewable energy would still struggle to compete with fossil fuels without further government support, Bloomberg reports. That’s the conclusion from research by consultants at Guidehouse and published by German thinktank Agora Energiewende. To make the average renewable hydrogen project competitive with a fossil alternative will require annual subsidies of as much as €24 bln this decade, they said. Hydrogen could help cut carbon emissions from industries such as steel making, shipping, and aviation, but making the gas with renewable sources is much more expensive than the kind made with natural gas that’s commonly used in oil refining and to make fertilisers.
AND FINALLY…
Abbot your way – Two days before state lawmakers return to Austin for a special legislative session, Republican Texas Gov. Greg Abbott on Tuesday gave state electricity regulators marching orders to “improve electric reliability” and essentially penalise renewables. In a letter to the Public Utility Commission, Abbott directed the three-person board of directors, who he appoints, to take action that would require renewable energy companies to pay for power when wind and solar aren’t able to provide it to the state’s main power grid, echoing a move state lawmakers rejected in May. Abbott also told the PUC to incentivise companies to build and maintain nuclear, natural gas, and coal power generation for the grid – which failed spectacularly during a February winter storm, leaving millions of Texans without power or heat for days in below freezing temperatures. (Texas Tribune)
Bonus edition… I call bullsh*t – US Sen. Ron Johnson insisted again last week that he is not a climate change denier, but CNN’s KFile found video of him from just weeks earlier telling a Republican group that it is “bullsh*t.” “I don’t know about you guys, but I think climate change is – as Lord Monckton said – bullsh*t,” the Wisconsin Republican said, without uttering the expletive but mouthing it, and referring to British conservative climate change denier and fake lord Christopher Monckton. “By the way, it is.” Johnson, a member of the Senate Commerce, Science and Transportation Committee, continued that “there are more and more scientists” writing books “just laying this to waste” and questioned why the US was focused on the climate crisis at all. Johnson made the comments in early June to the Republican Women of Greater Wisconsin Luncheon at Alioto’s in Wauwatosa, Wisconsin. His recent comments come as North America endures a historic and dangerous heat wave expected to last until mid-July that scientists linked to the climate crisis. The scorching temperatures are to blame for dozens of deaths and hundreds of visits to the emergency room in the Pacific Northwest.
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