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The European Commission is considering broadening the scope of product benchmarks under the EU’s carbon market rules for industry to include clean production methods – a measure that could grant free allowances for green hydrogen or clean steel production, a senior EU official said.
China’s environment ministry on Tuesday reprimanded the Shanxi provincial government for failing to control coal consumption and not dealing with regulation breaches by corporations.
Australia Market Roundup: Strong demand pushes ACCUs to fresh record high, as ERF deliveries close in on 70 mln
Strong interest from speculative and voluntary buyers on Tuesday pushed the Australian offset price to a record high for the fourth consecutive trading session, while delivered credits to the government’s Emissions Reduction Fund (ERF) is now within touching distance of the 70-million mark.
European carbon prices staged a late and modest recovery after falling to their lowest in more than a month as selling pressure intensified, while energy markets fell back and equities retreated from session highs.
Offset registry Climate Action Reserve (CAR) on Monday announced it is developing an ex-ante crediting methodology for fuel treatments, including prescribed burns, in order to reduce the severity of wildfires in the western US.
The International Energy Agency (IEA) has warned that current government spending on post-COVID recovery measures isn’t targeting sufficiently clean energy investment, and that carbon emissions may climb to record levels by 2023 as a result.
Disheartened by existing voluntary carbon offerings, market veterans launch ‘fair and transparent’ offset service
Amid a global voluntary carbon market hamstrung by profiteering, criminal activity, and a lack of regulation, a team of market veterans has launched a carbon offset firm aimed at providing for its customers a ‘genuine, fair, and transparent’ path to net zero.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Subsidising our own demise – Despite making commitments to reduce emissions, G20 member countries are still supporting coal, oil, gas, and fossil-fuel power at levels untenable to achieve Paris Agreement goals, according to the Climate Policy Factbook, published today by BloombergNEF and Bloomberg Philanthropies. The factbook outlines the progress that each G20 member country has made toward moving to a low-carbon economy, with the goal of increasing transparency regarding global climate efforts and informing policy priorities ahead of upcoming international climate negotiations, such as COP26. The Climate Policy Factbook highlights three concrete areas in which immediate government action is needed to limit global warming to 1.5C: phasing out support for fossil fuels, putting a price on emissions, and encouraging climate risk disclosure.
BHP: Bye Hydrocarbon Production – Global miner BHP Group is considering getting out of oil and gas in a multibillion-dollar exit as it looks to speed up its retreat from fossil fuels, Bloomberg News reported on Tuesday, citing people familiar with the matter. The world’s biggest miner is reviewing its petroleum business and considering options including a trade sale, the report said, adding that the deliberations were still at an early stage and no final decision has been made. “BHP does not comment on rumour or speculation,” company spokesperson Judy Dane told Reuters. Mining companies around the world are under growing shareholder pressure to reduce their carbon footprint and take stringent climate actions to cut emissions, as calls for a shift towards cleaner forms of energy accelerate.
Quite a lot – EU environment ministers expressed “quite a lot of reservations” about European Commission plans to set up a second ETS for road transport and buildings at their first meeting since Brussels tabled the proposal last week, Euractiv reports. “As regards the setting up of a special ETS scheme for transports and buildings, quite a lot of reservations were expressed,” said Slovenian minister Andrej Vizjak, which currently holds the rotating presidency of the EU Council. “I think it’s going to be quite a hard nut to crack,” he added. Vizjak did not state which countries the reservations came from, but said many have voiced scepticism about the Commission’s plan. Yet the proposal has seen criticism of southern and eastern member states alike, as well as several prominent MEPs.
C’est fait – France’s Parliament has adopted a law that cracks down on emissions linked to transport, manufacturing, and housing, Bloomberg reports, as the government seeks to implement new measures to fight global warming. The Climate and Resilience bill adopted Tuesday is based on proposals of an assembly of 150 randomly picked citizens created by President Emmanuel Macron. Coming ahead of next year’s presidential election, it’s a response to the Yellow Vest movement which, almost three years ago, violently rejected Macron’s push for higher environmental taxes on gasoline and diesel. The legislative package features many of the proposals drafted by the national Citizens’ Convention for Climate, including:
- A ban on advertising for all fossil fuel energies from H2 2022.
- Mandatory creation of low-emission zones in cities with populations above 150k, where most polluting cars will be banned by the end of 2024.
- Ban on advertising of cars that emit more than 123 g CO2/km from 2028
- Ban on sales of cars emitting more than 95 g CO2/km by 2030, with limited exceptions for some professional vehicles
- Ban on renting badly insulated housing from 2025, with reinforced requirements in 2028 and 2034
- Retailers must dedicate at least 20% of their supermarket space to bulk sales from 2030 to curb packaging
- Protecting farmland and forests by halving the pace of transformation of theses areas into construction areas during the coming decade
- Creation of a tax on nitrogen-based fertilisers pending failure to reach targets on related emissions
- Increased restraint on advertising screens in shop windows
- Reinforcement of environmental criteria in public procurement
Afraid of long-term commitment – CEZ, the main Czech electricity producer, may switch to managing some of its coal fleet on short-term contracts, which could reduce the number of hours they operate, CFO Martin Novak said Tuesday. The company plans to cut the coal portion of its output to 12.5% in 2030 from 36% in 2020 under a strategy update announced in May to limit its carbon footprint, in response to EU climate goals and investor demand for companies with decarbonisation, social, and governance strategies. Novak said the company was considering managing more of its plants in the way it runs its gas-fired Pocerady plant, meaning on shorter contracts rather than hedging output for up to three years ahead. The change, he said, could mean the plants operated for fewer hours per year based only on when their output could be hedged profitably. However, he added that the market situation would not accelerate the decommissioning of coal plants for now as their output prices and carbon permits are currently hedged ahead. (Reuters)
MRV ready – Ukraine’s system for monitoring, reporting, and verification of GHGs will be fully operational in 2022, the Minister of Ecology and Natural Resources of Ukraine Roman Abramovsky told Interfax. “We will receive data on emissions from all [enterprises], check them with the help of auditors who will be attracted by the Ministry of Economy, and verify them in accordance with a standardized methodology. Then we will take into account emissions in our database and synchronize with the State Tax Service,” the minister said. In his opinion, it will take two-to-three years for monitoring and verification to receive established information on emissions from enterprises. After that, it will be possible to create a national emissions trading system.
Rule updates – The South African Treasury has published the new gazetted amendments to the country’s Carbon Offset Regulations of its Carbon Tax Act. The regulations set out the eligibility criteria for offset projects, a procedure for taxpayers claiming the offset allowance, and administration of the carbon offset system. According to Verra, the main changes are:
- CERs from projects registered under the Verified Carbon Standard that are listed in certain other national registries can now be used to settle carbon taxes provided they meet all other eligibility criteria. These units no longer have to be first transferred to the Verra Registry as an intermediate step.
- Credits from projects that were active prior to June 1, 2019 can be used in Phase 1 of the carbon tax (June 2019 to Dec. 2022). If a taxpayer plans to use these credits to settle carbon taxes, it must do so before July 28, 2023 (the deadline for settling carbon taxes for the period from Jan. 1 to Dec. 31 2022).
- A taxpayer may not receive a carbon offset allowance for a project for which it was granted a section 12L allowance through the Department of Energy (see page 6 of the Government Gazette).
As well, the Treasury said general comments for requests for the government to finalise a framework for local offset standards that can be used to determine whether a project qualifies as an eligible project, and expansion of the geographic scope of offset projects beyond South Africa, were also made. To this effect, the Department of Mineral Resources and Energy had commenced a process to publish the draft framework for local standards, which was developed under the World Bank’s Partnership for Market Readiness project for public consultation. “The options for expanding the geographical scope of eligible offset projects, including within the African region, will be considered as part of the review and phase 2 design of the carbon tax,” said the department. South Africa’s carbon tax was imposed in June 2019. The offset allowance portion of the regulation assists firms to cost-effectively reduce their emissions and tax liability by up to 10% of their total GHG output.
Transition talk – Canadian Minister of Natural Resources Seamus O’Regan on Tuesday launched an engagement process asking Canadians how the government can ensure a just and equitable transition to a low-carbon future for workers and their communities. Through this process, the government is calling on stakeholders, such as labour, NGOs, and industry, as well as provincial, territorial, and Indigenous partners, to provide feedback on potential elements of proposed just transition legislation. This includes the development of just transition principles that would inform government decision-making and the creation of a Just Transition Advisory Body.
Capture criticism – Investment in carbon capture technology will hinder Canada’s transition away from fossil fuels and exacerbate the effects of climate change, says a new letter co-signed by hundreds of organisations. Over 500 environmental groups and other organisations from Canada and the US put the piece together, which ran as a full-page ad in the Washington Post and Ottawa’s Hill Times. The groups say most carbon capture helps the fossil fuel industry, as the letter explains that almost 80% of CCS funds more oil extraction. (National Observer)
Slow RVO – The White House has delayed an annual rulemaking process to decide on the renewable volume obligations (RVOs) for the Renewable Fuel Standard (RFS), as it searches for a solution on a contentious issue that pits blue-collar refinery workers against the nation’s corn farmers, two sources familiar with the matter told Reuters. President Joe Biden’s chief of staff Ron Klain is involved in the discussions, the sources said, and lawmakers representing corn-producing states, including Democratic senators Tammy Duckworth from Illinois and Senator Amy Klobuchar from Minnesota, have made direct pleas to Klain. President Donald Trump’s EPA never proposed an RVO for the 2021 RFS compliance year, and media outlets previously reported the agency under Biden would combine the 2021 and 2022 RVOs in its upcoming rulemaking.
Shipping shame – The top 15 US retailers were responsible for as much climate pollution in 2019, from their shipping alone, as the energy used to power 1.5 mln American homes, a report released Monday by Pacific Environment found. Wal-Mart tops the list, with 3.7 MtCO2e – more than a coal-fired power plant running for a full year – emitted by ships carrying products to be sold in the US. After Wal-Mart, the next 14 top polluters were: Ashley, Target, Dole, Home Depot, Chiquita, Ikea, Amazon, Samsung, Nike, LG, Redbull, Family Dollar, Williams-Sonoma, and Lowes. (Climate Nexus)
Lost in Spazos – Jeff Bezos said in an interview hours after flying to suborbital space on Tuesday that there are “no words” to adequately describe the experience, but that it reinforced his commitment to combatting climate change and keeping Earth “as this beautiful gem of a planet that it is.” : Bezos, the world’s richest man, said he plans to make his aerospace company Blue Origin and the Bezos Earth Fund – a $10 bln effort to fight climate change – his life focus moving forward. “We need to take all heavy industry, all polluting industry, and move it into space,” Bezos added. During launch, rockets can emit between 4-10 times more nitrogen oxides than Drax, the largest thermal power plant in the UK, over the same period. Additionally, CO2 emissions for the four or so tourists on a space flight will be between 50 and 100 times more than the one to three tonnes per passenger on a long-haul flight. S&P Global Sustainable1 estimates that a commercial space launch using conventional fuel types generates 518 tonnes of CO2 emissions. These scope 1 emissions are equivalent to one car travelling 1.8 mln miles by land, which equates to 74 trips around the earth at the equator. (Axios, The Conversation)
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