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TOP STORY

Washington fire torches second-largest California offset project

A wildfire in Washington state has lit up portions of a forestry offset project that has generated the second most credits to date under California’s WCI-linked cap-and-trade programme, according to data and sources.

ASIA PACIFIC

Sinopec, China Resources announce first block trade in China ETS

Oil and gas firm Sinopec on Wednesday bought 100,000 CO2 permits from industrial conglomerate China Resources Holdings in the first off-screen block trade since China’s national emissions trading market launched last week.

Australian, Japanese firms to explore offset-backed ammonia from natural gas

Australia’s Woodside and a quartet of Japanese companies are exploring the possibility of using Australian natural gas to produce ammonia for the Japanese market, with associated CO2 emissions to be offset from CCS or bio-sequestration projects.

Japan pitches big increase in renewables use at the cost of LNG, coal

Japan will double the share of renewables in its energy mix by 2030 and make large cuts in LNG and coal consumption, according to a proposal released by the nation’s industry ministry Wednesday.

Glencore sets up Asian carbon desk, hires ex-BP traders

Commodity trading house Glencore has set up an emissions desk in Singapore, with a former BP carbon trader heading up operations.

EMEA

Euro Markets: EUAs ride support from gas to erase Tuesday’s losses

EUAs caught a lift from firmer gas markets on Wednesday afternoon, clawing back most of Tuesday’s losses as European natural gas prices rose in line with the Asian JKM market.

Vattenfall, Iberdrola report mixed fossil fuel generation figures for H1

Swedish utility Vattenfall’s EU ETS-covered power output fell nearly 2% year-on-year in H1, despite a near 3% increase in the company’s overall generation, the company said in its quarterly results on Tuesday.

AMERICAS

LCFS Market: California prices bounce back from 2.5-mth low as offers rise

California Low Carbon Fuel Standard (LCFS) credit values lifted off recent lows this week, though market participants reported large offers were backing up in light of the uptick.

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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

A time and placeholder – President Joe Biden’s administration hasn’t decided whether to impose a tariff on carbon-intensive imports from China and other countries, US Special Presidential Envoy on Climate Change John Kerry said. The administration is evaluating a potential carbon border adjustment amid concerns it could inflame already fraught trade tensions, Kerry said during an interview in Rome Wednesday with Bloomberg Television prior to a gathering of environment ministers from the G20. Congressional Democrats have proposed a tariff on carbon-intensive imports as part of $3.5 trillion tax-and-spending legislation, but Kerry said the congressional plan is only a “placeholder” while the administration studies the issue.

Get your chequebooks ready – Governments and companies will need to invest at least $92 trillion by 2050 in order to cut emissions fast enough to prevent the worst effects of climate change. That’s the latest forecast from analysts at BloombergNEF, who see that scale of spending as necessary to drive a rapid electrification of the global economy and slash reliance on fossil fuels. Investment in infrastructure to accommodate energy transition will need to rise to between $3.1 trillion and $5.8 trillion annually on average until 2050, up from about $1.7 trillion in 2020, BNEF found. That means the final bill could be as much as $173 trillion, about eight times US GDP in 2019. That level of spending would help limit the increase of average global temperatures to 1.75C from pre-industrial levels, compared with about 1.2C of warming already present.

EMEA

Not fans – European industries covered by the EU’s future CBAM have expressed doubts about the proposal tabled last week, Euractiv reports. In addition to border measures, they are calling for an export rebate scheme to help green EU products compete on global markets. The European Commission’s proposal would introduce a carbon levy at the EU’s borders in order to protect manufacturers from carbon leakage. The levy will apply to six categories of imports: electricity, iron and steel, aluminium, fertilisers, and cement – and will be phased in by 2026, with free EUA allocations gone within a decade from that date.  Some countries have already raised concerns about the plan, with European industries indicating that they aren’t fans of it either.

Mission possible – All of Germany’s energy demand can be met through renewables alone within the next 10-15 years, according to a new report by the German Institute for Economic Research (DIW Berlin). The prerequisite for this is that German expansion targets for both wind and solar energy are greatly increased, the authors write. Onshore wind power will play a particularly important role, according to DIW, which is also calling for the expansion of wind farms – especially in the south of the country. It added “100% renewable energies are technically possible and economically efficient – and above all urgently needed to be able to achieve the European climate protection goals.” According to the calculations, not only the electricity demand, but the entire energy demand in this country could be secured with renewables. (Clean Energy Wire)

New body – Britain’s government plans to create a new energy system operator to help the country meet its net zero emissions target, which could remove responsibilities now held by National Grid, consultation documents published on Tuesday showed. “The gas and electricity system operators are currently part of National Grid Plc, creating a potential conflict of interest that can already make it challenging to effectively discharge both existing roles… as well as potential new roles needed to fulfil net zero,” the consultation document said. Under the plans the new Future Systems Operator (FSO) would run the country’s electricity system which is currently managed by National Grid’s Electricity System Operator (ESO) The proposal comes after Britain’s energy market regulator Ofgem recommended in January that an independent electricity body be set up to help meet the target. (Reuters)

AMERICAS

Corn forlorn – Sens. Pat Toomey (R-PA), Dianne Feinstein (D-CA) Susan Collins (R-ME) and Bob Menendez (D-NJ) introduced legislation Tuesday that would eliminate volume requirements for corn ethanol in the Renewable Fuel Standard (RFS) but leave in place volume obligations for advanced and cellulosic biofuels and biodiesel. “The federal corn ethanol mandate no longer makes sense when better, lower-carbon alternatives exist,” Feinstein said in a statement. “Corn ethanol achieves little to no reductions in greenhouse gas emissions. It’s time to end the mandate and instead support more advanced biofuels and biodiesel that won’t contribute to climate change or drive up the cost of food.” (Politico)

VOLUNTARY

Project partners – Project developer ecosecurities and advisory firm CoreCarbonX on Wednesday announced a partnership to originate and market 10 mln nature-based solutions carbon credits by 2024 from several new projects in India. CoreCarbonX will help ecosecurities with the design and implementation of carbon cycle development activities as well liaison with local and national authorities and relevant stakeholders, the companies said in a press release.

SCIENCE & TECH

Hot hajj – The risk to Muslim pilgrims embarking on the hajj posed by extreme heat worsened by global warming could increase five-fold with just a 1.5C increase over pre-industrial levels, a new study in Environmental Research Letters shows. With 2.4C of warming, the risk of life threatening heat stroke doubles again. Temperatures in Mecca are expected to hit 44C this week as a COVID-limited 60,000 pilgrims complete the trek. Completing the annual hajj pilgrimage to Islam’s holiest sites in Saudi Arabia is once-in-a-lifetime duty for able-bodied Muslims who can afford it. The extreme heat, and the health risks it poses, “will compromise the very essence of this religion,” Fahad Saeed, lead author of the study, told Thomson Reuters. (Climate Nexus)

AND FINALLY…

Hot FERC summer – What do the US Federal Energy Regulatory Commission (FERC), rapper Megan Thee Stallion, and climate change have in common? They’re all tied to a new campaign launched on the House floor Tuesday intended to boost FERC’s visibility on Capitol Hill. The “Hot FERC Summer” campaign, launched by suburban Chicago Rep. Sean Casten and supported by other Democratic members of Congress is a play on Stallion’s 2019 hit “Hot Girl Summer” – a move Casten’s office hopes will bring increased attention to FERC at a critical time for climate and clean energy policy. “To paraphrase Miss Stallion … now that FERC has put in all that work, it’s time for them to be the MVP,” Casten said. “Now some might say that FERC isn’t, dare I say, ‘hot enough’ to warrant that attention. But for those of us who are serious about fighting the climate crisis, they sure should be.” (Utility Dive)

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