CP Daily: Tuesday August 31, 2021

Published 02:05 on September 1, 2021  /  Last updated at 02:17 on September 1, 2021  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

New Zealand sells entire cost containment reserve as carbon permit auction clears at record

New Zealand carbon permit auction cleared at a record high of NZ$53.85 ($37.97) on Wednesday, with ravenous buyers snapping up all 7 million units for 2021 under the market’s new cost containment reserve, along with the 4.75 mln on offer in the sale.

EMEA

Euro Markets: EUAs consolidate as front-month gas rises to record

EU carbon consolidated its recent gains, as weekly auction supply dropped to the lowest for the year while European natural gas prices surged.

EU carbon jumps to new record above €61 amid speculative buying and strong gas

(From Monday) – European carbon prices rose above €60 for the first time early on Monday, briefly topping €61 moments later amid a surge of speculative buying and strong natural gas prices.

EU CBAM to have only minor impact on trade -study

A carbon border adjustment mechanism (CBAM) imposed by the EU on its trading partners will only have a minor effect on European imports, a study has found.

AMERICAS

Virginia state agency suspends Dominion’s RGGI rate adjustment ahead of Sep. 1 implementation

Dominion Energy’s RGGI rate adjustment has been suspended ahead of its Sep. 1 implementation until the Virginia State Corporation Commission (SCC) can hear a petition from an environmental group that says the utility should be required to examine low-cost alternatives.

California gasoline consumption neared pre-pandemic volume in May

California gasoline usage edged closer to pre-pandemic levels in May, as total consumption rose slightly from the previous month despite some state-level COVID-19 restrictions remaining in place across the Golden State, according to state data released Tuesday.

REC Markets: Texas credits fade to quell torrid year-long stretch

Texas Renewable Energy Certificate (REC) prices declined over the second half of August to stop a bull run that has taken wider North American compliance and voluntary Renewable Portfolio Standard (RPS) markets by storm over the past year.

Northeast generator backs Pennsylvania’s RGGI regulation ahead of key vote

A large US-based utility has urged Pennsylvania’s Independent Regulatory Review Commission (IRRC) to approve a RGGI-modelled cap-and-trade regulation this week despite a flood of comments from Republicans, labour groups, and industry stakeholders against the measure.

Trudeau Liberals pitch new climate initiatives ahead of Canadian election

Canadian Prime Minister Justin Trudeau’s Liberal Party rolled out a zero-emissions vehicle (ZEV) sale mandate, declining GHG caps for the oil and gas sector, and a Clean Electricity Standard (CES) on Sunday as it looks to bolster its climate agenda ahead of next month’s federal election.

ASIA PACIFIC

Australia to pilot fixed price purchasing desk for some offset projects

Australia’s Clean Energy Regulator plans to offer small-scale projects an opportunity to sell their offsets to the government outside the regular ERF auctions, starting with a pilot for environmental plantings programmes.

Australia outlines new rules to boost soil carbon offset numbers

Australia has released a new draft method for soil carbon that aims to make it easier for farmers to develop and operate projects and earn offsets.

HKEX deepens carbon ties with Guangzhou Futures Exchange

Hong Kong Exchanges and Clearing (HKEX) and the Guangdong Futures Exchange (GFEX) are teaming up to explore the possibilities of a strategic partnership around products related to China’s carbon emissions targets.

VOLUNTARY

VCM Report: Exchange-traded CORSIA credits diverge from OTC market in setting new highs

Standardised voluntary emissions reduction (VER) prices rebounded this week after a brief retracement, with voluntary carbon market (VCM) participants noting that new highs set on exchange-traded, CORSIA-eligible offsets were differing from values on the more heavily traded over-the-counter market.

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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

Vital talks – US climate envoy John Kerry arrived in Tokyo for talks on Tuesday with Japanese PM Yoshihide Suga and other officials on cooperation on carbon emissions and cutting support for fossil fuels, especially coal, before heading to Tianjin, China where he will meet with China’s climate envoy, Xie Zhenhua. (Reuters)

EMEA

Phaseout rethink – The planned revision of EU climate, energy, and environmental state aid guidelines could lead to the German government re-opening its coal phaseout decisions, writes Tagesspiegel Background. According to the current draft, the new guidelines would mean Germany will have to adapt decisions already taken on state aid rules, such as on the coal exit, which the current government wants to see be completed by 2038. In an assessment seen by Tagesspiegel, the German government is calling for this provision to be abolished. An adjustment of already approved aid does not seem adequate for reasons of legal and investment security, it says. According to the new draft guidelines, coal-fired power plants must be shut down no later than 12 months after compensation payments have been granted unless the payments are adjusted accordingly. (Clean Energy Wire)

Don’t be evil, be green – Google has announced it will invest €1 bln in digital infrastructure and clean energy in Germany from now until 2030. As part of this, the US tech giant will team up with energy company Engie to purchase clean electricity and ensure that operations in Germany run at nearly 80% carbon-free electricity on an hourly basis from 2022. The company will purchase power from 23 different renewables projects – some of which will be newly-built, while others are existing facilities that no longer receive feed-in tariffs – using so-called power purchase agreements. (Clean Energy Wire)

Green team – The Scottish Green party has agreed a “historic” power-sharing deal with the Scottish National Party (SNP), the Independent reports. The agreement will see the Scottish Green co-leaders Patrick Harvie and Lorna Slater become government ministers. The deal was negotiated over the summer – after the SNP fell one seat short of an overall majority in May’s election – and was agreed in an extraordinary general meeting on Saturday. BBC notes that the deal required a two-third majority of the party’s National Council to be passed, while the Guardian reports that public disagreement between the parties would only be allowed on a set of agreed topics, including “aviation policy; green ports; direct financial support to businesses involved in the aerospace, defence and security sectors; field sports; and the economic principles related to concepts of sustainable growth and inclusive growth”. (Carbon Brief)

ASIA PACIFIC

Takes two to Tanggu – Indonesia has approved the Tanggu LNG project, which will store underground CO2 emissions from the Ubadari gas field. BP and Mitsubishi are the major stakeholders, respectively owning 40% and 16% of the project, with several other major Japanese energy companies also involved. The initiative is expected to capture and store some 25 MtCO2e over its lifetime.

Offshore CCS – Chinese oil major CNOOC has launched the nation’s first offshore CCS project, Reuters reports. Established in the Pearl River Mouth Basin in the South China Sea, the project is expected to store around 300,000 tCO2e annually through sealing CO2 800 metres underneath the surface.

Sorting the numbers out – China has established a governmental working group on carbon accounting to be led by the National Development and Reform Commission (NDRC) and the National Bureau of Statistic, the NDRC announced Tuesday. The group, set up under the recently established leaders’ group on emissions, is meant to collect and verify carbon emissions data from national and local levels as well for industrial sectors, it said. Data quality has been a challenge for China, proving a stumbling block to add more sectors into its ETS from the start.

AMERICAS

Joining the bandwagon – Former FERC Chair Neil Chatterjee announced on Monday that he had joined the Climate Leadership Council as a senior policy adviser. The Conservative-back CLC has advocated for the US to implement a carbon tax that would return revenue to tax payers to offset higher energy prices. Chatterjee served as a FERC commissioner for four years until his term expired this month, and during his tenure, he supported the federal agency backing carbon pricing proposals in the wholesale power markets. In his announcement, Chatterjee said a carbon tax would help to mitigate climate change, while providing much-need certainty to energy markets.

New corner office – The US Department of Health and Human Services announced on Monday that it would create an Office of Climate Change and Health Equity that would focus on the health impacts of climate change, expand protection for vulnerable communities, and support initiatives to reduce emissions from health providers. Senior National Institutes of Health Official John Balbus would run the office on an interim basis.

Progressive pressure – Progressive Democrats called for President Joe Biden to replace Federal Reserve Chair Jerome Powell on Monday, saying the federal agency should be helmed by someone who would focus on eliminating climate risks and advancing racial and economic justice. Representatives Alexandria Ocasio-Cortez, Rashida Tlaib, and Ayanna Pressley said Powell had made positive changes, but the federal post needed to take bolder and more decisive action to eliminate climate risk. Powell’s term as chair ends in February, with Biden slated to make a decision next month. (Politico)

Losing my petition – A federal court rejected a lawsuit challenging the constitutionality of the California recall election of Governor Gavin Newsom on Friday, saying the current two-pronged method does not give an advantage to those voting for the recall. The lawsuit claimed California’s recall election was not constitutional, because a recalled governor could receive more votes than the replacement candidate. However, US District Court Central District of California Judge Michael Fitzgerald said voters have the ability to vote on both items of the recall ballot. California’s recall election asks voters two questions: whether the current governor should be replace and who should be the replacement. The current governor can not appear as a replacement candidate, meaning Newsom could be recalled by a slim majority while still receiving more votes than the replacement. The recall election is slated for Sep. 14, with Newsom holding a slim edge to remain at his post in current polling. (San Francisco Chronicle)

VOLUNTARY

Nice one, Nige – The Netherlands-based carbon offset company that appointed Brexiteer Nigel Farage to its advisory board earlier this year has yet to see a return on its investment. Dutch Green Business Group NV announced its interim results for the six month period to June 30, reporting no revenue and incurring an EBITDA loss of €360,000 as it “focused on establishing the systems, processes and platform to enable it to effectively launch its repurposed offering to the market in the second half of the year”. DutchGreen said it holds approximately 157,000 tonnes of carbon offsets and has a pipeline of nine projects in 10 countries with over 250,000 hectares of sourced land under review. The firm forecasts to expand its carbon offsets project pipeline with the generation of over 6 Mt of offsets in H2 2021. It also announced that it closed a €6 mln private placement, acquired a strategic 50% stake in Green Fuel Investments BV to drive the expansion of its groundbreaking reforestation and carbon offsetting retail platform, and acquired a 75% controlling stake in specialist blockchain and software development tech company, Statix Artificial Intelligence BV to enable DutchGreen to deliver smart reforestation and ecosystem restoration projects. DutchGreen said it has a positive outlook, in part due to “continued strong demand for offsets, which saw the carbon price on the EU ETS hit an all-time high … of €61 [this week]”.

AND FINALLY…

Heim-trick (CCS) manoeuvre – One of the consequences of rising CO2 levels in our atmosphere is that levels also rise proportionately in the ocean, harming wildlife and changing ecosystems. Heimdal is a startup working to pull that CO2 back out at scale using renewable energy and producing carbon-negative industrial materials, including limestone for making concrete, in the process, and it has attracted significant funding even at its very early stage. Carbon capture, co-founder Erik Millar noted, is frequently a circular process, meaning it is captured only to be used and emitted again. Better than producing new carbons, sure, but why aren’t there more ways to permanently take them out of the ecosystem? The two founders envisioned a new linear process that takes nothing but electricity and CO2-heavy seawater and produces useful materials that permanently sequester the gas. Of course, if it was as easy that, everyone would already be doing it. According to Tech Crunch, the Heimdal process, which has been demonstrated at lab scale, is roughly as follows. First the seawater is alkalinized, shifting its pH up and allowing the isolation of some gaseous hydrogen, chlorine, and a hydroxide sorbent. This is mixed with a separate stream of seawater, causing the precipitation of calcium, magnesium, and sodium minerals and reducing the saturation of CO2 in the water — allowing it to absorb more from the atmosphere when it is returned to the sea. So from seawater and electricity, Heimdal produces hydrogen and chlorine gas, calcium carbonate, sodium carbonate and magnesium carbonate, and in the process sequester a great deal of dissolved CO2.

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