CP Daily: Monday September 20, 2021

Published 01:58 on September 21, 2021  /  Last updated at 02:03 on September 21, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Malaysia to establish emissions trading scheme, guidelines for voluntary carbon market

Malaysia will develop a domestic emissions trading scheme and draft guidelines to set up a voluntary carbon market, its environment minister said over the weekend.

INTERNATIONAL

US, EU ink methane pact in push to help get COP26 climate summit back on track

The US and EU have jointly pledged to slash their methane emissions, in an internationally coordinated move seen as a significant step ahead of next month’s UN climate talks, which observers warn are at risk of faltering.

EMEA

Spain urges EU to curb carbon market speculation as part of measures to calm energy prices -media

Spain wants the EU to adopt measures to curb financial speculation in the ETS, outlining a number of proposals to calm the surging energy prices that are rattling the bloc currently.

Euro Markets: EUAs make gains amid further gas supply cuts

Carbon erased early losses on Monday and settled at their highest in a week, after natural gas prices jumped on news of cuts to LNG exports in the Mediterranean and little additional supply from Russia.

Utility Vattenfall ups 2030 emissions reduction target in 1.5C-alignment

Sweden-controlled utility Vattenfall has pledged to phase out coal by 2030 as part of a ramping up of its voluntary emissions reduction pledge designed to align with a 1.5C global warming scenario.

Poland vows to keep controversial lignite mine open after top EU court levies €500k daily fine

Poland has vowed to continue extracting coal at its Turow mine after being ordered by Europe’s top court to pay daily fines of €500,000 to the European Commission over the government’s refusal to adhere to an earlier ruling.

ASIA PACIFIC

India in a position to adopt net zero target, report says

India should target net zero emissions by between 2065 and 2070, and reach a peak in its emissions by 2035, according to a new think tank report.

Australia Market Roundup: Santos registers first energy efficiency carbon projects, as ACCUs rise to fresh high

Australian oil and gas firm Santos has won approval for its first to industrial energy efficiency projects to earn carbon credits, as the domestic spot offset price has again hit a record high.

AMERICAS

Stakeholders raise legality, reliability concerns about California 2022 Scoping Plan options

Stakeholders are advocating for California regulator ARB to increase the stringency or the long-term certainty of its WCI-linked cap-and-trade programme in the 2022 Scoping Plan, while power utilities and an oil major raised reliability and legality questions about current scenarios, public comments show.

VOLUNTARY

VCM Report: Nature-based VER values lift past CORSIA-eligible units

Prices for exchange-traded, standardised voluntary emissions reductions (VERs) rose more quickly among nature-based products than CORSIA-qualified credits for the second straight week, reasserting a premium in the voluntary carbon market (VCM) that had evaporated earlier this month.

Carbon market veteran joins BP to originate voluntary projects in Americas

A carbon markets expert has joined BP to originate new voluntary projects in the Americas, Carbon Pulse has learned.

COMMENT

Is the EU carbon price rally over?

So the latest peak in European carbon prices is over. EUAs climbed to a record of €63.35 on September 8 and have settled back at around €60 over the past week. I suppose the question is: is that it? Are we done for the year, or are prices going to stage yet another rally?

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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

Do more! – Investors managing more than $2.5 trillion have called on governments to compel companies and auditors to file financial accounts aligned with global net zero emissions targets, a letter seen by Reuters showed. Writing to UK climate czar and COP26 President Alok Sharma ahead of the next round of global climate talks in Glasgow in November, the group said doing so was crucial to clarify the financial impact of climate change and give an incentive to invest accordingly. Governments should mandate a requirement for companies to make clear the financial consequences of a net-zero pathway and for auditors to call out where companies have failed to do so, the investor group said in the Sep. 14 letter. It follows a recent study by Carbon Tracker and the Climate Accounting Project that found more than 70% of the world’s heaviest-emitting companies did not disclose the full risks in their 2020 disclosures, with 80% of audits showing no evidence the risk had been assessed. “Most (companies) continue to use assumptions that presume little or no decarbonisation, and thus report financial results predicated on governments failing to implement their stated commitments and, in some cases, legal targets,” the letter said.

Real talk – The organisers of the COP26 climate summit in November have decided to limit corporate participation in Glasgow to “organisations that are committed to taking real, positive action and have strong climate credentials,” according to campaigners Earthworks, citing a Wall Street Journal article ($) published Monday. Only companies that are committed to carbon reduction targets in line with the Science-Based Target Initiative will be invited to engage in talks at the world’s largest gathering of climate policy expert. Earthworks said The Science Based Target Initiative requires that companies accurately account for GHG reductions by separating abatement by asset divestment from real efforts to decrease emissions from their business activities. The move is expected to sideline Big Oil from participating in the UK-hosted summit.

Maritime filings – Ian Finley, a UK national representing the Cook Islands at the UN’s IMO shipping agency criticised for blocking efforts to tackle global shipping emissions, has been paid at least $700,000 since 2010 by an industry lobby group International Parcel Tanker Association (IPTA) he helps run with his wife. IPTA’s General Manager Janet Strode, who is married to Finley, initially claimed he had had no involvement since the early 1990s, before admitting recent US tax returns listing him as its Secretary were correct. A spokesperson for the country’s foreign ministry denied there was any conflict of interest, criticising what he called “highly regrettable attempts to discredit the Cook Islands and its Permanent Representative Finley” over its approach to shipping emissions. (DeSmog)

EMEA

Fishy fuels – The EU’s fishing fleet receives a tax break of between €759 mln and €1.5 bln a year from fuel tax subsidies, according to a report published Monday by the Our Fish campaign. The group also finds that 7.3 mln tonnes of CO2 are produced from burning fuel. MEP Grace O’Sullivan said the European Parliament-backed 8th Environment Action Program offers an opportunity for the EU to introduce binding deadlines to phase out environmentally harmful subsidies. (Politico)

The kind we need – Some of Britain’s food companies and meat processors will run out of CO2 within days, forcing them to halt production, industry representatives are warning. A jump in gas prices has forced several domestic energy suppliers out of business and has shut fertiliser plants that also produce CO2, which is used to stun animals before slaughter and to prolong the shelf-life of food. The shortage of CO2, also used to put the fizz in beer and soft drinks, has compounded an acute shortage of truck drivers in the UK, which has been blamed on COVID-19 and Brexit. “My members are saying anything between five, 10 and 15 days supply,” Nick Allen of the British Meat Processors Association told Sky News. Foreign office minister James Cleverly said the government was looking to address the short-term shortages. (Reuters)

ASIA PACIFIC

Hydrogen boost – The Australian government will increase its A$1.2 bln hydrogen investment, with an additional $150 mln being directed to a further two locations under the Clean Hydrogen Industrial Hubs program. The funding increase will enable the rollout of hydrogen hubs across seven priority regional sites, according to the minister for energy and emissions reduction Angus Taylor. The funding will help to de-risk projects and quickly achieve the scale necessary to establish new export industries and meet the growing energy needs of the Indo-Pacific region. Seven prospective locations across Australia have been identified for the programme and include: Bell Bay (TAS), Darwin (NT), Eyre Peninsula (SA), Gladstone (QLD), Latrobe Valley (VIC), Hunter Valley (NSW), and Pilbara (WA). Clean Hydrogen Industrial Hubs will create the domestic demand needed to help the hydrogen industry drive down costs and scale-up production creating new job opportunities for our regions, Taylor stated.

Korean CCS – Korea National Oil Corp. (KNOC) and SK Innovation have signed an agreement to further cooperation on CCS, focussing initially on the 20-year old Donghae gas field. The plan is to store 400,000 tCO2e/year there over three decades, storing 12 Mt in all. The project will be part of efforts to meet the government’s target of utilising or storing 10.4 Mt/year by 2030. If successful, the companies will extend their cooperation to other projects in the future, with SK already looking at industrial projects in Ulsan.

AMERICAS

Independent day – Democratic members of Pennsylvania’s congressional delegation are calling on President Joe Biden’s administration to alter the US biofuel credit (RIN) markets to protect union jobs at independent refineries, which typically purchase the credits to meet biofuel obligations under the Renewable Fuel Standard (RFS). They write that current high RIN prices will force Monroe Energy’s Trainer refinery to spend twice as much to comply with the programme as was spent to purchase the entire company 10 years ago. The lawmakers call on the administration to examine the financial challenges faced by independent refiners associated with the RFS – including weighing the reconfiguration of the RFS compliance system – to recognise the impact COVID-19 has had on refiners. That letter arrives as EPA’s Office of Inspector General signalled Friday it would begin an audit on the agency’s oversight of the RINs market. The audit is part of the OIG’s 2021 plan that called for looking at whether EPA provides reasonable assurance that the credit market complies with its regulations and guidance. (Politico)

Lined up – New York Governor Kathy Hochul announced two clean energy transmission lines on Monday in advance of New York Climate Week, with the proposed projects to provide an estimated 77 Mt of CO2 reductions over the next 15 years. Clean Path NY, developed by Forward Power and New York Power Authority, and Champlain Hudson Power Express, developed by Transmission Developers and Hydro-Quebec, would bring approximately 18 million MWh of upstate New York and Canadian renewable energy to New York City. If approved, the projects would help the state achieve its 70% renewable energy goal by 2030 in the Climate Leadership and Community Protection Act, and put the Empire State on a path to carbon neutrality.

Getting hotter – The US White House issued a statement Monday confirming their commitment to address extreme heat across the nation. “As with other weather events, extreme heat is gaining in frequency and ferocity due to climate change, threatening communities across the country,” the statement reads. Extreme heat is now the leading weather-related killer in America according to the National Weather Service. President Biden will “mobilise an all of government response” to address the mounting threat. Extreme weather cost America $99 bln in damage last year, a record likely to be broken in 2021.

VOLUNTARY

Net zero commitments –Twelve new asset owners have joined the 28 existing signatories to the Paris Aligned Investment Initiative, bringing the total signatories to the initiative to 40 asset owners who are collectively responsible for more than $2.36 trillion in assets. The new additions will be committing to decarbonise their portfolios by 2050 or sooner, increase investment in climate solutions, and will need to set interim targets and undertake advocacy and engagement in line with net zero goals. Asset owners will be using the Net Zero Investment Framework as a blueprint for aligning their portfolios with a 1.5C net zero emissions future. The framework supports investors in developing a net zero investment strategy built around five core components: governance and strategy, objectives and targets, strategic asset allocation, asset class alignment, policy advocacy, and investor engagement.

And more pledges – Amazon said that 86 more companies have adopted the “Climate Pledge” it co-founded in 2019 under which corporations commit to net-zero emissions by 2040. New signatories include Procter & Gamble, HP, Salesforce, CarbonCure and Nespresso, and the coalition now counts over 200 members, including existing members like Unilever, Siemens, JetBlue, Coca-Cola and more. The pledges from all signatories combined would cut emissions nearly 2 bln tonnes relative to a 2020 baseline, or over 5% of current annual global emissions, Amazon said. (Axios)

Surveys and consultations – oh my! – The proposal to apply international corresponding adjustments to voluntary carbon market transactions is a hotly debated topic. To understand the experiences and views of stakeholders, offset standard Verra is asking them to respond to a survey on corresponding adjustments no later than Sep. 27. Separately, Verra has opened a public consultation on changes to the Verified Carbon Standard (VCS) Programme until Sep. 22. Proposed changes include options for easy-to-use, dynamic methodologies, updates to reflect the latest scientific research, and the alignment of certain requirements for AFOLU) projects with the JNR Framework. And the American Carbon Registry (ACR) is soliciting public comments on an updated version 2.0 of its approved methodology for Improved Forest Management projects in non-federal US Forestlands. Similar to previous versions of the methodology, greenhouse gas emission reductions are quantified from forest carbon projects that reduce emissions by exceeding baseline forest management practices, and removals are quantified for increased sequestration through retention of annual forest growth.

SCIENCE & TECH

Breakthrough to the other side – The BlackRock Foundation announced a $100 mln grant to Breakthrough Energy’s Catalyst Program to help accelerate the development of the climate solutions necessary to achieve net zero emissions by 2050, MarketScreener reports. Mobilising the $50 trillion in capital necessary to finance the global energy transition will require innovative new partnerships across the public, private, and non-profit sectors, said Larry Fink, chairman and CEO of BlackRock. The partnership with the Catalyst programme represents a five-year philanthropic commitment to invest in cutting-edge science, he added.  The investment will help bring vital clean energy solutions forward – at scale – to achieve the world’s decarbonisation goals and mitigate the uneven impact of climate change on communities. Separately, several US companies including American Airlines, Bank of America, ArcellorMittal, General Motors, and Microsoft on Monday said they were joining the Breakthrough Energy programme, which was founded by Bill Gates. American Airlines also said in a statement it had invested $100 mln. The programme will initially focus on four key areas: direct air capture, green hydrogen, long-duration energy storage, and sustainable aviation fuel.

Tech wreck – The world’s biggest tech companies are coming out with bold commitments to tackle their climate impact, but when it comes to using their corporate muscle to advocate for stronger climate policies, their engagement is almost non-existent, according to a new report. Apple, Amazon, Alphabet (Google’s parent company), Facebook, and Microsoft poured about $65 mln into lobbying in 2020, but an average of only 6% of their lobbying activity between July 2020 and June 2021 was related to climate policy, according to an analysis from the think-tank InfluenceMap, which tracked companies’ self-reported lobbying on federal legislation. The report also sought to capture tech companies’ overall engagement with climate policy by analysing activities including their top-level communications as well as lobbying on specific legislation. It found that climate-related engagement levels of three of the five companies – Amazon, Alphabet and Microsoft – had declined compared to the previous year. (Guardian)

AND FINALLY…

The need for seaweed – In late January, Elon Musk tweeted that he planned to give $100 mln to promising carbon removal technologies, stirring the hopes of researchers and entrepreneurs. A few weeks later, Arin Crumley, a filmmaker who went on to develop electric skateboards, announced that a team was forming to compete for a share of the Musk-funded XPrize. A group of artists, designers, and engineers assembled and discussed a variety of possible natural and technical means of sucking CO2 out of the atmosphere. As the conversations continued and a core team coalesced, they formed a company – Pull To Refresh – and settled on growing giant kelp bladder in the ocean. So far, the venture’s main efforts include growing the seaweed in a tank and testing their control systems on a small fishing boat on a Northern California lake. But it’s already encouraging companies to inquire about purchasing tonnes of sequestered CO2 as a way to balance out their own emissions. Crumley says that huge fleets of semi-autonomous vessels growing kelp could suck up around a trillion tonnes of CO2 and store it away in the depths of the sea, effectively reversing climate change. “With a small amount of open ocean,” he says, “we can get back to pre-industrial levels”. Numerous studies show the world may need to remove billions of tonnes of CO2 a year from the atmosphere by mid-century to prevent or reverse dangerous levels of warming, while more and more companies are seeking to source offsets. All of this has spurred a growing number of companies, investors, and research groups to explore carbon removal approaches that range from planting trees to grinding up minerals to building giant C02-sucking factories. Kelp has become an especially active area of inquiry and investment because there’s already an industry that cultivates it on a large scale – and the theoretical carbon removal potential is significant at between 1-10 billion tonnes/year. But scientists are still grappling with fundamental questions about this approach. How much kelp can we grow? What will it take to ensure that most of the seaweed sinks to the bottom of the ocean? And how much of the carbon will stay there long enough to really help the climate? In addition, no one knows what the ecological impact of depositing billions of tons of dead biomass on sea floor would be. MIT’s Technology Review investigates.

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