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TOP STORY
South Africa adopts deeper 2030 emissions target, Sasol aims for net zero
South Africa’s cabinet has adopted a slightly more ambitious nationally-determined contribution (NDC) to the Paris Agreement, going further than an initial draft, as one of the nation’s biggest emitters commits to net zero and boosts near-term goals.
EMEA
Euro Markets: EUAs flat while UKAs soar to new record amid lack of sellers
EUA ended the day virtually unchanged on Thursday even as volatility increased after Wednesday’s options expiry, while UK Allowances posted their second-biggest ever price increase to set a new record amid a lack of selling.
Judge says EU court should uphold withdrawal of carbon units from bankrupt airline
A judge has recommended that the EU’s highest court uphold a member state’s right to withdraw the free emissions permit allocation of a bankrupt airline.
AMERICAS
NA Markets: California carbon re-tests all-time high, RGGI inches to new record
California Carbon Allowance (CCA) values flirted with recent record highs this week after recovering from a brief dip, while RGGI Allowance (RGA) prices eked out their own fresh all-time high on lighter volume.
Republicans express concerns about intervention in “wild west” voluntary carbon market through US ag offset bill
The US House Agriculture Committee heard testimony Thursday on bipartisan bill H.R.7393 that would see farmers better prepared to face the “wild west” voluntary carbon market, including through gov. certification of third-party verifiers.
Dominion seeks denial of RGGI proceeding reconsideration for lack of merit
Virginia utility Dominion Energy asked the State Corporation Commission (SCC) to reject a petition from an environmental group to reconsider approval of a rate request to recoup $168 million for RGGI-related costs, according to a regulatory filing.
LCFS Market: California credits recede toward $160 as bearish factors weigh
California Low Carbon Fuel Standard (LCFS) credit values declined closer to the $160 mark on Thursday, recording multi-year lows as bearish factors continued to apply topside pressure.
ASIA PACIFIC
Guangdong clean power auction attracts moderate interest, premium prices
China’s Guangdong province on Thursday held its first auction of clean power for which buyers will be issued green certificates, a new type of credit that could emerge as a competitor to offsets.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
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AMERICAS
About time – The US EPA finalised a rule on Thursday that will slash the use of potent HFC gas by 85% over the next 15 years, a move that will help the country halve its GHG output emissions this decade. The rule aims to phase out the use of the gas commonly used in refrigerators and air conditioners and carries out legislation passed with bipartisan support in Congress last year. It would make the US compliant with the Kigali Amendment to the Montreal Protocol – a global treaty to reduce HFCs that the US has not yet ratified. “It really sends a signal to the rest of the world that we are all in on climate change,” National Climate Advisor Gina McCarthy said, adding that she does not know when President Joe Biden will send the amendment to the Senate for ratification. The EPA said the rule is one of the most “consequential” in terms of its climate impact. Along with additional interagency measures, it can reduce 4.5 bln Mt of CO2e by 2050 – equal to nearly three years of power sector emissions at 2019 levels, according to a White House fact sheet. The EPA rule creates an allowance allocation and trading system to reduce HFCs and is reviewing over a dozen petitions to restrict HFC use in other applications. (Reuters)
EMEA
In Soviet Russia, carbon taxes you – Russia is considering drafting its own carbon tax as the EU prepares one to avoid cross-border taxes for Russian firms, the Vedomosti newspaper reported on Thursday, citing three sources. The European Commission has outlined plans to impose a CBAM on polluting goods from 2026 that will force some importers to pay carbon costs at the border on carbon-intensive products such as steel. Moscow has said the tax could affect Russian goods worth $7.6 bln, including iron ore, aluminium, pipes, electricity and cement, and that the tax could eventually be broadened to affect oil, gas and coal exports. “Neither the government, nor business, is interested in the EU collecting payments from Russian exporters at its discretion,” Vedomosti cited a source close to the government as saying. “The key logic is to get ahead of the EU with developing national regulation, to make it comfortable for business and to have the Russian offset measures be on a par with the European ones.” The mechanism’s development is expected to take 12-18 months, one source said. The government plans to soon set up working groups with business representatives, the newspaper added. A senior Russian official earlier this year said his country is rolling out new domestic voluntary carbon offset rules and is considering extending its embryonic emissions trading scheme nationally in order to have its climate efforts recognised internationally and thus exempt itself from the EU CBAM. (Reuters)
Money at risk – European energy firms Centrica and Galp, food group Nestle, and watchmaker Swatch are among 50 companies worldwide that are highly exposed to physical climate risks, investors with $10 trillion in assets said on Thursday. The companies, which are involved in energy, mining, food, pharmaceuticals, technology, manufacturing, transport, and utilities, are more exposed to issues such as flooding than other companies in their sector and region, the Institutional Investors Group On Climate Change (IIGCC) said. In a letter to the European, Asian, and US companies from more than 50 IIGCC members, the investors asked the firms to identify properly and respond to events such as flooding, droughts, and extreme heat. The IIGCC also published a set of expectations for all companies on building resilience to physical climate change risks, including scenario testing and reporting against a set of risk metrics. (Reuters)
Buying more time – Member states on Wednesday pushed back their deadline to object to the EU’s proposed rule book for green investments, giving themselves another two months to scrutinise the politically sensitive policy. The EU’s “sustainable finance taxonomy” is a list of economic activities and the rules they must meet to be labelled as green investments, starting next year. Aimed at stamping out “greenwashing”, Brussels hopes the rules will steer private capital into truly climate-friendly projects. EU countries are scrutinising the European Commission’s proposal for the first section of the taxonomy, which defines “green” investments in sectors including transport and heavy industry. With the delay, representatives from EU countries will now have until early December, instead of October, to scrutinise the rules, according to a public document for the representatives’ meeting. During that period, a majority of countries or the European Parliament could object to the taxonomy proposal and block it. (Euractiv)
Everybody insulate – Germany will spend an additional €5.7 bln on making buildings more energy efficient after emissions in the sector exceeded government targets last year. The sum agreed by ministers comes on top of another €5.8 bln allocated earlier this year, which was deemed insufficient by the government’s Council of Experts on Climate Change, brings the total for 2021 to €11.5 bln. Energy minister Peter Altmaier said the measures represented “record sums never seen before,” adding it was “money well spent on climate protection and jobs.” The money will support the exchange of windows, insulating exterior walls and roofs, and installing heat pumps, as well as other steps to ensure lower energy use. But green group Environmental Action Germany (DUH) said the spending will do little to lower emissions, as the government should have refocused existing modernisation programmes and raised construction standards instead. “A huge opportunity was lost to bring the funding programmes in line with the climate protection goals – this must become a priority task for the new federal government,” DUH said. Green Party energy policy spokesperson Julia Verlinden also said the outgoing government had prevented real emission cutting progress in the sector for years, and was now “desperately pouring billions” into a lost cause given that building standards are out of date. The building sector exceeded its 2020 Climate Action Law budget of 118 Mt by 2 Mt. (Clean Energy Wire)
ASIA PACIFIC
Showing commitment – EnergyAustralia has reaffirmed its commitment to the clean energy transition with an updated Climate Change Statement, the company said on Thursday. The Australian utility has set new targets, including the reaching of net zero greenhouse gas emissions by 2050, reducing direct carbon dioxide emissions by over 60% on 2019-20 levels by 2028-2029, and transitioning out of coal assets by 2040. Mark Collette, EnergyAustralia’s managing director, said “the clean energy transformation is accelerating, with more renewable, storage and flexible energy technology available at lower costs than ever before.” One of the pivotal changes to EnergyAustralia’s climate statement is its commitment to an earlier retirement date for the Mt Piper coal-fired power station in New South Wales.
VOLUNTARY
Up the funding – Investors managing a collective $6.6 trillion are pressing the finance industry to boost funding for carbon removal methods and standardise offsets as part of the effort to keep global warming within 1.5C of pre-industrial levels. Cutting the amount of CO2 in the atmosphere should remain the primary focus for investors, according to a position paper from the UN-convened Net-Zero Asset Owner Alliance, a consortium of asset managers. As much as 1.2 bln tonnes of CO2 must be removed annually by 2025 to meet the goals laid out by the Paris Agreement, and that total needs to reach 10 bln tonnes by mid-century. (Bloomberg)
AND FINALLY…
AI, AI uh-oh! – Researchers are developing artificial intelligence that could assess climate change tipping points, with deep-learning algorithms possibly acting as an early warning system against runaway climate change. A new paper looks at thresholds beyond which rapid or irreversible change happens in a system. “We found that the new algorithm was able to not only predict the tipping points more accurately than existing approaches, but also provide information about what type of state lies beyond the tipping point,” said Chris Bauch, a professor of applied mathematics at the University of Waterloo. Some tipping points that are often associated with runaway climate change include melting Arctic permafrost, which could release vast amounts of methane and spur further rapid heating; breakdown of oceanic current systems, which could lead to almost immediate changes in weather patterns; or ice sheet disintegration, which could lead to rapid sea-level change. After training the AI on what they characterise as a “universe of possible tipping points” that included some 500,000 models, the researchers tested it on specific real-world tipping points in various systems, including historical climate core samples. The new deep-learning algorithm is a “game-changer for the ability to anticipate big shifts, including those associated with climate change”, said Madhur Anand, another of the researchers on the project and director of the Guelph Institute for Environmental Research. Now that their AI has learned how tipping points function, the team is working on the next stage, which is to give it the data for contemporary trends in climate change.
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