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TOP STORY

EU’s 2nd largest political group calls for ETS spec curbs, Czech PM wants price cap, to help mute energy costs

The EU’s second largest political grouping is proposing to put forward next month a resolution in European Parliament that calls for restrictions on speculation in the bloc’s carbon market as a way of calming soaring energy costs, while Czechia’s Prime Minister is reportedly urging for a cap on EUA prices.

AMERICAS

CBAM impacts loom large on US businesses, as House may leave carbon tax stranded with reconciliation bill

American businesses are being warned of looming export carbon costs ahead of Thursday’s infrastructure bill vote, which could leave the $3.5 trillion reconciliation package and its CO2 price component in limbo amid Congressional negotiations.

USDA considering voluntary carbon market as part of rural sector climate initiative

The US Department of Agriculture (USDA) on Wednesday outlined a new climate programme to benefit the agriculture and forestry sectors, and is requesting public input on how the voluntary carbon market (VCM) can fit in to the initiative.

Green group refutes Dominion arguments in RGGI rate request petition

A green group argued Wednesday that the Virginia State Corporation Commission (SCC) must either reject Dominion’s rate request to recover nearly $168 million in RGGI obligations for failing to perform least-cost analysis or require future examination of additional compliance options.

RFS Market: RINs bounce back as lawmakers turn up heat on biofuel volumes

US biofuel credit (RIN) prices jumped on Wednesday to reverse weeks of losses, coming as corn-state legislators warned the EPA against possibly lowering Renewable Fuel Standard (RFS) blending quotas.

ASIA PACIFIC

China could reach carbon neutral well before 2060 -IEA

China has the capability to start reducing its CO2 emissions from the mid-2020s and become carbon neutral well ahead of its 2060 target date, the International Energy Agency said Wednesday.

CBAM to leave Chinese steel, aluminium uncompetitive in Europe without fast emissions cuts, bank warns

Chinese steel and aluminium will be priced out of the European market when the EU’s carbon border adjustment mechanism (CBAM) kicks in in 2026, unless the sectors decarbonise fast, according to an analyst report published on Wednesday.

Australia’s NSW sets higher ambition for emissions reduction by 2030

New South Wales has upwardly revised its 2030 target to reduce emissions, to 50% from the level in 2005, an increase from its previous target of 35%, the Australian state government announced on Wednesday.

EMEA

Euro Markets: EUAs rally as gas jumps further on tight winter supply outlook, as fund numbers climb

EUA prices ended Wednesday higher, shrugging off one of the worst-supported daily auctions since the EU began selling allowances, while natural gas prices hit new records as analysts predicted a tight market over the winter months.

EUAs ripe to fall amid political uncertainty, weaker natural gas after winter -analyst

European carbon prices could be set for further downside after setting a new record this week, as uncertainty over the EU’s ‘Fit for 55’ package grows amid the start of political negotiations and as lawmakers amplify calls for a limit on speculation in the market, according to an analyst.

ICYM

Four Korean ETFs to track EU, US carbon

Three South Korean asset managers have announced plans to launch a total four new exchange traded funds that will track carbon prices in the EU, California, and RGGI.

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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

AMERICAS

La bomba – US Senators on Tuesday questioned members of the Federal Energy Regulatory Commission (FERC) on a wide range of policy and legislative issues – including electric transmission, gas infrastructure, and energy market design – with Republicans often using their platform to cast doubt on Democrats’ clean energy and decarbonisation plans being considered by Congress. The House’s proposed Clean Electricity Performance Program (CEPP), which would incentivise utilities to deliver more renewable energy, is an “H-bomb” that would “effectively end the markets,” FERC Commissioner James Danly (R) said. The five-seat commission is currently split evenly between Democrats and Republicans, and Senate Committee on Energy and Natural Resources Ranking Member John Barrasso directed his questions about the CEPP only to Danly and Commissioner Mark Christie, the commission’s Republican members. (Utility Dive)

Enbridge fuels – Canadian pipeline operator Enbridge said on Tuesday it had signed partnerships with oil major Shell and Vanguard Renewables to make low-carbon fuels. Enbridge will buy 2 bln cubic feet (57 mln cubic metres) of renewable natural gas (RNG) annually from Vanguard and collaborate with Shell on potential green and blue hydrogen production. The company said it would buy RNG from eight anaerobic digesters that Vanguard will spend $200 mln to build and operate in the US Northeast, Southeast, and Midwest. Enbridge added it can replicate the project across the United States, and could double the RNG it sells within several years. (Reuters)

Buried at Sea(brook) – Iowa-based Renewable Energy Group will close its 35 mln gal (132 mln L)/year biodiesel plant located in Seabrook, Texas due in part to its inability to process multiple feedstocks, the company said in a statement Wednesday. The company acquired and commissioned the plant in 2008 and will completely shut down the Houston plant in Nov. 2021. The closure of REG’s Houston plant will leave the US Gulf Coast region with 14 plants, down from the 18 in 2019, and the US total at 74, according to Energy Information Administration data. This is down from the 102 plants operating across the US in 2019. Biodiesel capacity has been dropping due to rising feedstock costs, as biodiesel vies for supply against the rising production of “drop in” fuels like renewable diesel. (S&P Global Platts)

ASIA PACIFIC

Going up – New Zealand’s GHG emissions rose 2.1% in 2019, Stats NZ said on Wednesday. The increase came as the low rainfall in the North Island forced some regions to generate more electricity from coal. In Waikato, where the Huntly power station is located, emissions rose by over 1 MtCO2e year-on-year, the agency said.

Green exports – A new report from an Australian climate policy think-tank, Beyond Zero Emissions, shows that Australia could grow a new green export mix worth A$333 bln per annum, almost triple the value of existing fossil fuel exports. The report demonstrates new green export industries will meet surging demand for zero-carbon products, such as green steel, renewable hydrogen, ammonia, green aluminium, and critical minerals that will dominate global economic growth this century.

EMEA

Rosneft heft – Russia’s Rosneft and US firm ExxonMobil have signed a memorandum of understanding on cooperation with an aim to reduce GHG emissions, Reuters reports, with Rosneft saying earlier that it had signed a similar deal with Norway’s Equinor . The two oil majors will consider the prospects for new projects initially focused on CCUS and the development of lower-carbon fuels, such as hydrogen and ammonia. Both companies are partners in an oil production project Sakhalin 1 in Russia’s Pacific. Read Carbon Pulse’s article on Sakhalin, the Russian region planning a carbon trading pilot for next year and to become CO2 neutral by as early as 2025.

VOLUNTARY

Mini methodology – Offset standard American Carbon Registry (ACR) announced it has approved an offset methodology from improved forest management on small non-industrial private forestlands. The methodology quantifies GHG reductions and removals resulting from IFM activities on aggregated ownerships of non-industrial private forestlands, ranging from 40–5,000 forested acres (16-2,000 ha). Emission reductions are quantified from forest carbon projects that exceed baseline forest management practices, and removals are quantified for retention of annual forest growth. The primary carbon sequestration mechanism is the commitment to forego harvesting, grow trees longer, and increase forest stocking. Despite owning nearly 40% of US forestlands, less than 1% of small forest ownerships have enrolled in the carbon market to date, ACR said.

Carratu incoming – Asset management and carbon advisory firm Viridios Capital has appointed Domenic Carratu as a London-based senior portfolio manager. Carratu was head of commodities and carbon at Rabobank over 2003-20. He joins the investment group, which is developing indices for voluntary carbon credits driven by artificial intelligence software.

AND FINALLY…

Drone on – DroneSeed, a US startup that helps speed reforestation to fight climate change, has raised $36 mln in series A funding. Instead of people, the company employs automated drones equipped with specially engineered seed packets and dispensers; they fly low over the landscape, identifying the best places for seed packets, and fire them off. Drones can deliver dozens of seed packets or, with a more offensive loadout, spray invasive plants that inevitably appear in the wake of fires before trees can take root. The financial innovation that DroneSeed feels confident will support its work is ex-ante carbon credits, generated before the actual emissions reduction is verified. Here, the trees are planted, and the land then put under a long-term easement to legally ensure it isn’t going to be logged. An independent forestry team inspects the land after a year or two, confirming the number and health of the planted trees. (Axios, TechCrunch)

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