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CARBON FORWARD

Key MEP urges EU to see past current high energy prices

Current sky-high energy prices must not divert EU lawmakers from reforms to meet the bloc’s climate goals, a senior MEP said on Wednesday while the bloc’s ministers were divided on the issue.

UK carbon auction fails to sell out as linkage talk builds

The UK’s fortnightly carbon allowance auction failed to sell out on Wednesday, with just 80% of the units finding buyers amid below-market bids and an increased clamour by British industry to link the scheme to the EU ETS.

Fuel-switching playing smaller role in EUA price formation -analysts

Fuel-switching economics are playing less of a role in European carbon price formation than financial flows, analysts said, adding that the role of non-compliance participants isn’t affecting the fundamentals of the EU ETS.

Do too many “tourists” spoil the EU ETS broth?

There are too many “tourists” in the EU carbon market, which cause allowance prices to follow “rubbish stuff”, thereby causing unnecessary volatility, a panel heard Wednesday.

EMEA

Euro Markets: Carbon plunges amid extreme energy volatility

EU carbon plummeted by as much as 9% on Wednesday amid numerous bearish pressures including reports of a big emitter unwinding hedges and selling relating to margin calls – all as energy prices swung wildly and EU lawmakers discussed Europe’s energy crisis and possibly curbs to ETS speculation.

Russia considering net zero emissions by 2060, may enhance ambition ahead of COP26

Russia has drafted a new climate strategy that includes a 2060 net zero emissions target, according to local media reports, with the potential to bolster its position ahead of COP26 and respond to looming carbon border adjustment mechanism (CBAM) risks.

ASIA PACIFIC

South Korea weighs another increase in 2030 emissions target

South Korea is likely to bump up its 2030 emissions target again, according to domestic media reports, just weeks after the previous increase, with most of the additional commitment likely to be met through purchasing credits from abroad.

Japan state agency to develop standards for LNG emissions auditing

A Japanese government energy agency will commence work to develop a standard for the measuring of emissions from the LNG sector, it was announced this week.

AMERICAS

Washington state considering reporting-only year for start of LCFS

Washington may choose to eliminate the carbon intensity reduction target during the first year of the state’s low-carbon fuel standard (LCFS), and is considering several scenarios for rearranging the abatement schedule, Department of Ecology (ECY) officials said Wednesday.

LCFS Market: California prices claw back from multi-year lows

California Low Carbon Fuel Standard (LCFS) credit values trended higher over the past week after falling to 3.5-year lows, though traders said the uptick did not signal any fundamental changes in the programme.

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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

Green air – Carbon offsets are preventing big businesses like oil majors from phasing out their use of fossil fuels, Greenpeace’s Executive Director Jennifer Morgan said during a Reuters web conference Wednesday. “These offsetting schemes … are pure ‘greenwash’ so that the companies, oil companies, can continue to do what they’ve been doing and make a profit,” she said. Morgan had previously written a blog for the World Economic Forum in which she described carbon offsets as a method for big polluters to “hoodwink the public into thinking they are finally taking the climate emergency seriously.” Greenpeace says that it supports net zero emissions commitments that are centred on dramatic reductions to burning fossil fuels, as well as nature protection.

ESG slowdown – ESG funds saw net inflows of $110 billion in Q3 2021 – the slowest pace of inflows of the past four quarters, the Institute of International Finance said in a new report. Of this total, emerging market securities attracted a sub-par $4.8 bln of ESG fund flows – less than 5% of the total. LatAm received the largest share of ESG fixed-income flows, while EM Asia attracted the most ESG equity flows. Substantial divergence in ESG fund classifications highlights the lack of commonly accepted disclosure standards, IIF said, with around 20% of the EU fund universe is classified as ESG under the EU Sustainable Finance Disclosure Regulation (SFDR).

EMEA

About time – Turkey’s parliament ratified the Paris Agreement on Wednesday, nearly six years after it signed the treaty. The move comes days after the government’s cabinet approved a goal to meet net zero emissions by 2053. Turkey’s ratification means just five countries have yet to ratify the agreement – Iran, Iraq, Eritrea, Libya and Yemen. But in a declaration approved by lawmakers alongside the text of the Paris climate treaty, Turkey unilaterally declared that it would implement the accord “as a developing country” despite its developed country status in the UN climate convention. The dispute over Turkey’s status is the reason it held out formally endorsing the agreement. Although it signed up to the climate convention as a developed nation, the government has repeatedly argued that it is a developing country and therefore should be allowed to access climate finance – a privilege of the status. (Climate Home)

ASIA PACIFIC

ACTing on carbon – The government in the Australian Capital Territory (ACT) will introduce a price on carbon in order to reduce its own emissions, it said Wednesday as it released its 2021-22 budget. It will put in place the social cost of carbon of A$20 ($14.47) for each tonne of CO2e created by government operations. The government estimates the scheme would cost A$1.34 mln this financial year, but would be able to be offset, according to AAP.

Clean energy deal – Australia is on the brink of signing a clean energy agreement with South Korea that would allow for the use of hydrogen to make steel and transform the iron ore export industry, The Age reports. The deal would give the Morrison government a boost ahead of the Glasgow climate change talks in November where it is facing international scrutiny over its climate ambitions and refusal to commit to net zero emissions by 2050. Australia’s former chief scientist, Alan Finkel, who is now leading the Australian government’s development of low emissions technologies, told South Korean and Australian business leaders on Tuesday that research would enable low-emissions technology to be implemented across the whole iron ore supply chain.

Power plan – Indonesia has announced a new electricity procurement plan that includes up to 500 trillion rupiah ($35 bln) for development of renewable energy-based power plants in the coming decade as Southeast Asia’s largest economy aims to cut its dependence on coal, according to Nikkei Asia. Indonesia’s state utility Perusahaan Listrik Negara (PLN), which holds a monopoly over the country’s power sector, called its latest procurement plan – the RUPTL 2021-30 – its “greenest” to date. Renewables will dominate construction of new power plants to be built nationwide through 2030 – accounting for 51.6% of the total 40.6 GW of planned additional capacity. This marks a substantial increase from 29.6% in the previous 10-year plan released in 2019.

AMERICAS

Doing the hard Shel – CO2 pricing is a very likely component to US Democrats’ $3.5 trillion reconciliation package currently making its way through Congress, Sen. Sheldon Whitehouse told the Plugged In podcast on Wednesday. Whitehouse said that he pitched President Joe Biden’s administration on exempting gasoline from the carbon tax based on a Resources for the Future modelling exercise that showed including gasoline makes little difference to total CO2 mitigation. “It turns out by taking unleaded gas out you lose very little on the emissions side and may gain a great deal of public acceptance,” Whitehouse told the hosts after the interview. The seantor proposed carbon pricing legislation as part of the reconciliation package back in August, and he is also reported to have recently supported a deal that would see the federal ’45Q’ tax credit for CCS raised to $85/tonne as a way to muster broader support for climate components of the deal.

Ready, AIM, fire – The US EPA on Thursday will issue 2022 allowance allocations for the production and consumption of HFCs in accordance with the American Innovation and Manufacturing (AIM) Act of 2020, according to a pre-publication notice in the Federal Register. The trading system under the AIM Act is designed to decrease the production and imports of HFCs in the US by 85% over the next 15 years, with consumption and production allowance caps tightening to 90% of the baseline for 2022-23. Honeywell International will receive the most allowances for production 170 mln tonnes of exchange value equivalent (MTEVe) and consumption (82 MTEVe).

New look NEPA – The US took the first step on Wednesday to restore federal regulations guiding environmental reviews of major infrastructure projects that were scaled back under the Trump administration. The proposal by the White House Council for Environmental Quality would restore key provisions of the National Environmental Policy Act (NEPA) and ensure that environmental reviews account for climate change and other indirect impacts from new projects. President Donald Trump’s administration had overhauled NEPA to fast track project reviews such as the now-cancelled Keystone XL pipeline, allowing regulators to ignore climate impacts, or even skip the impact assessment process altogether for certain project types. (Reuters)

These crackers are making me thirsty –  Chemicals giant Dow announced its plans Wednesday to build a net-zero ethane cracker and derivative complex at its Fort Saskatchewan, Alberta site, that will triple the company’s chemical production capacity. Dow said the project will use best-in-class technology, including CCS and a highly efficient furnace, but stopped short of citing other available alternatives such as electrification. The commitment to net zero in Scope 1-2 emissions for the project, along with ensuring net zero emissions for the entire site, is aligned to Dow’s broader targets of a 30% reduction in net CO2 from 2005 levels by 2030, and to achieve carbon neutrality by 2050.

VOLUNTARY

Defend you – Rocky Mountain region natural gas producer PureWest Energy announced Wednesday what it said was the the first-ever Scope 1 and 2 carbon neutral offering of certified responsibly sourced gas (“RSG”). Last quarter, PureWest received a platinum rating for 90 of its wells on two pads through the independent evaluation company, Project Canary. PureWest said its remaining Scope 1-2 emissions from the two pads have been offset with “robust and defensible” carbon credits, with the initial offsets purchased to cover at least one year of production.

SCIENCE & TECH

Green steel – Nucor is launching a line of net zero carbon steel products called Econiq, and General Motors will be the first to use the product early next year, reports Energy and Environmental Leader. The new steel products will utilise 100% renewable electricity and use carbon offsets to negate emissions, Nucor said. It is another in a line of work the US steel maker has done to lower its carbon impact in producing efficient and carbon neutral steel. The company announced in July that it would reduce the GHG intensity of its steel mills by 77% and cut Scope 1-2 emissions by 35% by 2030. Nucor said it would implement new energy efficiency projects, invest in recycled steel facilities, and pursue CCS in an effort to reach the goals.

AND FINALLY…

Subsidising fuel for the fire – The fossil fuel industry benefits from subsidies of $11 mln every minute, according to analysis by the International Monetary Fund. The IMF found the production and burning of coal, oil, and gas was subsidised by $5.9 trillion in 2020, with not a single country pricing all its fuels sufficiently to reflect their full supply and environmental costs. Experts said the subsidies were “adding fuel to the fire” of the climate crisis, at a time when rapid reductions in carbon emissions were urgently needed. Explicit subsidies that cut fuel prices accounted for 8% of the total and tax breaks another 6%. The biggest factors were failing to make polluters pay for the deaths and poor health caused by air pollution (42%) and for the heatwaves and other impacts of global heating (29%). (Guardian)

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