Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

CARBON FORWARD

EU industry to face diverging carbon costs from new policies

The EU’s heavy industry could face considerably different carbon costs through 2050 as proposed changes under the European Commission’s Fit for 55 package leads to variations between both sectors and locations, the Carbon Forward 2021 conference heard this week.

INTERNATIONAL

GCF board approvals bring total spending to $10 bln

The Green Climate Fund board this week approved $1.2 billion in funding for 13 projects, including a major investment in the Amazon Bioeconomy Fund, which is expected to cut carbon emissions by over 123 MtCO2e.

EMEA

Poland to start handing out 2021 EUAs to industry next week

Poland will begin distributing free allowances to industrial installations for their 2021 output next week, its emissions trading authority confirmed Friday, while other member states are reported also to have begun issuing EUAs nearly eight months later than scheduled.

Euro Markets: EUAs slide back below €60 for 6% weekly loss

EUAs tumbled back below €60 on Friday as participants wound down after a week of significant volatility in energy markets and ahead of at least one large member state starting free allocations next week.

EU leaders pushing for ETS alignment as part of climate reforms in Western Balkans

Western Balkan leaders were told this week that EU accession rests on significant reforms, including over 50 requirements for aligning with the bloc’s ETS and other climate and environmental ambitions.

ASIA PACIFIC

Japex announces its first carbon neutral LNG deal

Japan Petroleum Exploration Co. (Japex) has secured its first  carbon neutral LNG cargo, the oil and gas company announced on Friday, adding to the fast-growing stream of offset-backed fossil fuel deals in the Asia-Pacific region.

Australia Market Roundup: Govt extends crediting period for coal mine waste gas, as supply crunch looms

Australia has extended the period for which coal mine waste gas projects can earn carbon credits, as spot ACCUs linger at record high levels amid limited available supply.

Hong Kong raises mid-term emissions target, pledges 2035 coal phaseout

Hong Kong on Friday committed to cutting its greenhouse gas emissions 50% below 2005 levels by 2035 and to phase out the use of coal for power generation by the same year.

AMERICAS

Minnesota governor commences stakeholder process to inform LCFS development

Minnesota Governor Tim Walz (D) on Thursday ordered state agencies to work on ways of decarbonising transportation fuels as part of a low-carbon fuel standard, after legislators this year failed to pass a related bill.

Financials, emitters largely keep California carbon holdings stagnant amid price surge

Speculators and regulated entities under the WCI cap-and-trade programme mostly kept their California Carbon Allowance (CCA) positions flat this week as prices hit new all-time highs, although greater fluctuations occurred in the futures-only market, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

VOLUNTARY

Journalist turned analyst joins offset raters BeZero

A former journalist has joined offset ratings service BeZero as its head of carbon markets research.

———————————

Premium job listings

• *Carbon Market Associate, The Nature Conservancy – Arlington/London/Elsewhere
• Global Carbon Markets Program Manager, The Nature Conservancy – London/Brussels
• Director of Fund Operations, Conservation International – Arlington/Seattle/Remote
• Senior Portfolio Manager, Conservation International – Arlington/Seattle/Remote
• Chief Portfolio Officer, Emergent – Barcelona/NYC/Miami preferred
• Director, Climate Smart Solutions, Radicle – Canada
• Carbon Project Developer, ClimatePartner – Munich
• Head of Research and Innovations, SustainCERT, Luxembourg / Amsterdam / Switzerland / Elsewhere

*New listing

Or click here to see all our listings

———————————

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

Fight for your right – The UN Human Rights Council on Friday backed a Swiss-sponsored resolution to recognise a new fundamental right: access to “a safe, clean, healthy and sustainable environment”. The text proposed by Switzerland, Costa Rica, the Maldives, Morocco, and Slovenia passed comfortably, and prompted what Reuters reported as a “rare burst of applause in the Geneva forum”. Despite criticism of the text in the lead-up by countries including the US and the UK, the vote passed with 43 in favour and four abstentions (Russian, India, China, and Japan). It will put extra pressure on countries to take more action on environmental change, which High Commissioner Michelle Bachelet said last month was shaping up to be “the most important challenge for human rights” across the world. Although the text is not binding, some countries said during the debate that a new law should be passed to make it so; the Human Rights Council has also called on the UN General Assembly to discuss the question further. (swissinfo.ch)

Gearing up to gear down – The Science-Based Targets Initiative (SBTi) recorded a record week for companies joining the 1.5C Business Ambition campaign, a pledge to align GHG pathways to the Paris temperature goals. Almost 60 companies signed on this week, bringing the total to 906 businesses  – representing over $13 trillion in market cap. Companies must commit to slashing Scope 1 and 2 emissions as well as interim targets for Scope 3 emissions whenever these represent more than 40% of the total. Companies report their emissions annually and are allowed CO2 removal credits to help meet goals. The initiative, launched in 2019, has seen an increasing number of commitments ahead of the COP26 climate talks scheduled to begin in just 19 days, with signatories counting towards the ‘Race to Zero’ campaign led by High-Level Champions for Climate Action, Nigel Topping, and Gonzalo Munoz.

In da climate club – The European Commission will convene a ministerial meeting next year to promote trade as a way of reaching climate and environmental objectives in what could be the first step towards the creation of a “climate club” called for by Germany. “I commit to building a coalition of trade ministers across the globe who want to take action to promote trade in green goods and services,” Valdis Dombrovskis, the Commission vice-president in charge of the economy, said on Thursday. “To take this forward, I will call for a ministerial meeting devoted to trade, climate and sustainability next year,” the Latvian Commissioner said at the EU sustainable investment summit in Brussels. The initiative could be the first step towards creating a “climate club” that Germany has been calling for. Olaf Scholz, the country’s finance minister and possibly its next chancellor, has urged the EU to create a climate club with other countries like the United States, Japan, and possibly even China. The move would seek to ease trade frictions linked to green tariffs such as the EU’s planned carbon border levy, aimed at protecting European industries against cheaper imports of high-polluting goods. (Euractiv)

EMEA

Athens answers – Greece will double power and gas bill subsidies and increase handouts to help households tackle soaring energy prices, it said on Friday, Reuters reported. The relief will reach €500 mln, up from subsidies of about €150 mln announced in September amid soaring power and gas prices. Energy Minister Kostas Skrekas said the subsidies would be mainly funded by revenues from the sale of EUAs, declaring the government would “leave no household and no Greek citizen unprotected”. Read Carbon Pulse’s latest on EU plans to cope with the sky-high energy prices look set to avoid interfering with the EU ETS, defying Greece’s proposal to auction allowances from the Market Stability Reserve as a short-term measure to help raise cash.

Well get building then – Germany will have to build about 20-30 GW of new gas-fired power plant capacity to ensure supply security as the country exits nuclear and coal power, RWE CEO Markus Krebber told WirtschaftsWoche. “We still underestimate how many new gas-fired power plants we need in Germany,” he said. “At the moment, our security of supply is based entirely on nuclear energy, lignite and hard coal. We have few gas plants. But nuclear energy and coal must be completely replaced in order to establish security of supply.” He said fossil gas can only be a bridge to a decarbonised electricity supply and Germany needed a strategy for the transition to green hydrogen. “As an energy supplier, we have no desire to have the discussion we are having about coal today about gas again in ten years’ time,” said Krebber. As Germany ramps up renewables and exits coal and nuclear power, it may need more gas power capacity, which would mostly be put to use at times of high electricity needs and little wind or sunshine – and not necessarily lead to more overall gas consumption. Think-tank Agora Energiewende has proposed to build several small units in key areas of the country. But other researchers are adamant that existing reserves and future European interconnections are sufficient without great gas capacity additions needed, and grid operators are confident that the system will remain stable also after the last nuclear plant is shut down in Dec. 2022. (Clean Energy Wire)

Capturing Berlin – CCS on a large scale will be necessary for Germany to reach its 2045 target of climate neutrality and the next national government should devise a CO2 strategy to provide the right regulatory framework, said an alliance of industry and environmental NGOs including Foundation 2C, Bellona and Clean Air Task Force. It said CCS is a key pillar to make industry climate neutral. (Clean Energy Wire)

Chopped down – Forestry ministers of six EU countries strongly criticised the European Commission’s forestry strategy following an informal meeting in Vienna this week, saying the Commission had not sufficiently respected the principle of subsidiarity. In a joint statement issued Tuesday, the forestry ministers of Germany, France, Finland, Sweden, Slovakia and Austria, who held an informal two-day meeting in Vienna, did not mince their words in complaining about the strategy. According to the six countries, the Commission had not involved member states in preparing the forest strategy, which it had presented in July, and had thus not sufficiently respected their “competences … in forestry in the sense of subsidiarity”. “What we … do not need is more bureaucratic red tape from Brussels,” said German Forestry Minister Julia Kloeckner. “We therefore clearly oppose the weakening of the principle of subsidiarity in this area,” she added. In their statement, the ministers also called for EU countries to be more closely involved in the EU forest strategy and “broad expertise in the member states” to be better recognised.

ASIA PACIFIC

Almost there – South Korea’s 2050 Carbon Neutral Committee on Friday officially proposed to lift the country’s 2030 emissions target to 40% below 2018 levels, from the 35% goal that was set in August. The new target will now be debated by stakeholders, ahead of a final decision to be made on Oct. 18. As Carbon Pulse reported earlier in the week, the additional commitment will mostly be met through the purchase of international carbon credits.

More of the coal, please – Chinese officials have ordered the country’s two top coal regions to act immediately to expand their annual production capacity by more than 160 Mt as China battles its worst power crunch and coal shortage in years, Reuters reports. Shanxi, China’s biggest coal-producing region, ordered its 98 coal mines to raise their annual output capacity by 55.3 Mt over the remainder of the year, it said, citing officials, while China’s No. 2 coal region, Inner Mongolia, asked local authorities to notify 72 mines that they may operate at stipulated higher capacities immediately, provided they ensure safe production.

Clean aim – Japan’s finance ministry will start using foreign reserves to buy securities that meet environmental, social, and governance (ESG) criteria, it said on Friday, according to Reuters, joining a global tide of investors focusing on such issues. Japan’s $1.4 trillion in foreign reserves are predominantly held by the Ministry of Finance and are believed to comprise mainly USD due to past interventions in foreign currency markets to weaken the yen. The latest plan will be put into effect as soon as possible, making Japan the first country among the G7 nations to use foreign reserves for ESG investments, a MOF official said.

Green hydrogen plan – Australia’s Northern Territory (NT) government has released a Renewable Hydrogen Master Plan to guide development of a renewable hydrogen industry in the territory. The Master Plan focuses on renewable or green hydrogen and builds on the NT government’s 2019 Renewable Hydrogen Strategy’s vision to be a world-scale producer and exporter of renewable hydrogen. According to the NT government, the Northern Territory is well placed to position itself at the forefront of the developing renewable hydrogen industry with large areas of land, high solar irradiance, close proximity to export markets, and an established world-scale energy production and export industry.

Solar-powered hydrogen – Australian iron ore magnate Andrew Forrest’s Fortescue Future Industries (FFI) plans to build a 1 GW solar manufacturing facility in Australia to slash costs and “build green energies at scale” after buying a majority stake in Dutch solar and hydrogen technology group HyET, according to Renew Economy. The purchase of a 60% stake in HyET is the first concrete move by Forrest and FFI to fulfill his grand vision of rolling out more than one hundred gigawatts of green hydrogen capacity in Australia and around the world, fuelled by renewables.

AMERICAS

Dem. Tug-of-war -A group of Senate Democrats yesterday dug in their heels against potential funding cuts to climate programs in the $3.5 trillion reconciliation bill, as the Biden administration continues to negotiate the context of the legislative package with Democratic moderates. “We must act in Congress before Joe Biden goes to meet with the rest of the world,” Sen. Ed Markey said during a news conference with environmental groups, according to E&E news. “President Biden must be able to put a deal on the table that reflects what we then expect from the rest of the world.” Sections of the bill that need to be protected include the Clean Electricity Performance Programme, the Civilian Climate Corps, a green bank, a proposal to phase-out fossil fuel subsidies, and tax credits for clean technologies, the senators said. The group were also critical of any suggestion that natural gas be considered as a climate solution. “Let me be clear: Natural gas is not clean energy, and it is not climate action,” Markey added. Meanwhile, the Senate on Thursday approved a short-term debt ceiling increase until at least December, paving the way for an easy vote in the Democrat-controlled House next week which would prevent a US debt default.

LAC it or not– Speakers at a side event to the Latin America & the Caribbean (LAC) Climate Summit on Friday said that carbon pricing initiatives are increasingly being considered in the region, pointing to schemes already underway in Mexico, Chile, Argentina, and Columbia, while interest is accelerating in other regions including the Caribbean. “In the forthcoming years, we’ll see more and more carbon pricing instruments in the Americas, partly because of the discussions in Europe, in terms of their carbon border adjustment mechanism and other initiatives, and also because of pressure coming from our neighbours in the north, now that a new government is pushing towards more and more climate action,” said Eduardo Piquero, director at consultancy MexiCO2, during the event hosted by business lobby IETA. The LAC climate summit took place from Oct. 6-8 with a strong focus on carbon pricing and market mechanisms to address climate change.

Lender bender – JPMorgan Chase & Co said Friday it was joining the UN’s Net Zero Banking Alliance, a group of global banks that have committed to dramatically reducing their carbon financing and investment activities. As the largest US bank and a major lender to the fossil fuel industry, JPMorgan has been criticised for not joining the group, which launched in April, sooner. A JPMorgan executive said it was time to join rivals Bank of America, Citigroup, Morgan Stanley, and others in aligning its climate plan with the UN’s Race to Zero campaign. Member banks are required to submit science-based climate plans that cover all types of emissions, include 2030 interim targets and commit to transparent reporting and accounting. Banks have 18 months to set the 2030 interim targets. Critics say the group’s targets are too weak and flexible.

SCIENCE & TECH

Sneaky leaks – Satellites spotted several large clouds of methane near fossil fuel infrastructure in Iran, which is one of the largest producers of natural gas and responsible for the world’s third-most emissions of the super-potent GHG from oil and gas activities. The methane plumes were identified by geoanalytics firm Kayrros SAS using European Space Agency data. The largest leak occurred on Sep. 5 in the southwest of the country near the border with Iraq. The rate of release was about 95 tonnes per hour, which has approximately the same climate-warming impact as 4,700 cars running for one year. There were two other leaks in September in the same area, one on Sep. 17 that emitted 34 t/hr and another on Sep. 24 that released 36 t/hr. Additionally, on Sep. 12 just south of Tehran, a leak released about 54 t of methane per hour. All the clouds were seen near gas pipelines owned by the National Iranian Gas Company. The leaks in the south were also near an oilfield, but a spokesperson for Kayrros said pipelines were the most likely source as those leaks happen often during routine maintenance. (Bloomberg)

AND FINALLY…

Something could burst – In the context of skyrocketing gas prices and calls for Russia to supply more gas to the EU, Russian President Vladimir Putin appeared to exclude Ukraine as a transit country for such additional supplies. However, he said Russia would fully comply with its present contractual obligations for the transit of gas through Ukraine to Europe. Commenting on the possibility of increasing gas supplies through Ukraine, Putin recalled that Ukraine’s gas transport system had not been repaired “for decades” and that “something could burst” there at any moment. There is currently only one new pipeline system in operation – TurkStream, which supplies Russian gas under the Black Sea to Turkey and further to the EU via Bulgaria. Nord Stream 2, the other pipeline supplying Russian gas to Germany under the Baltic Sea, has been completed but is not yet certified by German and EU authorities. Both pipelines circumvent Ukraine, a goal Russia has been pursuing since the 2009 gas crisis. (Euractiv)

Got a tip?  How about some feedback?  Email us at news@carbon-pulse.com