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TOP STORY

ANALYSIS: Pre-COP jitters spark doubt over South Korea’s CDM investments in Africa

The fate of the CDM is again on the agenda for negotiators headed to Glasgow for COP26 UN climate talks next month, and the uncertain outcome is creating angst among Korean investors that have spent big developing offset projects while some make back-up plans to switch to the voluntary carbon market.

ASIA PACIFIC

BRIEFING: Indonesia’s hybrid carbon trade and tax scheme explained

Coal producing Indonesia intends to introduce a carbon tax for the power sector next year, though that will work in tandem with an intensity-based emissions trading scheme.

Taiwan proposes carbon tax, eyes 2023 roll-out

Taiwan’s Environmental Protection Administration (EPA) has proposed a low carbon tax for big emitters to be implemented in 2023 in a bid to counter the EU’s carbon border adjustment mechanism (CBAM) and help drive domestic emissions towards net zero by 2050.

Australia releases first draft blue carbon offset method

Australia has published a proposal to award carbon credits to projects that introduce tidal flows to previously completely or partially drained coastal wetland ecosystems.

AMERICAS

NA Markets: RGGI rockets toward $12 for new high, CCAs shake off downswing

RGGI Allowances (RGAs) climbed to new all-time highs again this week on reported steady compliance buying and options activity, while California Carbon Allowances (CCAs) bounced back from their sell-off linked to global energy and EU carbon prices.

Brazilian businesses urge government to yield on Article 6

A Brazilian business organisation is urging the government to give up its opposition to fully applying corresponding adjustments on exported carbon credits, potentially easing the path to a deal on the Paris Agreement’s Article 6 rulebook next month.

Guatemala signs $52.5-mln carbon forestry deal with World Bank’s FCPF

Guatemala has signed an agreement with the World Bank’s Forest Carbon Partnership Facility (FCPF) that will see the central American state receive up to $52.5 million for reducing emissions from forestry and land use, the World Bank announced this week.

EMEA

EU nations show signs of outpacing climate goals, bringing higher ambition within reach -study

Several EU countries are overachieving in their national climate strategies, green groups and analysts said Thursday in findings that suggest the bloc could feasibly raise its 2030 emissions target again to help meet global warming goals.

Euro Markets: Carbon rallies late amid energy surge

A late surge saw EUAs gain more than 4% on Thursday as aggressive buying drove prices higher amid a strong rally in natural gas.

INTERNATIONAL

EU pulling carbon pricing levers as US buckles in energy price squeeze

Soaring energy prices are pinching pocketbooks on both sides of the Atlantic, but the EU may be better equipped at softening the blow because of its carbon pricing system, a panel heard Thursday.

VOLUNTARY

Environmental brokerage Vertis launches voluntary carbon brand

Budapest-headquartered environmental brokerage Vertis has launched a new voluntary carbon markets brand to serve this fast growing segment, it announced Thursday.

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CONFERENCE

Prospero Events’ Carbon Trading and Markets 2021 virtual conference takes place Nov. 8-9. This virtual conference will gather C-level experts responsible for carbon & power trading, carbon markets & pricing, climate policy, ETS and market analysis from leading European energy companies as well as banks and other financial institutions. The conference will focus on discussing the ongoing challenges and trends in carbon markets and carbon trading insights. You can expect presentations and case studies from MOL Group, Enel, HeidelbergCement AG, Fortum, Berenberg, and more. Up to 90 minutes of Q&A and networking time.

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

A matter of principles – G7 Finance Ministers have agreed on a new set of principles aimed at improving global supply chain resiliency and backing a new initiative from the International Monetary Fund (IMF) aimed at helping developing countries boost green economic opportunities. A meeting of G7 Finance Ministers and Central Bank Governors in Washington DC has led to a new agreement on collaborative efforts to monitor supply chain pressures across the globe. (edie)

Tony’s targets – UN chief Antonio Guterres has called for international shipping and aviation targets to be radically strengthened in line with the Paris Agreement stretch target to limit global warming to 1.5C. Climate goals set at the ICAO and the IMO bodies, which sit under the UN umbrella, are consistent with more than 3C of global warming, Guterres said. (Climate Home)

Axa not axes – French insurer Axa has said it will invest €1.5 bln to support sustainable forest management as part of new the world’s new Kunming Declaration commitments to fight deforestation and preserve biodiversity, Reuters reported. Axa said its investment plan includes €500 mln in reforestation projects in emerging countries. Read Carbon Pulse’s article on why the Kunming commitments may complicate the role of offset projects.

Private practice – Over the past decade, opaque private equity firms have quietly bought up a substantial portion of the oil and gas industry, creating the conditions for false progress, and even regression, in the transition to a clean energy economy, the New York Times reports. Since 2010, private equity has invested at least $1.1 trillion into the energy sector – double the market cap of Exxon, Chevron, and Shell combined – with just 12% going to renewable energy. The acquisitions are driven in part because “oil majors [are] feeling the heat,” Alyssa Giachino of the Private Equity Stakeholder Project told the Times. Companies are eager to get oil and gas operations, and their climate pollution, off their books, while “private equity is quietly picking up the dregs, perpetuating operations of the least desirable assets.” With their hyper focus on profit and often without the considerations of reputational risk that keep traditional oil companies from polluting with abandon, private equity firms have become some of the country’s biggest methane polluters – a problem only exacerbated when firms use weak disclosure requirements and complex bankruptcy and restructuring proceedings to evade clean-up requirements. (Climate Nexus)

AMERICAS

Trump all over – US climate envoy John Kerry says COP26 may not get all the results he has been working toward, in part because Congress has yet to act on President Joe Biden’s ambitious climate agenda. In an interview with AP, Kerry says negotiations may fall short of securing commitments from major emitters to stop burning coal and commit to aggressive near-term GHG cuts. A key quote shows Kerry’s frustration with Congress, where major legislation to address the climate crisis is stalled. Failure to pass such legislation, he said, “Would be like President Trump pulling out of the Paris Agreement, again.” (Axios)

You hate to C(EPP) it – US Democratic lawmakers and the White House are thinking of altering their Clean Electricity Performance Program to make a path for natural gas and coal plants to more easily be included – following an appeal from Senate Energy Chair Joe Manchin to include the fossil fuels in Democrats’ signature climate proposal. Lawmakers and the White House could raise the CEPP’s carbon emissions factor, which determines which power plants qualify as clean energy. Under the CEPP text approved by the House Energy and Commerce Committee, the figure stands at 0.1 tonne of CO2/MWh, but people familiar with the discussions told Politico “that number is movable.” There’s another discussion on changing eligibility requirements for the ’45Q’ tax credit, which is designed to incentivise CCS. The alterations paired with a tweaked CEPP could grease the wheels for coal plants to be included.

Offshore sale – The US Interior Department will sell offshore wind leases off both coasts and the Gulf of Mexico by 2025, the Biden administration announced Wednesday. The seven lease sales are part of Biden’s plan to generate 30 GW of offshore wind energy in the next nine years and could create up to 77,000 jobs — the US currently generates just 2 MW of offshore wind energy. The Bureau of Ocean Energy Management, a division of DOI, officially approved the 800MW Vineyard Wind project earlier this year and has nine additional projects currently under review. (Climate Nexus)

Big business – The carbon capture industry is going to be big, says Vicki Hollub, president and CEO of Occidental Petroleum, in the latest episode of CERAWeek Conversations. “It’s going to be a probably $3-5 trillion industry if you look at how much carbon capture is going to be needed around the world,” Hollub says. “We think ultimately it’s going to generate as much earnings and cash flow as our oil business does today. We believe it’s a long-lasting business.” In a conversation with IHS Markit, Hollub and Chris Ashton, CEO and managing director of Worley, discuss their partnership to build a large-scale direct air capture (DAC) facility in the Permian Basin – expected to startup in 2024 – and the potential to scale the technology further. “Once the direct air capture technology that we’re working on together is up and running and we clearly demonstrate that it works and is viable, the scaling opportunities are immense,” Ashton said. “There needs to be a lot of these built over time,” Hollub added in discussing broader plans to build up to 12 facilities in the Permian Basin, along with ambitions to ultimately build facilities elsewhere in the US and internationally. “That’s the only way we can cap global warming at 1.5 degrees. This has to happen in a big way.”

EMEA

Lower your standards – The British government should be willing to water down its environmental standards to persuade other countries to sign trade deals, according to a leaked email circulating around the Department for International Trade. The letter, which was sent to around 120 civil servants across Whitehall this week, said the government should allow other countries to include products of “environmental concern” in trade deals if the issue could “compromise the wider agreement”. The email was not seen by ministers and was sent to a working group of mandarins across a number of government departments. The leak, which was released by Sky News, comes just two weeks before the UK hosts COP26 in Glasgow. It comes after another leaked email to Sky last month revealed the UK dropped climate targets in the text of the Australian trade agreement to close a deal with Canberra. (City AM)

Berlin boost – Germany is planning to ease the pressure on consumers from rising energy bills by cutting the surcharge which helps fund renewable energy investment by 43% next year, industry and government sources told Reuters. The renewable power support surcharge paid to producers is a major contributor to consumers’ electricity bills. It will be cut to around 3.7 euro cents per kWh in 2022 from 6.5 cents in 2021, adding that the government will make up for the loss with a contribution of €3.25 bln.

Ankara asks – Turkey is set to receive loans worth €3.1 bln to help it meet Paris Agreement goals under a planned deal funded by the World Bank, France, and Germany, Reuters reported, citing three anonymous sources familiar with the plan. Turkey last week became the last G20 country to ratify the Paris pact after holding out in protest at being denied developing country status and consequent funding access. Some €2 bln would come from the World Bank, France €1 bln, and Germany just over €200 mln.

ASIA PACIFIC

Net zero pledge – Australian mining services firm Orica announced an ambition to achieve net zero emissions by 2050, covering Scope 1-2 emissions and its most material Scope 3 emissions sources, the company announced. The ambition builds on Orica’s previously announced medium-term target to reduce Scope 1 and 2 operational emissions by at least 40% by 2030.

Canberra out of step – Australia’s state and territory government net zero targets and policies since the start of 2020 demonstrate that the country is capable of meeting global expectations for climate action, according to a new report by think-tank ClimateWorks Australia. According to the report, current Australian state and territory 2030 emissions reduction commitments give the country an estimated de-facto target of 37-42% below 2005 levels. “While this is short of what is needed for the world to limit warming to 1.5 degrees, it is higher than Australia’s current commitment of 26-28 per cent,” says Rupert Posner, ClimateWorks Systems Lead.

Olympic deal – Global mining giant BHP says it has signed a landmark deal with power firm Iberdrola Australia to slash its emissions at its giant Olympic Dam mine by taking power from the new Port Augusta Renewable Energy Park (PAREP) in South Australia, RenewEconomy reports. Olympic Dam is one of the biggest copper, gold, and uranium deposits in the world, and PAREP will be Australia’s biggest wind and solar hybrid facility with 210MW of wind and 110MW of large scale solar when it is fully commissioned next year. BHP says the contract with Iberdrola will slash emissions from the electricity supply to Olympic Dam by half, and it will also means the mine will become the biggest single customer for the new wind and solar project.

VOLUNTARY

You love to C(RW) it – Ship broker Charles R. Weber Company (CRW) on Thursday announced a strategic initiative with North American offset project developer and intermediary Bluesource. CRW said the initiative will allow its clients to calculate and offset their GHG emissions, including Bluesource projects from improved forest management, HFC reduction and capture, and landfill gas.

You love to (Sub)sea it – Subsea 7, a global offshore oil and gas industry services firm, has set a target to achieve net zero GHGs by 2050, the company has announced. In addition, using 2018 as a baseline year, Subsea 7’s target is to reduce its Scope 1-2 emissions by 50% by 2035. These targets are based upon plans to decarbonise Subsea 7’s operations, implementing changes and solutions available today, as well as the deployment of new, cleaner technologies as they become commercially available at scale in the market.

SCIENCE & TECH

Hy hopes, dashed? – Scientists have warned that hydrogen could be a significant “indirect” contributor to the greenhouse effect when it leaks through infrastructure and interacts with methane in the atmosphere. Last year, the European Commission presented a hydrogen strategy, saying that clean hydrogen could meet 24% of the world’s energy demand by 2050 and help decarbonise hard-to-abate industrial sectors like steel and chemicals. Hydrogen only releases water vapour when burned, prompting policymakers to put their hopes into the new gas as a way of tackling climate change. But hydrogen itself is an indirect contributor to global warming, said Steven Hamburg, chief scientist at the Environmental Defense Fund. And its effect on the climate has so far remained largely unexplored. (Euractiv)

AND FINALLY… 

Nobody said DAC was easy, no one ever said removals would be this hard – UK soft-rockers Coldplay have announced a new world tour, and with it a range of initiatives designed to mitigate its environmental impact. The band have pledged to cut CO2 emissions by 50% compared with their 2016-17 world tour, vowing that the remaining unavoidable emissions will be removed by a portfolio of nature-based and technological carbon removal solutions, including reforestation, soil restoration, rewilding, blue carbon projects like such as seagrass meadow restoration, sustainable aviation fuels, and Climeworks’ direct air capture (DAC) and storage plant in Iceland.

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