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TOP STORY
FEATURE: Airlines place bets on sustainable fuels in long haul net zero effort
The aviation sector has recently stepped up its climate ambitions and the ramping up of sustainable aviation fuels (SAF) use will kickstart early efforts by airlines to get on a net zero pathway.
EMEA
ANALYSIS: EU seen resisting Poland’s call to slow climate effort, may bolster support measures
Poland’s plea to cancel or delay EU climate action and curb carbon market speculation is unlikely to gain enough support among the bloc’s leaders, experts said on Tuesday, although it could end up bolstering mechanisms to help poorer citizens cope.
Euro Markets: EUAs plunge nearly 8% after technical breach triggers selling
EUAs extended Monday’s losses as sellers continued to test technical support levels on Tuesday, amid a general weakness in energy markets.
UK unveils net zero strategy, selects two CCS projects
The UK government set out its strategy for meeting its net zero 2050 target on Tuesday, fleshing out more medium-term policy details and selecting two CCS projects for funding.
AMERICAS
US EPA may not release RFS volumes until infrastructure, budget bills agreed
The US EPA may not put forth preliminary biofuel quotas for 2021-22 under the Renewable Fuel Standard (RFS) until Congress can hammer out an agreement on the bipartisan infrastructure bill and Democrat-led reconciliation package, a conference heard Tuesday.
EJ groups mounting opposition to New York LCFS bill -lawmaker
Efforts to pass a Low Carbon Fuel Standard (LCFS) bill in New York are running up against opposition from environmental justice (EJ) groups worried about the effects of the market-based programme in their communities, a co-sponsor of the legislation said Tuesday.
Harvard study shows power of small CO2 price in reducing US electricity sector emissions
A carbon tax combined with tax credits for renewable energy could push the US electricity sector towards deep decarbonisation by 2030, according to academic modelling results released this week.
VOLUNTARY
Pressure mounting on demand-side credibility for VERs as corporate pledges build
The continued swell in climate commitments made by corporates and other actors has meant rapid growth in the demand for carbon offsets, but the journey to net-zero requires integrity checks along the way, a panel heard Wednesday.
Carbon markets veteran recruited by Xpansiv for management role
A carbon markets veteran has been recruited by ESG commodities trading platform Xpansiv for a management role leading the development of the firm’s exchange operations.
ASIA PACIFIC
South Korea eyes bilateral carbon credit deals with four nations
South Korea is in negotiations over bilateral carbon credit cooperation with four countries, with one framework agreement already signed, government documents showed.
US trading house hires first China-based carbon trader
A US-headquartered trading house has hired its first China-based emissions trader as it seeks to get into the fledgling Chinese compliance market as well as expand its presence in the voluntary market.
ECOSYSTEM MARKETPLACE
Shades of REDD+: Filling an Urgent Need – New Guidance for ‘Nested REDD+’ Published
Over the last months, several companies have announced an aggregate of more than two billion dollars of investments – in particular trading houses or major emitters – in voluntary carbon market projects that champion nature-based solutions. At the same time, the LEAF coalition is encouraging the development of jurisdictional REDD+. For such initiatives to peacefully coexist, there is an urgent need for countries to build “nested” REDD+ systems.
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CONFERENCE
Prospero Events’ Carbon Trading and Markets 2021 virtual conference now takes place on Dec. 6-7. 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
Let’s work together – The director general of the World Trade Organisation said that it should work together with other international bodies to develop a global price for carbon. Ngozi Okonjo-Iweala told business leaders in London that prices for carbon are hugely divergent across the world. “We have different regimes that range from less than $1 a tonne in Ukraine for CO2, to $130 per tonne in Sweden,” she said. “For businesses, I think this is a bit of a nightmare, having to navigate all of this.” Okonjo-Iweala said international institutions should develop a way of making sure that all countries are on the same page around carbon pricing. “I am advocating that the four international institutions – the International Monetary Fund, the World Bank, the WTO and the OECD – be tasked to come together by the G20 or other world leaders to develop a common methodology to a global carbon price,” she said. “This would really help business, it would help households, it would even help finance ministers.” (PA)
Clean sailing – Amazon and IKEA are among commercial users of container shipping that will opt for zero-carbon marine fuels by 2040 in a new initiative aimed at speeding up decarbonisation in the maritime sector, executives said on Tuesday. With about 90% of world trade transported by sea, global shipping accounts for nearly 3% of the world’s CO2 emissions and the sector is under growing scrutiny to become cleaner. The initiative, which was organised by the non-profit Aspen Institute and has nine signatories so far including others such as Unilever and Michelin, sets a goal for companies to only purchase ocean freight services powered by scalable zero-carbon fuels by 2040. But before then, banks are demanding much stricter environmental criteria when financing shipping companies as investor pressure grows on the sector to accelerate going greener, according to Boston Consulting Group, which forecasts the industry will need $2.4 trillion to achieve net zero emissions by 2050. (Reuters)
AMERICAS
Mas to come – Mexico committed to expanding its climate change goals by 2022 following a visit by US climate advisor John Kerry, foreign minister Marcelo Ebrard said on Tuesday. Kerry was in Mexico on Monday to meet with his counterparts ahead of COP26, which neither President Andres Manuel Lopez Obrador nor Ebrard are expected to attend. Ebrard, speaking in a regular news conference, said Mexico will reiterate its established climate goals at COP26, but added that Lopez Obrador had agreed to expand them by 2022. The country is currently aiming to slash GHG some 22% below BAU levels by 2030. (Reuters)
Final fantasy – President Joe Biden’s US emissions-cutting pledge isn’t a fantasy, but the path to meeting it is very difficult and relies on forces outside of White House control, according to Rhodium Group analysis of policy combinations that could close the gap between the current US trajectory and Biden’s vow under the Paris Agreement to cut emissions in half by 2030. The gap between what’s projected under current policy and achieving the target is 1.7-2.3 bln tCO2e in 2030, and the biggest abatement opportunities this decade are from speeding up electric power sector transformation. Rhodium’s pathway for slashing GHGs doesn’t include Democrats’ proposed Clean Electricity Performance Program or fees on methane emissions, given the high political hurdles in Congress, although the analysts noted Congress is “critical” to meeting the goal. (Axios)
CSA on climate – Demonstrating its support for the growing international movement towards mandatory climate reporting standards, the Canadian Securities Administrators (CSA) have launched a consultation on proposed requirements for reporting issuers pertaining to climate-related disclosures. According to the CSA, the disclosure contemplated in the requirements is largely consistent with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). But the CSA’s proposed requirements depart slightly from the TCFD recommendations by not requiring a “scenario analysis” describing the resilience of its strategy under different climate-related situations, such as a 2C or lower scenario. Issuers would have to disclose their Scope 1-3 emissions and their related risks, or their reasons for not doing so, but under an alternative approach put forward by the CSA, issuers would only have to disclose Scope 1 GHGs. (Wealth Professional)
Laissez dans le sol – The province of Quebec will end all oil and gas exploration, Premiere Francois Legault confirmed Tuesday during his inaugural speech at the National Assembly. The province has no commercial-scale fossil fuel production, but significant shale reserves from both oil and gas have been found. The commitment aligns to recommendations from scientists and the International Energy Agency that says regions must leave most fossil fuels in the ground to meet climate targets under the Paris Agreement. Local media had reported on the potential ban back in September, including what this may mean in terms of compensation claims from the 182 exploration permits that have already been granted, or how this may impact the province’s ability to attract foreign investment more broadly. Quebec Minister of Natural Resources and Energy Jonathan Julien told Radio Canada last month that the commitment was part of the province’s climate change plan to reduce GHGs 37.5% below 1990 levels by 2030.
Fossil-free foundations – Two heavyweight American grant-making foundations are pledging new efforts to orient their endowments toward more climate-friendly investments. The Ford Foundation – one of the nation’s largest – said Monday that it will no longer invest in fossil fuels via its $16 bln endowment. The McKnight Foundation, in a separate announcement, said it would achieve net zero emissions across its $3 bln endowment by 2050. Ford said its fossil holdings have already fallen over time to 0.3% of its direct investments, while McKnight noted its pledge would mean halting fossil fuel investments and phasing out existing ones “over time” (Axios)
EMEA
Efficiently insufficient – Germany’s emissions reduction efforts will not be sufficient for achieving the country’s climate targets, the government’s 2021 Projection Report has found. The report, compiled by the Institute for Applied Ecology (Oeko-Institut), confirmed an earlier draft released in August, which predicted that emissions in Germany would fall by 49% by 2030 and by 67% by 2040 compared to 1990 levels. The climate targets stipulate a reduction of 65% and 88%, respectively. “Germany would thus miss its climate targets in the next two decades if no additional measures are taken,” the institute concluded. The report took all measures into consideration that had been taken until the end of Aug. 2020. The energy sector would contribute the largest emissions reduction in the next few years, thanks to the phaseout of coal power, more renewable energy installations, and rising carbon prices in the EU ETS. Emissions in the sector are projected to fall to 193 Mt by the end of the decade and to 75 Mt by 2040, thereby exceeding the sectoral target. More efficient buildings and the shift to electric cars would further contribute to emissions reduction, albeit at a much lower scale. Building sector emissions reduction would fall short by about 11 percentage points by 2030 (57% reduction of 68%) and transport emissions reduction even by 25 percentage points (23% instead of 48%). Industry emissions are expected to fall by 45% instead of 58% by 2030. (Clean Energy Wire)
Microsoft, meet Micro-toff – Microsoft billionaire Bill Gates and UK Prime Minister Boris Johnson are allocating a total of £400 mln to scale up underinvested green technologies to cut carbon emissions in Britain, Politico reported. The two announced the pledge at the Global Investment Summit on Tuesday. The event, designed to promote investment in Britain ahead of the COP26 climate summit, attracted 200 investors – including big-name bankers at Goldman Sachs, JPMorgan, and Blackrock – with nearly £10 bln in deals announced.
How did the host of COP18 not have one already? – Qatar’s emir created an environment and climate change ministry on Tuesday. In a government reshuffle, Faleh bin Nasser al-Thani was named minister of environment and climate change in the world’s top LNG exporter, weeks before COP26 in Glasgow. (Reuters)
ASIA PACIFIC
Noise goes on – The bickering within Australia’s Coalition government over a climate strategy and net zero target continues, though Barnaby Joyce, leader of the junior National party, on Tuesday agreed Prime Minister Scott Morrison from the Liberal party was in his right to decide that a decision on whether or not to commit to net zero should be made by the cabinet. (Guardian)
More CCS offsets – Australian nickel miner Western Areas on Tuesday said the mineral composition of its mines made CCS through carbon mineralisation available for its operations. The company is working with experts at the University of British Columbia to establish the potential carbon removal potential, and with the local mining industry on how to develop an offset methodology under Australia’s carbon credit programme, it said in its annual ESG report.
VOLUNTARY
Tell me who you’re loyal to – Southwest Airlines on Monday announced a series of goals and actions to achieve carbon neutrality relative to 2019 levels. Among the strategies, Southwest will partner with Choose.TM and customers by providing the first US-based airline carbon offset offer with loyalty points. For every dollar contributed toward offsetting Southwest’s carbon emissions, the company will match the contribution, which the airline said will be used to purchase credits “from any carbon offset project of Southwest’s choice”. Additionally, the Dallas-headquartered carrier will reduce its Scope 1-2 emissions per available seat mile by at least 20% by 2030 through fleet modernisation, route optimisation, and other initiatives, and replace 10% of its total jet fuel consumption with sustainable aviation fuels (SAFs) by the end of the decade.
Requis-em for a GHG – Supply chain platform Requis announced a partnership on Tuesday with Chicago-based carbon credit developer Tradewater. Users of the Requis platform can now purchase offsets from Tradewater’s offset projects that destroy refrigerants.
AND FINALLY…
Some Men-chin just want to watch the world burn – US Sen. Joe Manchin said on Tuesday that he is not talking about a carbon tax in negotiations over Congress’ spending and infrastructure bills, even as some of his fellow Democrats in the Senate support it as a way to fight climate change. Some Democrats, including Sen. Ron Wyden, have focused on a carbon tax as a possible alternative as Manchin opposes a key measure in the spending bill called the Clean Electricity Payment Plan. Manchin, who reportedly raked in $500,000 last year from a coal brokerage he founded in 1988, instead urged lawmakers to pass the $1 trillion bipartisan infrastructure bill before the wider spending bill and in time for the UN climate talks begin in Glasgow next month, However, progressive Democrats have said the bills should be passed together to ensure that the debate on wider legislation on climate and social programmes does not slip into next year, or get abandoned altogether. Yet one senator involved in the talks told Politico Playbook Tuesday afternoon that Dems are “very, very close” to a deal on the climate provisions in the reconciliation bill and that a carbon tax, despite Manchin’s comment, is indeed still on the board. (Reuters, Business Insider)
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