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TOP STORY

Methane fee, tax credits survive climate cuts to US spending package

The White House released its compromise deal for its deadlocked spending package on Thursday, with President Joe Biden confident that substantial cuts to key climate and social provisions mean the measure can pass Congress after months of testing negotiations.

VOLUNTARY

Voluntary initiative sticks to hard line on offsetting in corporate net zero goals

Companies must halve their emissions by 2030 and cut them 90-95% under 2015 levels before 2050 to meet net zero emissions targets endorsed by the Science-Based Targets initiative (SBTi), with only the remaining output neutralised through carbon removals.

Shell aims for 50% cut in Scope 1 & 2 emissions by 2030

Oil major Shell will target a 50% absolute cut in its Scope 1 and 2 emissions by 2030, the company said in Q3 results on Thursday, adding that part of the goal would be met by a “limited amount” of offsets.

Spot exchange CBL plans carbon offset contract aligned with TSVCM principles

ESG commodities marketplace Xpansiv’s CBL platform on Thursday said it will introduce a new standardised voluntary emissions reduction (VER) contract based on initial principles recommended by the Taskforce on Scaling Voluntary Carbon Markets (TSVCM).

ASIA PACIFIC

China keeps headline targets unchanged in updated NDC

China released its updated climate plan under the Paris Agreement on Thursday, but without raising its emissions reduction ambition levels.

AU Market: ACCUs rise to A$35.50 as supply squeeze remains

Australian carbon credits jumped another 4.4% to a new record high in Thursday trade, as a lack of available spot supply continued to underpin the recent bull run.

New carbon fund to target Asian, Australian buyers

Two financial institutions on Thursday announced a new joint carbon fund targeting voluntary offset buyers in Asia and Australia, starting with a $500-million portfolio of nature-based credits.

Japan taps South East Asia for CCUS offset projects

Japan is eager to scale up offset generation under its Joint Crediting Mechanism (JCM), and this week proposed at the Japan-ASEAN Summit to open the scheme up to CCUS projects, with intentions to study possibilities for a large-scale JCM CCUS facility in South East Asia.

EMEA

UK unveils plans for mandatory climate risk disclosures from next year

Large British companies will be forced to report their climate-related risks from next year, according to government plans unveiled on Thursday that would make the UK the world’s first nation to impose detailed mandatory disclosures.

Euro Markets: EUAs drop to five-day low as gas slides on supply expectations

EUAs struggled to recover early losses on Thursday after a sharp drop at the open, as energy markets reacted to reports that Russia may boost natural gas supplies to Europe from early next month.

Utility RWE sees EU ETS-covered emissions rise nearly 24%

Germany-based utility RWE, the EU’s top corporate emitter, reported a 23.5% jump in its ETS-covered thermal power output for the first nine months of the year, it said late Thursday.

UK firm launches small-scale CCUS technology, eyeing $30/tCO2 cost

A British company has launched what it claims is the world’s smallest industrial carbon capture solution, a technology aiming to overcome a key barrier to widespread CCUS adoption and industrial decarbonisation, the company said on Thursday.

AMERICAS

NA Markets: California carbon hits $31, RGGI $13 before both retrace

California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices both registered new all-time highs this week, though the records proved short lived as the bull run cooled off in the WCI programme and Pennsylvania’s Democratic gubernatorial candidate signalled hesitancy about participating in the Northeast US power sector scheme.

Canada’s 2030 climate plan deemed credible, but speed of implementation crucial -analysis

The Canadian Liberal government’s climate plan could allow the country to meet its enhanced Paris Agreement target, but this depends on the speed of the regulatory trail and other administrative processes, according to independent modelling released Thursday.

RFS Market: RIN prices head south as traders await biofuel quotas

US biofuel credit (RINs) prices fell to a one-month low on Thursday as market participants said refiners were absent from the market as stakeholders wait for the EPA to publish two years’ worth of Renewable Fuel Standard (RFS) volumes.

INTERNATIONAL

US envoy Kerry touts six-fold hike in adaptation aid as COP26 credibility at risk

US climate envoy John Kerry stressed his country’s pledge to drastically hike adaptation aid to poor nations on Thursday, but experts questioned the undertaking that still lacks lawmaker approval just days before UN climate talks.

Game-changing hydrogen set to disrupt future global energy trade, report says

Major fossil fuel exporters can accelerate the energy transition by mastering future growth in the global hydrogen trade, a report from an energy consultancy released on Thursday claimed.

Microsoft, Goldmans back new climate impact asset manager launched by Al Gore’s Generation IM

Former US Vice President Al Gore’s Generation Investment Management has launched a new subsidiary aimed at helping limit the global temperature rise to 1.5C by catalysing and scaling capital towards the most impactful climate solutions.

ECOSYSTEM MARKETPLACE

Shades of REDD+: Managing expectations for Glasgow

Glasgow is likely to produce a decision on the implementation modalities for market mechanisms under the Paris Agreement. However, those expecting that such a decision would lead to a flurry of investments into Article 6 transactions may see their hopes frustrated by governments’ and corporates’ lack of appetite for such transactions. But closing the Paris Rulebook will still be important, if only to put voluntary carbon markets on stable ground.

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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

Sky-high ambition – Britain is asking countries to push for a global target to cut aviation emissions to levels compatible with the Paris Agreement, under a deal due to be announced at the COP26 summit, according to a draft document seen by Reuters. As COP26 host, Britain is rallying countries to join an “International Aviation Climate Ambition Coalition” to commit to supporting the adoption by the UN’s ICAO of an “ambitious long-term aspirational goal that is compatible with net-zero global emissions by 2050”, the draft said.

Go to (S)hell, hedge funds – Royal Dutch Shell’s CEO has warned that replacing long-term shareholders with hedge fund investors risked derailing the energy sector’s transition plans at a critical moment in the climate crisis. The comments by Ben van Beurden follow a decision this week by one of the world’s largest pension funds to sell its entire holdings in fossil fuel companies and come a day after it was revealed that Daniel Loeb’s activist fund Third Point had called for Shell’s break-up. “It is disappointing [and] actually I don’t think this makes any positive difference for the energy transition,” van Beurden said of the divestment announcement from ABP of the Netherlands, adding that Shell had not been informed of the decision in advance. “We prefer to have long-term investors in our share base with whom we can talk about our strategy, who we can dialogue with on how to tune it up,” he said. “Replacing long-term thoughtful investors by, say, hedge funds is not necessarily for the benefit of the energy transition either, because they typically do tend to have a different philosophy when it comes to owning us.” Third Point, which has built a $750 mln stake in Shell over the past 12 months, said in a letter to shareholders this week that it had urged the energy major to split into “multiple companies” to deliver better value through the energy transition. Those separate companies could include, for example, a legacy oil, refining and chemicals business, and a gas, renewables and marketing business, it said. (FT)

EMEA

Loophole plugged – The European Investment Bank (EIB), the lending arm of the EU, has vowed to close a loophole that allows it to lend money to oil and gas firms despite a ban on financing fossil fuel projects. The EIB, the world’s largest multilateral bank, which is active in 160 countries, announced in 2019 it was phasing out lending to fossil fuel projects within two years, as it sought to become a “climate bank”. Although the move was welcomed as a victory for the climate movement, campaign groups said the bank had failed to close several loopholes. Now the lender has acted to close one inconsistency with the bloc’s climate goals. From 2022 onwards, the EIB will stop lending to polluting companies that want to finance low-carbon projects. This would mean, for example, the EIB will no longer finance an oil company’s wind energy project. All recipients of EIB loans will be required to draw up decarbonisation plans. (Guardian)

Coal alliance – The EU will launch a project with South Africa at the COP26 summit to speed up the country’s exit from coal, European Commission President Ursula von der Leyen said, adding that the US, the UK, Germany, and France were also involved. EU sources said the partnership would focus on a “just transition” in South Africa, by providing support to the regions and workers in coal industries that would be affected by a phaseout. (Reuters)

Berlin lacking – Germany will have to buy 22 mln intergovernmental AEA emissions units after failing its 2020 targets under the EU’s non-ETS effort sharing scheme, and has already approached other EU states that exceeded their targets, the country’s environment ministry told Reuters. Buying emissions allocations will not be expensive because many eastern European countries have surplus quotas that will expire from 2021 and can’t be transferred. Just last year and in expectation of falling emissions, the German government ceased to allocate a budget for a possible 2020 EU target miss. Read Carbon Pulse’s article from earlier this week on how the EU said that the bloc as a whole achieved its main climate targets, but that Bulgaria, Cyprus, Finland, Germany, Ireland, and Malta are some of the nations that will need to use flexibilities to comply.

BNP hiring spree – BNP Paribas intends to hire 100 people as part of a plan to create a unit it says will wean corporate and institutional clients off activities that emit too much CO2. The division will help clients mobilise capital to make it easier for them to shift over to low-carbon business models, BNP Paribas said in a statement on Wednesday. BNP’s low-carbon transition group will be led by Severine Mateo, who previously helmed the bank’s energy, resources and infrastructure department. Once BNP has finished hiring new people, the unit is expected to have a headcount of 250, it said. (Bloomberg)

AMERICAS

What COVID? – Brazil’s GHG emissions increased by 9.5% in 2020 largely due to increased deforestation in the Amazon during the second year of far-right President Jair Bolsonaro’s government, according to a report published by climate change experts SEEG. While most countries generated less carbon emissions during the economic crisis caused by the coronavirus pandemic, Brazil in 2020 emitted 2.16 bln tonnes of CO2e, up from 1.97 bln in 2019, according to the study. (Reuters)

Ag-vice – Rostin Behnam, US President Joe Biden’s pick to chair the Commodity Futures Trading Commission (CFTC), says the derivatives regulator should have some input in the development of agricultural carbon markets to ensure they operate fairly. Behnam appeared before the US Senate Ag Committee – which has jurisdiction over CFTC – for a confirmation hearing Wednesday and offered thoughts on how the agency could play a role in protecting carbon markets from manipulation and other fraudulent practice. “We’re creating a financial market where credits are going to be bought and sold, and it’s important to have a market that has integrity, that has transparency, and that’s free from fraud and manipulation,” Behnam said. “If you can create that, then the outcome of what you’re trying to accomplish – sequestering carbon and getting money to producers and ranchers, farmers, and foresters pockets – will be accomplished,” he added. (Agri Pulse)

Seeking units – Consultancy Gordian Knot Strategies has released an RFP for carbon credits on behalf of a multinational Fortune 500 company. It aims to secure an undisclosed amount of credits for 2022-25 procurement, with applicants who can provide more than 500,000 a year given priority. The RFP, closing is also seeking partners and projects to form the basis of a pipeline of future projects for 2025-30.

VOLUNTARY

We fly so you can soar cleanly – American Airlines is more aggressively leaning into sustainable aviation fuels and research into new propulsion technologies to reach its goal of net zero emissions in 2050, the company tells Axios. American’s planned reliance on sustainable aviation fuels, which are made from sustainable feedstocks like household solid waste or algae, has increased compared to last year’s agenda. Here’s how the airline plans to get to net zero:

• 39% from sustainable aviation fuels (SAFs).
• 17% from next-generation planes.
• 17% from carbon offsets.
• 15% of emissions cuts would come from buying new, more efficient planes to replace older aircraft.
• 9% from air traffic control modernization to enable more efficient flight paths.
• 3% would come from operational efficiency gains.

“The engine makers have really been pushing the barriers and trying to figure out how we can get to 100%” of SAFs in aviation fuel, rather than a 50% blend with traditional aviation fuel, an American Airlines official told Axios.

Rem-Amber me – Crypto trading and technology firm Amber Group on Friday announced a strategic partnership with Moss Earth, an environmental platform looking to tokenise voluntary emissions reductions (VERs). Hong Kong-headquartered Amber Group purchased 250,000 VERs for $2 mln – equating to an average price of $8/tonne – and enough to offset the cost of more than 280,000 bitcoin transactions. The partnership comes days after digital currency protocol Klima DAO purchased 6.8 mln VCS units in the week following its launch.

CERT cash – Digital CO2 verification platform SustainCERT, the official certification body for the Gold Standard, on Thursday announced the completion of a $10 mln capital raise. The round was led by impact investment fund Citizen Capital and venture capital firm Innovacom, joined by the Microsoft Climate Innovation Fund. Prior to this round, SustainCERT had spun-off from the Gold Standard Foundation in 2018, raising seed capital from the Gold Standard Foundation, World Wildlife Foundation (WWF) Impact Ventures, Blue Orchard, and 1to4 Foundation, who maintain an ownership stake in the Company.

Meta day – IHS Markit today announced the launch of its Carbon Meta-Registry, “a secure online platform that seamlessly connects disparate environmental markets and registry systems around the world, enabling the exchange of carbon market data and mitigating the risk of double-counting of credits”. Programmes engaged with the Meta-Registry span national programmes, sub-national programmes, international CORSIA-approved standards and domestic voluntary programmes, including: Acre Carbon Standard, Global Carbon Council, Gold Standard, Plan Vivo Foundation, Papua New Guinea, UK Peatland Code, UK Woodland Carbon Code, and Verra. In early 2022, the Meta-Registry will expand to offer exchange connectivity to connected programmes and standards. The announcement coincidentally came the same day Facebook announced it was rebranding as Meta. Read Carbon Pulse’s initial piece on the IHS project here.

You love to McKinsey it – More than 1,100 McKinsey employees have signed an open letter to the consulting firm’s top partners, urging them to disclose how much carbon their clients spew into the atmosphere, The New York Times reported. Among the 100 biggest corporate polluters over the past half-century, McKinsey has advised at least 43 in recent years, including BP, ExxonMobil, Gazprom, and Saudi Aramco. McKinsey’s work with these companies is often not focused on reducing their environmental impact, but rather on cutting costs, boosting productivity and increasing profits. McKinsey was also a key partner in the development of the Taskforce on Scaling up the Voluntary Carbon Markets.

ASIA PACIFIC

Go on… Show us, Scott – PM Scott Morrison, is resisting pressure to release the modelling underpinning the Coalition’s plan to achieve net zero emissions by 2050, amid growing criticism that Australia’s climate policy lacks credibility. Morrison has committed Australia to a net zero by 2050 emissions reduction target ahead of the Glasgow climate summit next week, but he hasn’t announced any new policies or legislation to achieve it. The government has also refused to update its 2030 emissions reduction target of 26-28% of 2005 levels – despite this being the focus of the Glasgow summit – instead releasing updated projections that show Australia will reduce emissions by 30-35% compared to 2005 levels. After releasing an updated technology roadmap on Tuesday that assumes the lowering cost of technology will allow Australia to reach its net zero goal, the government has faced a barrage of criticism from experts about the lack of detail in the plan. The “technology not taxes” document released by Morrison suggests 40% of the emissions reduction task is achieved through the technology roadmap, while 30% comes from unspecified global technology trends, and “further technology breakthroughs”. Climate advocate Mike Cannon-Brookes derided the updated plan as “more bullshit”, saying the government’s claimed technology-driven approach was “inaction, misdirection and avoiding choices”. (Guardian)

AND FINALLY…

Subpoen’ em and weep – US Representative Carolyn Maloney said on Thursday she intends to issue subpoenas to four major oil companies for documents on what their internal scientists have said about climate change and any funding they are doing to mislead the public on global warming. Maloney made the remark at the end of a House Oversight Committee hearing on climate disinformation in which lawmakers grilled the heads of Exxon Mobil, Shell, BP America, and Chevron. “We need to get to the bottom of the oil industry’s disinformation campaign with these subpoenas,” Maloney said, adding she had draft subpoenas ready. Meanwhile, top executives from the oil giants said they agreed with Maloney on the existence and threat posed by climate change, but they refused her request to pledge that their companies would not spend money — either directly or indirectly — to oppose efforts to reduce GHG emissions. The committee released a memo Thursday charging that the oil industry’s public support for climate reforms has not been matched by meaningful actions, and that the industry has spent billions of dollars to block reforms. Oil companies frequently boast about their efforts to produce clean energy in advertisements and social media posts accompanied by sleek videos or pictures of wind turbines. (Reuters, AP)

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