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UN climate envoy Mark Carney insisted carbon credits could play a role in corporate climate action on Wednesday, despite protestors disrupting a COP side event seeking to establish credible offsetting practices and denouncing commitments set out by a coalition of hundreds of banks.
Estimates that the global voluntary carbon market could be worth $100-180 billion in 2030 are overly optimistic, with actual volumes and prices likely to stay well below the forecasts made by the private-sector Taskforce on Scaling Voluntary Carbon Markets (TSVCM), a report said on Wednesday.
Several developing countries have taken aim at the plethora of public and private net zero plans that rely on new technologies in the future to produce negative emissions while continuing to emit today.
The Asian Development Bank (ADB) launched at COP26 in Glasgow on Wednesday a partnership with Indonesia and the Philippines to help wean the two key Southeast Asian economies from their reliance on coal-fired power.
With heads of state now largely gone, day 3 of COP26 in Glasgow turns its attention to finance while officials get busy in closed-session technical negotiations.
The first ever physically-backed, exchange-traded carbon investment vehicle will launch on the London Stock Exchange on Thursday.
EUAs climbed on Wednesday to test a major price level for the fifth time in the last fortnight, while energy prices soared to extend Tuesday’s rally.
The UK government will auction 80.5 million carbon allowances under its emissions trading system next year, marking an almost 4% drop from this year’s volumes, sale hosts ICE said late Wednesday.
RGGI Allowance (RGA) prices see-sawed wildly on Wednesday morning after Virginia Republicans were projected to take control of both the governor’s office and House of Delegates in Tuesday’s election, while Maine residents approved a ballot initiative to prohibit construction of cross-border hydro line to deliver clean energy to Massachusetts.
As many as 52% of the carbon credits generated by Indian wind farms under the Kyoto Protocol came from projects that would likely have gone ahead even without carbon finance, said a study released Wednesday.
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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
Nice while it lasted – Carbon emissions have rebounded to near pre-pandemic levels, according to a study released on Thursday, with coal and natural gas emissions surging in the power and industry sectors even as transportation emissions remain low. “We were expecting to see some rebound. What surprised us was the intensity and rapidity of the rebound,” said the study’s lead author Pierre Friedlingstein, a climate modelling researcher at the University of Exeter. In 2020, CO2 emissions fell by a record 1.9 billion tonnes – a 5.4% drop – as countries locked down and economies ground to a halt. The new report, produced by the Global Carbon Project, forecasts emissions to rise by 4.9% this year. Among major emitters, China and India are expected to post higher emissions in 2021 than in 2019, while the United States and Europe are expected to have slightly slower emissions. China was an outlier in 2020 because investments to spur pandemic recovery led to large increases in coal use, even as emissions in other countries dropped. The study projected total global emissions this year to reach 36.4 bln tonnes of CO2. (Reuters)
Bad kind of calm – Energy-related CO2 emissions in Germany are estimated to be 4% higher in 2021 than in the previous year, as overall energy consumption grew while the share of renewables in total energy consumption saw a slight decline, energy data organisation AG Energiebilanzen (AGEB) said. Overall energy consumption in Germany is expected to increase by 3% this year, mainly because of the general economic recovery after the pandemic lockdowns, but also due to higher heating energy demand during the very cold spells at the start of the year. At the same time, significantly lower wind power supply due to calm weather meant that renewable electricity was substituted with conventional sources such as coal and nuclear. AGEB’s calculations, based on the first nine months of 2021, show that both the absolute and temperature-adjusted consumption values are still noticeably below 2019 levels. Consumption of nuclear, hard coal, lignite, and natural gas all increased significantly while the use of mineral oil decreased. Renewables reduced their contribution to primary energy consumption by 2% in the first nine months. Their share in total energy consumption fell to 16.1% from 16.9% in first nine months of 2020, with wind generation declining by 18% on land and 14% at sea. Solar PV remained at the same level as the year before and biomass consumption increased by 3%. Germany remained a net power exporter during the first three quarters of this year. (Clean Energy Wire)
Falling short – Climate action programmes introduced by the current and previous coalition governments under chancellor Angela Merkel aren’t enough for Germany to reach its GHG reduction targets, the 2021 climate protection report published by the country’s environment ministry confirmed. Measures and programmes introduced by the government in previous years – such as the Climate Action Programme 2030, which was agreed in 2019 – are inadequate for reaching Germany’s 2030 target of a 65% cut compared to 1990 levels. They are not even enough to reach the old, less ambitious target of 55%, which was in place until earlier this year. The report takes into account all measures agreed by Aug. 2020 and says Germany is on track to reduce emissions by 49-51% by 2030. In addition, Germany’s Climate Action Programme 2020, initiated in 2014 to ensure the country met its 2020 targets, was a lot less effective than planned. The report found the programme managed to reduce emissions by 42.2-51.7 Mt of CO2e, while the goal was to reduce them by 62-78 Mt. (Clean Energy Wire)
Not quite net zero – Australia has more than 100 fossil fuel developments in the pipeline that could result in nearly 1.7 bln tonnes of GHGs a year – equivalent to about 5% of global industrial emissions – if all were to go ahead, according to analysis from a Canberra think-tank The Australia Institute, reports The Guardian. The Australian government lists 116 major coal and gas projects under development, each valued at more than A$50 mln ($37 ml) and with the potential to reach a final investment decision in the next five years, according to the report. Although not all the projects will be built, the report says it is an indication of the fossil fuel development that continues in Australia, including with taxpayer support, despite the Morrison government committing to net zero emissions by 2050.
Capturing carbon in Asia – ExxonMobil and Pertamina, the state-owned energy company for Indonesia, on Wednesday signed a Memorandum of Understanding (MoU) to evaluate the potential for large-scale deployment of low-carbon technologies in Indonesia, ExxonMobil has announced. The companies have agreed to assess the potential for technologies such as CCUS and low-carbon hydrogen. By jointly examining subsurface data, the companies expect to identify geologic formations deep underground that could be suitable to safely store CO2.
Coffey and RD – CVR Energy is moving forward with plans to produce renewable diesel (RD) at its Wynnewood, Oklahoma refinery in spring 2022 after halting the proposal earlier this year due to high soybean oil prices, executives said on Tuesday. However, plans to produce renewable fuels at its Coffeyville refinery in Kansas will depend on the expansion of low-carbon fuel standard programmes throughout the US. CVR Energy is eying production of 50 mln gal (189.3 mln L) of renewable fuel at Coffeyville, potentially including 25 mln gal of sustainable aviation fuel if regulatory conditions change. (Reuters)
Give a little Bit – Crypto exchange BitMEX spent $100,000 on carbon credits, representing 7,100 MtCO2e, to offset its bitcoin carbon footprint for the next year. The purchase, equating to an average price of just over $14/tonne, was executed through offset marketplace Pachama, with the exchange picking carbon credits from reforestation projects in India, Peru, Brazil, Nicaragua, and Colombia. The credits will match the environmental footprint from both its bitcoin transactions and the servers powering the exchange, making it one of the first crypto exchanges to become fully carbon neutral, BitMEX said. (CoinDesk)
SREC the unexpected – ESG commodities marketplace Xpansiv on Wednesday announced it has acquired environmental commodity management and transaction platform SREC Trade, Inc. SREC Trade’s platform manages 870 MW of renewable energy assets across its base of 50,000 customers, and in the California Low Carbon Fuel Standard (LCFS) market, SREC Trade said it is the largest independent manager of electric vehicle charging station carbon credits across more than 5,000 generating assets.
SCIENCE & TECH
Hail Satan – Near-50C heatwaves are likely to hit Europe once every three years, and could become an annual occurrence if action is not taken to mitigate climate change, the i newspaper reports. This is according to an analysis by the UK Met Office that was broadcast on BBC’s Panorama on Wednesday. “The summer of 2021 was Europe’s hottest on record, with a mean summer temperature of 20.6C, almost 1C higher than the 1991-2020 average – a level that would have been ‘impossible without human induced climate change,’” the Met Office said. In August, during this year’s record-breaking hot spell – which became known as the ‘Lucifer’ heatwave – a new European temperature record of 48.8C was set in Syracuse, Sicily. This beat the previous European high of 48C recorded in Athens in 1977, and would be expected to happen only once in 10,000 years in the absence of climate change, the Met Office said. (Carbon Brief)
Missing the point – Three US GOP senators on Wednesday set out a climate plan that aims to cut energy-related global emissions up to 40% from today’s levels by 2050. The plan calls for familiar ideas favoured by Republicans, such as developing and deploying low-carbon technologies, including CCS, advanced nuclear reactors, and battery storage, and exporting those innovations abroad. It also aims to “revitalise” manufacturing of renewable energy technologies in the US, such as solar panels and wind turbines, to lessen dependence on China — a goal shared by Democrats. However, Republican senators diverge from Democrats most glaringly in promoting an expansion of natural gas production at home, while exporting more LNG abroad, which they say would displace dirtier coal in developing countries with growing energy demand. The Republicans don’t acknowledge any need to reduce fossil fuel use or development, and they make clear they continue to oppose “mandates, regulations, and taxes,” which would seem to include regulation of methane emissions. It also does not go nearly as far as countries’ current pledges to reach net zero emissions, including the strategy set out this week by President Joe Biden. (Washington Examiner)
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