CP Daily: Thursday November 4, 2021

Published 01:46 on November 5, 2021  /  Last updated at 01:52 on November 5, 2021  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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COP26

Paris target within reach as Glasgow pledges chart path to 1.8C of warming -IEA

The world is on track to limit warming to 1.8C this century as updated national pledges and joint commitments to slash methane emissions ratchet down GHG projections, the IEA said on Thursday, the first time the Paris Agreement goal has come within reach.

Steel decarbonisation rises on int’l agenda as border measures eyed

High-level initiatives promoting ‘near-zero steel’ at COP26 talks this week have helped shift discussions away from technology-agnostic emissions targets, with a growing club of supportive nations showing signs of a parallel push to impose border measures on dirtier producers.

Article 6 emissions trade awaits breakthroughs as new text ordered

UN negotiations to finalise a Paris Agreement Article 6 rulebook on international emissions trade ploughed on through Wednesday, with officials ordering a second text to be crafted overnight.

Poland keeps 2049 coal exit date despite pledge, market projections

Poland’s climate minister Anna Moskwa on Thursday confirmed that her country has no intention to bring forward its 2049 coal exit date despite signing on to a global pledge to consign the fuel to history.

Papua New Guinea joins Australia’s IPCOS offset scheme

Papua New Guinea on Thursday became the second nation to join Australia’s Indo-Pacific Carbon Offset Scheme (IPCOS), which will primarily deliver credits to private-sector voluntary buyers.

COP26 Roundup: Day 4 – Nov. 4

Day 4 of COP26 in Glasgow is Energy Day, while delegates continue technical negotiations on all issues in closed sessions.

AMERICAS

California cap-and-trade emissions crash 10% in pandemic-afflicted 2020

GHG output under California’s WCI-linked carbon market plunged 10% in 2020 as impacts of the COVID-19 pandemic weighed across multiple economic sectors, according to data posted by state regulator ARB on Thursday.

NA Markets: CCA bull run halts near $32, RGGI allowances fluctuate after Virginia election

California Carbon Allowances (CCAs) ripped to a new all-time high this week as options activity heated up close to the 2021 WCI auction reserve price, while RGGI Allowance (RGA) values experienced a volatile stretch as Virginia voters elected a Republican governor and House of Delegates.

EMEA

Irish government unveils “transformational” strategy to help it catch up with climate goals

The Irish government has unveiled a new climate change strategy that it said will help it halve the country’s GHG emissions by 2030 and to achieve net zero by mid-century.

Euro Markets: EUAs fail to hold above technical resistance after hitting 3-week high

EUAs broke above persistent resistance to reach a three-week high near €61.50, but selling once again emerged to push prices back to the €59-60 range they have occupied for much of the past few weeks.

CORRECTION – First exchange-traded carbon allowances launch in London

The first ever exchange-traded commodity offering investors exposure to physical carbon allowances only will launch on the London Stock Exchange (LSE) on Thursday.

ASIA PACIFIC

China orders efficiency improvements for coal-fired power plants

China’s National Development and Reform Commission (NDRC) has ordered most coal-fired power plants to improve their coal-burning efficiency, a move that could further increase the oversupply of allowances in the ETS unless the environment ministry adopts similar adjustments to the CO2 allocation benchmark.

VOLUNTARY

Offset developer ClimeCo acquires women-owned ESG consultancy

US-based carbon offset developer ClimeCo has acquired a women-owned ESG consultancy, it announced Thursday.

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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

EMEA

Ouch – The trading arm of Norway’s Statkraft posted an operating loss of NOK 4 bln (€405 mln) in the third quarter, down from a profit of NOK 110 m a year earlier, while group earnings soared on high power prices. The company attributed the loss in its market segment to “record high prices for power and other power-related commodities and high volatility in the forward markets,” which led to losses in its trading and dynamic asset management portfolios.However, the Norwegian utility posted operating profit of NOK 4.6 bln for Q3, up sharply from NOK 1.1 bln in the same period last year as average Nordic power prices jumped from €9/MWh in July-September last year to €68.50 this year. The company did not disclose hedging positions. (Montel)

Fortescue deal with Jordan – The green energy arm of iron ore miner Fortescue Metals, Fortescue Future Industries (FFI), will partner with the Jordan to conduct studies to develop green hydrogen production through potential large-scale wind and solar energy production facilities, Mining Weekly reports. The partnership between Jordan and FFI is the first step in establishing the country’s first ever production of green hydrogen and green ammonia and will position Jordan to become a future leader in renewable energy production.

14 years – Germany’s leading business executives are taking climate and environmental protection increasingly serious, according to a survey presented at COP26. The poll was carried out by the FUTURIST Institute for Sustainable Transformation, the Potsdam Institute for Climate Impact Research and management consultancy Bain & Company, and is based on more than 20 conversations with executives from leading German companies, among them energy group RWE, carmaker Daimler, chemical giant BASF, steel producer ThyssenKrupp, and railway operator Deutsche Bahn. Accordingly, sustainability has now caught up with or even replaced digitalisation as the top issue at the vast majority of companies surveyed, Frankfurter Allgemeine Zeitung reports. More and more companies are setting fixed net zero carbon emission targets. There is still a long way to go, however, as the participating corporations said they still need another 14 years on average to achieve their targets. A major problem executives face is in the implementation of sustainability policies in their companies: Almost two-thirds of respondents said sustainability and profitability remained diametrically opposed in their reality. (Clean Energy Wire)

Dirty old buildings – Three quarters of German buildings are still heated with fossil fuels despite the share of alternative heating systems growing, according to a report on the building sector’s climate footprint by the German Energy Agency (dena). Sales of heat pumps increased by 40% and sales of biomass systems by 140% in 2020 compared to the previous year, and the sale of oil and gas boilers fell below 80% for the first time. The use of subsidy programmes for climate-friendly construction and renovation has also grown since 2019, the report shows. Energy consumption in buildings has remained constant for the last five years, while heat consumption and energy consumption for air-conditioning has recently risen, dena found. Around 40 percent of heating systems are over 20 years old and need to be replaced in the coming years, presenting an opportunity for installing sustainable alternatives, dena said. The building sector has exceeded its 2020 Climate Action Law budget of 118 MtCO2e by 2 Mt. Earlier this year, German ministers agreed to spend a total of €11.5 bln on measures for lowering emissions in the sector. The government aims to have a ‘nearly’ climate-neutral building stock by 2050 after emissions in the sector stagnated for nearly a decade. (Clean Energy Wire)

ASIA PACIFIC

Fossil fuel pushers – Over the past decade, public financial institutions outside Australia have pumped A$36.7 bln ($27.2 bln) into Australian fossil fuel projects, mainly oil and gas, according to a paper published by a group of Australian, South Korean, and Japanese climate and environment organisations. This amount is over ten times more than the A$3.3 bln given to renewable projects in Australia over the same period. The report also shows the Australian government has blocked international efforts to limit fossil fuel financing while it has facilitated foreign bankrolling of the Australian fossil fuel industry.

CCS consortium – Woodside, BP, and Japan Australia LNG (owned equally by Mitsubishi Corp. and Mitsui) have agreed to form a consortium to progress feasibility studies for a large-scale, multi-user CCS project near Karratha in Western Australia, Marketscreener reports. The consortium brings together the diverse capabilities of three industry leaders to assess the technical, regulatory, and commercial feasibility of capturing carbon emitted by multiple industries located near Karratha on the Burrup Peninsula, and storing it in offshore reservoirs in the Northern Carnarvon Basin.

AMERICAS

Open a vent – The Alberta government on Wednesday approved a Quantification Protocol for Vent Gas Reduction under the province’s Technology Innovation and Emissions Reduction (TIER) regime. The protocol replaces the flagged Quantification Protocol for Solution Gas Conservation and the flagged Quantification Protocol for Engine Fuel Management and Vent Gas Capture. These protocols were withdrawn as of Nov. 3, which means that no new emission offset projects or aggregated subprojects can be initiated using these protocols. Existing projects on the Alberta Emission Offset Registry that are using the Solution Gas Conservation protocol must update their project plan to use the Vent Gas Reduction protocol effective Nov. 3, 2021.

Advancing to not advance – Pennsylvania House Environmental Resources and Energy Committee Majority Chairman Daryl Metcalfe (R) will convene a voting meeting on Nov. 8 to advance a Senate resolution to disapprove and reject Gov. Tom Wolf’s (D) efforts to join the RGGI power sector cap-and-trade programme. The GOP-controlled Senate passed the bipartisan resolution last week, though it did not attain enough Democratic votes at the time to obtain a two-thirds majority necessary to override a veto from Wolf. However, Metcalfe called on Attorney General Josh Shapiro (D) to use his powers to reject the state’s RGGI-aligned cap-and-trade regulation, with Shapiro having signalled potential opposition to the programme in his bid for the governor’s office next year.

Don’t worry – Ethanol and biodiesel producers can count on forthcoming Renewable Fuel Standard (RFS) quotas that will be set by US President Joe Biden’s administration – without having to worry that small refinery exemptions (SREs) will undercut the annual targets – Agriculture Secretary Tom Vilsack said on the sidelines of COP26 on Thursday. Vilsack’s statement draws a contrast to actions taken by former President Donald Trump’s EPA, which ramped up the use of the RFS SRE programme, absolving numerous obligated parties of their requirements to blend biofuels or purchase credits under the federal policy. (Bloomberg Government)

VOLUNTARY

Forest funding – CDC Group, the UK’s development finance institution, Finnfund, the Finnish Fund for Industrial Cooperation, Norfund, the Norwegian Government’s investment fund for developing countries, and New Forests, a global investment manager focusing on sustainable landscapes, are partnering to develop investment strategies designed to scale and transform the sustainable forestry sector in sub-Saharan Africa. This new partnership will aim to raise up to $500 mln over the next three to five years in the fight against climate change, according to Property Funds World.

SCIENCE & TECH

Greening steel – A study from the German Agora Energiewende climate think-tank shows that more than 70% of existing coal-based blast furnaces worldwide – amounting to 1,090 Mt – will reach the end of their technical lifetime by 2030 and will thus require reinvestment. This creates a major opportunity for the sector to save emissions by moving from coal-fired blast furnaces to carbon-neutral technologies and to transform and protect jobs, Agora states.

Thin thinking – Osmoses, a Massachusetts Institute of Technology spinoff, has created a membrane material thinner than human hair to reduce CO2 emissions from industrial processes such as natural gas production. Today, businesses use an energy-intensive technique called separation to filter out the valuable methane from other gases. That often requires using fossil fuels to boil off the unwanted chemicals – a process that can account for as much as 15% of world energy demand, according to a 2016 study. Instead, Osmoses uses membranes thinner than 1 millionth-of-a-meter – made from carbon and hydrogen – that can remove the unwanted molecules using as much as 60% less energy than a conventional process, the startup’s CEO Francesco Maria Benedetti told Bloomberg.

Ballooning ambition – An Israeli startup hopes to send fleets of balloons into the upper atmosphere that will trap CO2 for recycling. High Hopes Labs developed a system that captures the carbon where it has almost solidified due to cold temperatures, far above the Earth. Having done pilot testing, the company aims to build larger balloons within two years that could each be deployed to remove a tonne of CO2 a day at a cost below $100, much less than comparable on-ground facilities currently in use. (Reuters)

AND FINALLY…

It was only a matter of time… – … that the so-called “crime of the century” would go primetime. Lords of Scam is a new French documentary on Netflix that chronicles the massive tax fraud scandal that rocked the EU carbon market over 10 years ago. Beginning in 2008, a group of French hustlers, business owners, and big money financiers embarked on a scheme to fleece the hundreds of millions of euros via VAT applied on trades in the EU ETS, and the money got so good that they became fabulously, stupidly wealthy overnight. Asked about his role in the scam now, a few years into his eight-year prison term, Mardouche “Marco” Mouly will laugh, gesticulate wildly, and simply say he was a fifth wheel, by no means a mastermind. According to Decider, Lords of Scam interviews Marco extensively as he races sports cars and holds court about town, all under the conditions of his work-release programme. We also meet friends and co-conspirators – people who’ll call Marco their BFF as quickly as they deride him. The activities of another accomplice, wealthy playboy and professional poker player Arnaud Mimran, are described from a distance, since he’s also currently doing time for the heist as well as for kidnapping a Swiss financier. The mechanics of the group’s scheme are detailed, as is the timeline of their rise to riches followed by their downfall, jealous clashes, police investigations, and the unsolved murders of two of their own. Years later, there’s still a lot of finger-pointing and role-diminishing, with the general feeling that the system allowed their grift and they paid a stiff price for it.  Carbon Pulse subscribers can read our 2016 feature The case of the skull ring: Poker pro, Polish broker on trial for French carbon “crime of the century”.

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