CP Daily: Monday November 8, 2021

Published 01:31 on November 9, 2021  /  Last updated at 01:01 on November 10, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Experts wary of US climate policy pathway, despite senator’s carbon pricing optimism

Experts were downbeat on the statement made by Senator Sheldon Whitehouse (D) over the weekend that Congress is one vote away from a federal carbon price in the reconciliation bill, noting the significant roadblocks that remain for US climate policy.

COP26

Ministers face uphill task as officials fail to advance Article 6 talks

The first week of negotiations over Article 6 rules to govern international emissions trade under the Paris Agreement ended on Saturday without agreement, leaving ministers with unwieldy documents to work on when they convene at COP26 in Glasgow on Monday.

New ADB carbon fund to source Article 6 credits for financiers

The Asian Development Bank on Monday launched a new fund that will seek to drive climate action in the Asia-Pacific by sourcing carbon credits eligible under the Paris Agreement for investors.

North, Latin American governments reboot alliance to forge closer ties on carbon pricing

Twelve North and Latin American national and sub-national governments on Monday signed a new declaration promising to boost their carbon pricing integration, rebooting an existing framework with smaller jurisdictions keen to learn more.

New VCM governance body open to working with compliance markets

The new Integrity Council for the Voluntary Carbon Markets (IC-VCM) is focused on advancing its role as a governing body for the entire voluntary marketplace, but is also open to working with jurisdictions and organisations that operate compliance markets, senior IC-VCM officials said in Glasgow in Friday.

COP26 Roundup: Day 7 – Nov. 8

Negotiators at COP26 in Glasgow enter the second week of the talks, with hopes of further progress as ministers get involved. We are tracking developments here.

ASIA PACIFIC

China carbon futures trading likely to go ahead after government nod

Carbon trading at the newly established Guangzhou Futures Exchange looks likely to move forward after being endorsed by a group of major government agencies, though it remains unclear which units will be on offer.

EMEA

UK considering carbon border adjustment mechanism to shield against leakage -env. sec.

The UK is following the EU’s lead and is considering a carbon border adjustment mechanism to protect industry from carbon leakage, the country’s environment secretary said Sunday.

Euro Markets: EUAs, energy gains on Russian gas no-show

EU carbon prices edged higher on Monday as the wider energy complex rose amid a lack of anticipated additional supply from Russia.

VOLUNTARY

VCM Report: CORSIA-grade VERs eye $9, nature-based units flirt with $13

Standardised, exchange-traded voluntary emissions reductions (VERs) hurdled to fresh record highs once again this week, with evolving interest from speculators, crypto initiatives, and the ongoing COP26 UN climate talks seen as major drivers in the voluntary carbon market (VCM).

IncubEx, Trayport plan latest VER trading marketplace

Environmental products development firm IncubEx and energy trading platform Trayport on Monday announced the forthcoming launch of a new voluntary emissions reduction (VER) marketplace, adding to the growing spate of initiatives aiming to facilitate voluntary carbon offset trade.

Ex-banker’s London offset project development and advisory firm supported in $40 mln capital raise

A former JP Morgan director’s London-based offset project developer and carbon advisory firm is being supported by a C$50 million capital raise.

AMERICAS

Feedstock competition could push California LCFS values towards price cap -analysts

California Low Carbon Fuel Standard (LCFS) credit prices could move towards the programme’s price cap in the coming years as greater competition for biofuel feedstocks exerts bullish pressure, analysts at a major investment bank said Friday.

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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

Nice for some – The world’s richest 1% are set to emit 30 times more carbon emissions than the entire global per-capita level by 2030, potentially thwarting global efforts to keep the Earth’s temperature from rising more than 1.5C, according to a new report by Oxfam Policy & Practice. The world’s most affluent, which in the US includes Jeff Bezos, Elon Musk, and Mark Zuckerberg, to name a few, have a track record of emitting a disproportionate amount of carbon compared to the rest of society. In 1990, the share of global emissions associated with the consumption of the richest 1% was 13%.  That grew to 15% in 2015 and is projected to edge up to 16% in 2030. On the opposite end, the Oxfam report also found that the global middle classes are on course to cut per-capita emissions closest to the global goal of limiting Earth’s temperature rise to 1.5C. Researchers attributed this to the “Paris-effect” in changing behaviour due to global red flags being waved to address climate change. (The Hill)

Aligned and fine – Exchange operator Intercontinental Exchange (ICE) today announced the planned launch of four new index futures contracts based on the MSCI Climate Paris-Aligned Indices. Subject to regulatory approval, the contracts are expected to launch in Jan. 2022 on ICE Futures US. The new USD-denominated futures contracts are designed to help investors align with a net zero world by using a variety of proprietary, key climate metrics and models, including climate value-at-risk, low carbon transition score, and companies’ carbon emission reduction targets. The indices covered will be the MSCI World Climate Paris Aligned Index, MSCI USA Climate Paris Aligned Index, MSCI Europe Climate Paris Aligned Index, and MSCI Emerging Market Climate Paris Aligned Index.

EMEA

On the up – The demand for electricity and natural gas in Germany is expected to rise by 3% this year, according to a report by the German Association of Energy and Water Industries (BDEW) set to be published this week. The total annual consumption is likely to reach 561 bln KWh this year up from 544 bln in 2020, when energy consumption fell significantly because of the pandemic. The expected consumption will still be below the pre-pandemic level of 568 bln KWh consumed in 2019. According to the BDEW, natural gas consumption is on the rise in Germany. The total annual gas consumption is expected to reach 1,013 bln KWh this year, 5% more than in 2020 and 2% more than in 2019. (Frankfurter Allgemeine Zeitung, Clean Energy Wire)

Viva la veto – German Green party leader Annalena Baerbock has said that a veto option must be created in government for laws that are in conflict with the goal of limiting global warming to 1.5C. “Just as we check whether projects can be financed, we also need a binding climate check,” Baerbock said in an interview with news agency RND. Meeting the goal of the Paris Agreement is a responsibility of all three parties currently in talks to form a new government – the Social Democrats (SPD), the Green Party, and the Free Democrats (FDP) – and a task that “cuts across all ministries”, she said. “It is not acceptable to close one’s eyes when a ministry submits laws that deviate significantly from this.” During the election campaign, the Green Party already proposed the establishment of a climate ministry with veto powers. (Clean Energy Wire)

ASIA PACIFIC

From black to green – The traditional coal hub of Newcastle in the Australian state of New South Wales may become home to a 40 MW green hydrogen electrolyser, after Australia’s federal government backed a consortium to conduct a feasibility study into the project, Renew Economy reports. The Morrison government has committed A$1.5 mln in funding to support a feasibility study into the viability of a hydrogen hub, but the Beyond Zero Emissions think-tank believes more needs to be done to cash in on a potential A$11 bln “export industry bonanza.” The Australian Renewable Energy Agency is providing A$1.5 mln to support a A$3 mln feasibility study into the development of the 40 MW green hydrogen hub proposed by Macquarie’s Green Investment Group, the Port of Newcastle, and other project partners.

Net zero club – Three Australian state and territory governments have reached a self-described “historic” cross-party agreement to help each other work towards reaching net zero greenhouse gas emissions, the Guardian reports. The Coalition and Liberal Party governments in New South Wales and South Australia, and the Australian Capital Territory’s Labor-Greens administration, said the collaboration – known as the net zero emissions policy forum – would help sub-national jurisdictions address the practical challenges of achieving net zero. The step is the latest taken by lower levels of government in Australia, in the absence of stronger action by the Coalition Liberal-National federal government, and comes ahead of a cities and regions day at the Cop26 climate conference in Glasgow.

More hydrogen – Keppel Infrastructure, Incitec Pivot and Temasek have signed a memorandum of understanding to investigate the feasibility of producing green ammonia in the Australian states of Queensland and New South Wales for export, Hellenic Shipping News reports, to meet the rapidly growing market demand for carbon-free energy globally, including Singapore. The green ammonia may be used as a direct feedstock in green energy generation, or as a hydrogen carrier to provide green hydrogen solutions.

Coal king goes (half) green – Indonesian coal mining giant Adaro Energy could generate half its revenue from renewable power as soon as a decade from now as it diversifies away from fossil fuels, its top executive, Garibaldi Thohir, told Nikkei Asia. Currently, over 90% of Adaro’s revenues come from coal-related operations. That could drop to 50% in 10 to 15 years as the company ramps up its renewable energy businesses. Thohir said Adaro is looking at solar, hydro and hydrogen projects, with details to be laid out later this year. He also expressed an interest in using the Asian Development Bank’s newly-announced energy transition mechanism, which seeks to retire coal-fired power plants on an accelerated schedule.

Strange bedfellows – Australia will hold an election within the next half year or so. The opposition Labor party has yet to release specifics about the climate policy it will take to the polls, but climate change spokesperson Chris Bowen on Sunday told ABC News it was out of the question to reintroduce a carbon tax or an ETS. However, he was open to expanding the Safeguard Mechanism, which caps emissions from major sources outside electricity generation and forces them to purchase offsets if they fail to meet their target. Bowen referred to how Australia’s main business group recently backed such an expansion, though such a move has been rejected by the incumbent Coalition government. (NCA NewsWire)

AND FINALLY…

I’m alright jack – Citizens are alarmed by the climate crisis, but most believe they are already doing more to preserve the planet than anyone else, including their government, and few are willing to make significant lifestyle changes, a Kantar Public survey of 10 countries including the US, UK, France, and Germany, observed. The survey found that 62% of people surveyed saw the climate crisis as the main environmental challenge the world was now facing, ahead of air pollution (39%), the impact of waste (38%) and new diseases (36%). But when asked to rate their individual action against others’ such as governments, business and the media, people generally saw themselves as much more committed to the environment than others in their local community, or any institution. (Guardian)

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