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COP26
Talks enter final phase as campaigners raise concerns about voluntary offsetting
UN negotiations over the shape of international emissions trade were set to go into an extra day amid accusations on Friday that the current text could result in a net increase in global emissions by allowing some carbon offsets to be traded without being accounted for under NDCs.
REDD+ moving ahead of Article 6, but questions remain on approach, integrity
REDD+ outcomes approved and tracked by the UN are moving ahead of Article 6 negotiations under the Paris Agreement, although others are pursuing alternative approaches or calling for restrictions to ensure the environmental integrity of global carbon trading.
Sectoral commitments slightly narrow 2030 emissions gap, report finds
Key sectoral pledges regarding methane, coal, forestry, and transport, will close the emissions gap between a 1.5C pathway and stated 2030 climate targets by around 9%, or 2.2 billion tonnes of CO2e, an update on global emissions trajectories from Climate Action Tracker (CAT) said.
ASIA PACIFIC
SK Market: KAUs climb to 18-mth high, with auction results reflecting bullish sentiment
Spot allowances in South Korea’s emissions trading market on Friday rose to their highest level since the pandemic hit carbon last June, with this week’s monthly CO2 auction also reflecting the upwards trend.
CN Markets: CEAs stable with little sign of pre-compliance volatility
Prices and volumes in China’s national carbon market remained relatively stable again over the past week, with little indication of impending pre-compliance volatility.
Japan’s Idemitsu eyes carbon market, announces first offset-backed voyage
Japanese oil company Idemitsu is considering opportunities in the voluntary carbon market with generation of credits based on its technologies, and on Friday announced its first offset-backed crude oil transport.
Australian project developers team up to take advantage of new offset method
Two of Australia’s major carbon offset developers on Friday announced a partnership that will allow them to take advantage of a project method expected next year that will allow several crediting activities take place on the same land.
Australia Market Roundup: Pastoral companies earn major ACCU batches, as govt releases net zero modelling
Two pastoral companies received the biggest amount of new carbon credits in the Clean Energy Regulator’s latest issuance round, while the government on Friday released the modelling behind its net zero target, revealing offset price estimates well below current market prices.
AMERICAS
Canada narrows CCS crediting scope as it delays final Clean Fuel Standard regulations
The Canadian environment ministry this week pushed the back the release of final regulations for the federal Clean Fuel Standard (CFS), while noting it will refine the quantification methodologies for carbon capture and sequestration (CCS) methodologies that can generate credits under the programme.
LCFS Market: California prices fall into $140 range as offers abound
California Low Carbon Fuel Standard (LCFS) credit values dug even deeper multi-year lows on Friday as traders said several kinds of market participants were seen unloading credits.
EMEA
Euro Markets: EUAs score 6.5% weekly gain despite late retreat from 5-wk high on profit-taking
Carbon retreated from a new five-week high on Friday in another low-volume session, as profit-taking, technicals, and options-related positioning were said to be the day’s main drivers.
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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
Hydrogen pledge – Twenty-eight companies – including oil giants BP, Shell, Equinor, and TotalEnergies – have launched a new global initiative at COP26 to accelerate the replacement of highly polluting grey hydrogen with lower-carbon hydrogen, Upstream reports. About 70 Mt of grey hydrogen produced from unabated natural gas or coal is used every year, mainly for ammonia fertiliser and chemicals production and oil refining, resulting in about 900 Mt CO2 — the equivalent to all GHGs released by the UK and Indonesia put together. Pledges made under the H2Zero initiative — which is spearheaded by non-profit organisations the World Business Council for Sustainable Development and the Sustainable Markets Initiative — will increase demand for “lower-carbon intensity hydrogen” by 1.6 Mt per year per annum, and its supply by more than 18 Mt per year. Of the 28 companies to sign up to the H2Zero initiative, 21 pledged to accelerate the demand and/or supply of low-carbon hydrogen, while seven made “support pledges.”
Not a good look – COP26 is projected to have a carbon footprint that roughly doubles that of the last global summit in 2019, according to a report by Arup, a London-based professional services firm. The two-week summit, which is running into Saturday, will emit about 102,500 tonnes of CO2e – equivalent to the total annual emissions for more than 8,000 UK residents. About 60% of the summit emissions are estimated to come from international flights, while other large contributors include accommodations for delegates and participants, policing and security for the event, transportation to and from venues, and local energy, water, and waste management. The event is set be the most carbon-intensive COP yet. The 2019 COP25 in Madrid, by comparison, emitted an estimated 51,101 tonnes and the 2015 COP21 in Paris an estimated 43,000 tonnes. It’s thought that much of this year’s emissions will be offset using VERs or CERs. (CNBC)
Tip of the cap – Almost two-thirds of Canadians support immediately capping GHG emissions from the oil sands – even if it puts jobs at risk, according to a new poll. 63% of respondents to a Nanos Research poll said they agree or somewhat agree that Canada should immediately limit emissions from the oil and gas sector and curtail them over time, while 34% said they either disagree or somewhat disagree, and 3% said they are unsure. In the Prairies provinces, 57% of respondents said they disagree or somewhat disagree with limiting emissions, whereas Quebec had the lowest level of dissent, with just 16% not in favour. During the recent election campaign, the Liberals pledged to put a cap on the sector’s emissions, with the ceiling shrinking over time. Canadian PM Justin Trudeau’s government has said it will set five-year targets, starting in 2025. (Globe and Mail)
Reforestation renaissance – British Columbia’s NDP government announced a reforestation milestone this week, with 1 bln new trees planted since taking power in 2018. At the same time, the province wants to widen the scope of its BC Forest Carbon Offset Protocol (FCOP) to expand access to its offset market so that more Indigenous communities and forest companies can turn reforestation and better forest-management activities into marketable carbon credits. The province is in consultations with Indigenous communities about its recent proposal to suspend logging in one-third of the province’s rare, old-growth forests, which are considered at a very high risk of irreversible biodiversity loss. BC environment minister George Heyman said if those deferrals are approved, and those areas eventually turned into permanently protected lands, then those lands could be added to the carbon offset programme. (Globe and Mail)
Grand Bargain hunter – An unusual public records request from the office of Washington Gov. Jay Inslee may be related to the state’s Supreme Court ruling this week that partial vetoes Inslee made in the 2019 transportation budget were unconstitutional. The public records request targeted four Democratic state senators – Reuven Carlyle, Steve Hobbs, Mark Mullet, and Kevin Van De Wege – as well as Hannah McCarty and Gary Wilburn, both senior policy counsel for Senate Democrats. The requests were for emails and other internal communications related to portions of climate legislation connected to the passage of a transportation package dubbed the “Grand Bargain.” Inslee issued partial vetoes to subsections of a WCI-modelled cap-and-trade bill and a low-carbon fuel standard bill – both of which were passed by the legislature during the 2021 session – thereby undoing the so-called “Grand Bargain” deal linking the two pieces of climate legislation to a transportation funding package, without which the bills would not have been able to take effect. According to the bargain that the legislature struck up, and that Inslee scuttled with his veto, all three of those bills needed to pass, or else risk transportation package that passed earlier, potentially kicking the can down the road on the climate bills again. (The Center Square)
EMEA
You take the ‘hy’ road – The devolved Scottish government has unveiled a £115 mln+ draft action plan to reach its ambitions of building 5 GW of green and blue hydrogen capacity by 2030 and 25 GW by 2045, and producing and exporting the lowest-cost clean H2 in Europe, Recharge reports. The 50-page plan sets out 37 “key actions” that Holyrood will implement over the next five years, with the most significant being £100 mln of funding from the government’s Emerging Energy Technologies Fund to support “hydrogen pathfinder projects”. While it does not clearly define what such “pathfinder projects” might be, it states that the funding programme will focus on regional renewable hydrogen hubs, green H2 production, and innovation. “We wish to see renewable hydrogen projects coming forward for potential support from the £100 mln hydrogen funding programme,” the document states. The action plan also declares that Scotland will “support the establishment of low-carbon [blue] hydrogen production at scale in the 2020s, linked to carbon capture and storage” — but only for projects with carbon capture rates of 90-95%.
ASIA PACIFIC
Big green spender – Indian billionaire Gautam Adani said his logistics-to-energy conglomerate, Adani, will invest $70 bln over the next decade to become the world’s largest renewable energy company and produce the cheapest hydrogen on the earth, Livemint reports. Adani Green Energy, the world’s largest solar power developer, is targeting 45 GW of renewable energy capacity by 2030 and will invest $20 bln to develop a 2 GW per year solar manufacturing capacity by 2022-23. Adani Transmission, India’s largest private sector power transmission and retail distribution company, is looking to increase the share of renewable power procurement from the current 3% to 30% cent by India’s FY 2023 and to 70% by India’s FY 2030. Speaking at the Bloomberg India Economic Forum, Adani Group’s founder-chairman said the group is working to make renewables a viable, affordable alternative to fossil fuels.
VOLUNTARY
Taste and Ci-vitas – Civitas Resources, a Colorado shale driller created via a series of mergers earlier this year, said it has accumulated enough carbon offsets to cover its 1 Mt of annual CO2 emissions from the company’s oilfield activities. The credits cover Scope 1-2 emissions, though the company declined to comment via a representative on how much it paid for its portfolio of offsets or which projects they originated from, beyond saying that some of the projects are based in Colorado. (Bloomberg Quint)
AND FINALLY…
But does it also slap? – Pulp frontman Jarvis Cocker has teamed up with the electronic DJ Riton to release what he calls “the world’s first sustainable banger” to encourage action to address the climate crisis. Let’s Stick Around, released on Thursday to coincide with COP26, brings together one of the figureheads of Britpop with a powerhouse of electronic dance music. “Anybody with any sense is passionate about the climate emergency, it’s moving more into the centre of everybody’s consciousness,” he said. Cocker has long been an advocate for climate action, and his concerts have featured stalls for Extinction Rebellion, some of whose members joined him on the Q awards red carpet in 2019. (Guardian)
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