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ANALYSIS: South Korea faces offset issuance gap after Glasgow, while Japan gets clarity on market plans
South Korea’s carbon market will go several years minimal access to foreign offsets while some projects risk financial ruin after this weekend’s UN climate deal, which provided Japan with certainty should it decide to tap into the voluntary carbon market.
A group of nations has vowed to take a stronger line on carbon credits than those agreed at the Glasgow COP26 UN climate talks, pledging not to use pre-2020 CDM credits and to apply corresponding adjustments to voluntary market units.
EUAs hit a new all-time high on Monday as bullish energy news and optimism following UN climate talks combined with options-related positioning.
The North American Leaders’ Summit (NALS) this week is set to feature several climate-related discussions, with US President Joe Biden’s administration clinging to the last remaining green provisions of the federal reconciliation bill and Canada arguing a proposed tax credit for American-made electric vehicles (EVs) will harm the country’s auto manufacturing industry.
Saskatchewan’s Ministry of the Environment released two draft carbon credit protocols Monday, moving the province’s delayed offset programme for its large emitter system closer to fruition.
Financial players saw their net length in California Carbon Allowances (CCAs) fall to a 4.5-month low last week before prices attained a new record high above $35, while compliance entities reduced their net short position to a 5-month low, according to US Commodity Futures Trading Commission (CFTC) data published Monday.
China’s thermal power growth slowed in October, official data showed Monday, as the energy consumption curb put in place to ease coal shortage continued, though analysts don’t expect big power surge after the curb ends.
New Zealand can reach 100% renewable-powered electricity by 2030 in the most cost-effective and market friendly way if it establishes a special entity to facilitate the retirement of the country’s thermal generation assets, a report released on Monday by a New Zealand power provider claimed.
Standardised, exchange-traded voluntary emissions reductions (VERs) continued to gap to new all-time highs this week though participants said the over-the-counter voluntary carbon market (VCM) was steady on Monday after nations agreed the Paris Agreement carbon credit rulebook this weekend.
Below is a summary of Carbon Pulse’s coverage of COP26, including the daily roundups of various announcements and developments during the two-week summit.
Job listings this week
- *Program Manager, Regional Greenhouse Gas Initiative, Inc. – New York City
- *Forest Carbon Analyst, Finite Carbon – Flexible Location
- *Head of Compliance Sales, South Pole – Amsterdam/Berlin/Paris/London
- *Carbon Project Developer, ClimatePartner – Munich
- *Carbon Project Developer, Nature-Based Solutions, ClimatePartner – Munich
- *Senior Development Officer, Government and Multilateral Agencies, Gold Standard – Geneva/Remote
- *Senior Development Officer, Foundations and Corporations, Gold Standard – Geneva/Remote
- *Carbon Finance Deal Structurer, Conservation International – Arlington/Seattle/Remote (US/Worldwide)
- *Monitoring & Evaluation (M&E) Senior Manager, Conservation International – Arlington/Seattle/Remote (US/Worldwide)
- *Manager, Asia-Pacific, Verra – Remote from Asia-Pacific
- *Director, Financial Innovations, Verra – Washington DC/Remote
- *Senior Director/Director of Communications and Marketing, Verra – Washington DC/Remote
- *Senior Technical Advisor or Manager, Supply Chain Innovations, Verra – Remote
- Senior/Carbon Trader, RGE – Singapore
- Carbon Farming Project Manager, Climate Friendly – Western QLD, Australia
- Carbon Originator North America, Louis Dreyfus Company – Wilton, Connecticut
- Carbon Originator Latin America, Louis Dreyfus Company – Sao Paulo
Or click here to see all our listings
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
Saving mavens – Energy storage installations around the world will reach a cumulative 358 GW by the end of 2030, more than twenty times larger than the 17 GW online at the end of 2020, according to the latest forecast from research company BloombergNEF, which estimated that this will require more than $262 billion of investment. BloombergNEF’s report estimates that 345 GW of new energy storage capacity will be added globally between 2021 and 2030, which is more than Japan’s entire power generation capacity in 2020.
Let’s move – Royal Dutch Shell has announced a plan to move its headquarters to the UK as part of proposals to simplify the company’s structure. The oil giant will ask shareholders to vote on shifting its tax residence from the Netherlands. It also wants to do away with its dual share structure in favour of just one class of shares to boost “the speed and flexibility” of shareholder payouts.The Dutch government said it was “unpleasantly surprised” by Shell’s proposal and according to the FT is scrambling to find a parliamentary majority to scrap a 15% withholding tax charged on dividends, which Shell has previously described as a problem. Earlier this year, a court in the Netherlands ruled that by 2030 Shell must cut its CO2 emissions by 45% compared to 2019 levels. The decision only applies in the Netherlands and Shell said it would appeal against the ruling. The environmental group that won the suit against said the company’s plans to move its headquarters to London will not impact the case. “This news has no negative consequences for Milieudefensie’s climate case against Shell,” the group, known internationally as Friends of the Earth, said in a statement. “Rather, moving to the United Kingdom opens up a new front, including for future cases.” (BBC, Reuters)
Price fix – Exchange EEX will host three additional fixed-prices €25/t auctions under Germany’s nEHS carbon pricing system for transport and buildings, the bourse has said, adding dates of Dec. 9, 14, and 16. It also published the calendar for the twice-weekly sell-off dates in 2022, when the price will rise to €30/t.
EV short-circuit – Europe’s electric car boom is at risk of stalling, jeopardising the sales of 18 mln battery EVs, according to data from green group T&E. EU clean car rules have driven plug-in vehicle sales to almost one-fifth of the market. But weak targets between 2022 and 2030 will not require carmakers to deliver on their EV production plans and could result in 55 mln extra tonnes of CO2 pollution – more than the annual emissions of all the cars in Spain.
Back to the drawing board – Singapore review its NDC after top level talks concluded late on Saturday at COP26, Channel News Asia reports. While acknowledging that she had been questioned by activists, NGOs and some ministers about Singapore’s overall climate goals, Environment Minister Grace Fu, said Singapore would now review its targets. In its latest NDC, released in 2020, Singapore stated an aim of “achieving net zero emissions as soon as viable in the second half of the century”. “We will go back and look at what we need to do, look at our responsibilities and review our position. We will review the NDC seriously. This whole package requires us as a party to take them seriously,” she said.
Not in our name – The National Party, the minority party of Australia’s ruling Coalition government, did not sign the final communique of the Glasgow climate summit that commits to doing more to cut medium-term emissions, deputy prime minister Barnaby Joyce has said, adding Australia is “happy with our targets,” the Guardian reports. Joyce said the government had already determined its 2030 emission target, and the Nationals had not agreed to the COP26 pact signed by the Australian government on Sunday. “The Nationals did not sign it. I did not sign it,” Joyce told the ABC. “I am an executive member of this government. We are happy with our targets, with the negotiations the Nationals had with the Liberals (and) we said that we wouldn’t be changing our 2030 targets.” Joyce also targeted the president of Cop26, Alok Sharma, saying he was “cynical” about the suggestion he was emotional about the outcome of the summit. “Give me a break. These people are not worried about the environment, they just want to end up on television,” Joyce said. “He [Sharma] was with his gavel and ‘oh, I’m almost crying, I can’t do this’. He wants to shut down our coal industry but he never talked about shutting down the oil fields in the North Sea.”
Absolutely – Shanghai’s Housing and Urban-Rural Department has set an absolute cap on GHG emissions from the city’s buildings of 45 MtCO2e in 2025, one of the first solid caps on emissions anywhere in China. The move is part of Shanghai’s efforts to control carbon output so as to contribute to China meeting its overall target of peaking GHG emissions by 2030. Most emissions goals on all levels in China are still intensity-based, despite calls from various government think-tanks to shift to solid limits.
A rising Tidewater – Energy company Tidewater Renewables on Monday announced a multi-year agreement with an unnamed, “investment-grade” company to sell British Columbia Low Carbon Fuel Standard (BC LCFS) from the entity’s renewable diesel and renewable hydrogen project in Prince George. As part of the transaction that extends to Jan. 2024, Tidewater Renewables has agreed to sell a total of 125,000 BC LCFS credits at C$425 ($340) per credit, as compared to the previously disclosed budgeted value of C$375 per credit for credits to be received under the Renewable Diesel Project Part 3 Agreement with the British Columbia government. In addition to the 275,750 BC LCFS credits Tidewater Renewables expects to receive for construction and commissioning of the Prince George Complex, the company will also generate credits through the operation of the renewable diesel & renewable hydrogen complex expected to be online in Q1 2023.
The beautiful, climate-neutral game – As national leaders pledged their countries’ adherence to climate targets of varying degrees of stringency at COP26 in Glasgow, the international governing football body FIFA made an ambitious pledge to halve emissions by 2030 and become climate neutral by 2040. The FIFA Climate Strategy can be broken down into four pillars: education, adaptation, reduction, and investing. FIFA plans to educate the global football workforce on climate-related impacts and climate-friendly solutions. Specifically, FIFA wants to develop and implement a climate literacy programme for the 720-strong FIFA workforce. The football association also aims to adapt football regulations and activities to be more resilient to current and anticipated impacts of climate change. In order to adapt, FIFA will develop a reduction plan and define science-based annual targets … for FIFA’s three emission hot spots, namely business travel, logistics, and accommodation. The residual “hard to abate” emissions will be offset with carbon credits. While these measures are expected to drive down internal FIFA emissions, there are doubts whether the accounting goes far enough. As well, critics argue that it is hypocritical of FIFA to announce such ambitious climate targets and at the same time propose to have the World Cup every second year instead of every four. What’s more, FIFA doesn’t seem ready to tackle the main sources of emissions associated with World Cups: air travel. Flights to the 2022 matches in Qatar are estimated to result in 1.8 Mt of CO2e – or half of the event’s total – while permanent venue construction is budgeted at 0.65 Mt. (Euractiv)
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