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TOP STORY
ANALYSIS: Australia’s IPCOS seen starting as a boutique option for voluntary buyers
Australia during the Glasgow COP26 summit launched its Indo-Pacific Carbon Offset Scheme (IPCOS), though analysts expect voluntary buyers will continue to prefer cheap UN-issued credits unless next year’s election brings a new government wanting to incentivise more compliance buying.
AMERICAS
PREVIEW: Uncertainty reigns supreme for Q4 WCI auction with prices at record highs
Traders are largely unsure where the November WCI current vintage auction on Wednesday will settle, with participants pointing to the recent acceleration of a year-long, speculator-led bull run in California Carbon Allowance (CCA) prices as further differentiating the quarterly sale from any other in the past.
Connecticut governor nails coffin shut on TCI carbon market implementation
Connecticut Governor Ned Lamont (D) on Tuesday confirmed that the state is abandoning plans to operationalise the Transportation and Climate Initiative Programme (TCI-P), citing high gasoline prices as obstacles to joining the regional fuel sector cap-and-trade system.
INTERNATIONAL
Countries unlikely to raise GHG pledges next year amid muted pressure -experts
Countries are unlikely to raise the ambition of their Paris Agreement emissions pledges by next year, with richer nations already dismissing the idea and emerging economies not under enough pressure to do more, experts said on Tuesday.
EMEA
Euro Markets: EUAs extend record run above €67 in thin selling amid Nord Stream delays
EUAs leaped to a new record high on Tuesday after Germany said it had suspended certification for the Nord Stream 2 gas pipeline, and carbon traders continued to report strong demand, including from non-compliance players.
Burial at sea: Europe’s industry queues up for North Sea CO2 storage
Europe’s industries are clamouring to use North Sea CO2 storage facilities, with more than half of carbon-cutting projects awarded public funding on Tuesday seeking to bury their emissions there.
ASIA PACIFIC
WWF urges scrutiny over controversial Malaysian forest carbon deal
Green group WWF is urging regulators to scrutinise a massive forest carbon deal that Malaysia’s Sabah state government is negotiating with a Singaporean investor for a project the size of Israel.
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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
In case you weren’t aware – Saudi Arabia helped break the logjam to reach a deal at COP26, the kingdom’s Energy Minister Prince Abdulaziz bin Salman told a conference in Abu Dhabi, Arab News reported. Abdulaziz said that contrary to allegations from environmental groups, a Saudi proposal on wording originally agreed at the Rome G20 conference last month had helped save the day in Glasgow. The final declaration at COP26 saw compromise reached on the key issue of coal usage, with some phrases changed in order to clinch a deal. “That language was introduced by us,” the energy minister said at the ADIPEC 2021 energy forum, indicating that the wording had been used by Saudi negotiators and accepted at the G20 leaders’ summit.
EMEA
The money is (almost) on the table – The EU’s co-legislators have reached an informal political agreement on the bloc’s central budget for next year. Consisting of €169.5 bln in commitments and €170.6 bln of payments, the budget will allocate €1.2 bln to the Just Transition Fund “to make sure the transition to climate neutrality works for all”, along with €755.5 bln for the LIFE R&D programme that is set to support environment- and climate-related activities.
Bio-guidance – The British government on Tuesday published guidance to help operators of stationary installations understand the requirements for monitoring and reporting biomass in the UK ETS. Most of the requirements will be familiar to those operators who participated in the EU ETS, with any changes outlined in the document. Operators using solid or gaseous biomass, or bioliquids for non-energy purposes, can apply an emission factor of zero for the fraction of the fuel or material that is biomass. From Jan. 2021, all operators, including those whose biomass fraction is greater than 97% must report a preliminary emission factor for biomass used, irrespective of whether it is solid, gaseous, or liquid or meets sustainability criteria.
ASIA PACIFIC
Carrying the torch – Some 200,000 CERs from a Chinese wind power project run by the Three Gorges Corporation have been voluntarily cancelled to offset emissions from the 2022 Olympic and Paralympic Winter Games in Beijing, according to UN data. No further details were given. Organisers are targeting a carbon-neutral Games, in part through renewable power, reduction of emissions from venue construction, and introducing low-carbon transportation. In 2019, the the organising committee issued a carbon management plan proposing 18 emissions reduction measures for the Games. Liu Yumin, a director on the committee, earlier this year said by the end of the 2022 Paralympic Winter Games, the venues are expected to consume about 400 mln kWh of green power, which will reduce standard coal combustion by 128,000 tonnes and reduce CO2 emissions by 320,000 tonnes. Beijing’s commitment to reducing the carbon footprint is also seen in the 2022 Games’ use of venues from the 2008 Summer Games, which has effectively saved space and reduced any waste caused by demolition.
Confirming plans – Indonesia has asked the Indonesia Stock Exchange (IDX) to handle trading under the country’s fledgling carbon market, its coordinating economic affairs minister, Airlangga Hartato, confirmed Tuesday, according to the Jakarta Post. That’s in line with previous Carbon Pulse reporting that the government has discussed with the UK possibilities of a carbon partnership between IDX and the London Stock Exchange. Meanwhile, Reuters has reported seeing unpublished government documents confirming Indonesia’s emissions market plans, aligned with this briefing published by Carbon Pulse last month.
AMERICAS
US on China – A White House readout from President Joe Biden’s three-hour virtual meeting with President Xi Jinping noted that the two leaders discussed the existential nature of the climate crisis for the world and the important role that the US and China plays in tackling it, as well as the importance of taking measures to address global energy supplies. The meeting comes days after China and the US played a role in securing a COP26 UN deal, as their two top climate negotiators crafted a joint pledge on stronger climate cooperation, a positive influence on the multilateral process from the two largest GHG polluters. The two presidents also raised the complex nature of relations between China and the US, and the importance of managing competition responsibly.
Plane simple – The US EPA said Monday it will not rewrite the first-ever standards regulating GHG emissions from airplanes finalised in the last days of former President Donald Trump’s administration. Biden had directed the EPA in January to consider whether to rewrite the airplane emissions rules, which face a legal challenge from 12 states and three environmental groups that say the rules do not go far enough. Instead, the Biden administration said it will press for ambitious new international emissions standards at the upcoming round of international negotiations in February at UN body ICAO. (Reuters)
Virgin mangroves – The British Virgin Islands Minister for Natural Resources, Labour and Immigration Vincent Wheatley has said the government will be upscaling the archipelago’s mangrove nursery to a mangrove bank as it seeks to benefit from the blue carbon market. Wheatley made the announcement following his return after attending COP26 in Glasgow. He said apart from the introduction of the mangrove bank, the government will also “strengthen legislation geared towards the protection of the environment, increase and encourage the use of renewable energy systems, electric cars and energy saving light bulbs”.
VOLUNTARY
Small forest future – North American forest carbon offset developer Finite Carbon on Tuesday announced offset standard American Carbon Registry (ACR) has approved the first forest carbon methodology for small landowners. Aimed at landowners possessing between 40 and 5,000 forested acres (16-2,000 ha), in a press release Finite said it plans to use the methodology to offer carbon removal programs to small forest landowners across the US through the company’s CORE Carbon online platform.
Brucey goosey – Nuclear electricity company Bruce Power is launching a C$1 mln Carbon Offset Accelerator Fund to support carbon sequestration and offset projects in the entity’s region and throughout Ontario. In a press release, Bruce Power said the new initiative will be focused on funding projects identified through the Carbon Offset Coalition, along with a partnership the company has established with North American offset project developer Bluesource, and other strategic alliances with a range of organisations. All funds will be allocated by Mar. 31, marking one year since the company made its net zero by 2027 commitment, and will be focused on projects including mitigating climate change by sequestering CO2, protecting watersheds, biodiversity and wildlife habitat, and maintaining important wildlife corridors.
Leaving his Mark – US entrepreneur and reality TV show star Mark Cuban is using blockchain technology to lock up carbon offsets on the low-emission Polygon network. According to CoinTelegraph, the billionaire has been putting $50,000 of carbon offsets on the blockchain as Base Carbon Tons (BCT) every 10 days since the launch of KlimaDAO, a decentralised blockchain project that aims to drive appreciation of the price of BCT. BCTs are digital assets bridged by Toucan Protocol onto the Polygon Network. They represent one ton of carbon from the VCU (Verified Carbon Unit) registry. KlimaDAO, which has accumulated over 9 mln BCTs, told CoinTelegraph that it uses Polygon because of its negligible carbon emissions. (Bankless Times)
Scottish restraint – The owners of Glasgow’s most popular alcoholic tipple have been spurred by the city’s hosting of the COP climate talks into more climate action. The slogan ‘drink sustainably’ will sit alongside a reminder to ‘drink responsibly’ on Tennents new beer cans in an effort to boost recycling rates. The new sustainability messaging is the latest move in a string of environmental activity initiated by the Glasgow-based brewery, which has pledged to remove single use plastic from its consumer packaging and invested £7 mln on equipment to introduce cardboard in place of plastic. (BusinessGreen)
AND FINALLY…
Girl power – Companies with more women in middle management produce less carbon than ones dominated by men, according to research published by the Bank for International Settlements. According to Bloomberg, the work suggests a benefit of hiring women and improving the gender diversity of the staff, not just at board level but throughout the business. Analysis of 2,000 listed companies in 24 advanced economies from 2009 to 2019 showed that a one percentage point increase in the proportion of female managers was associated with a 0.5% decrease in carbon emissions. Previous research on the link between female board members and carbon emissions has produced “conflicting findings,” the authors said. They looked below board level to the management structure. There, they found that “female managers are more inclined towards environmental protection than their male peers.” Managers are just as important to a company’s climate approach as the board since they have to “select a suitable strategy to achieve the objectives.” To explain the findings, they cited other academic papers demonstrating that women are “more likely to consider overall societal well-being without focusing narrowly on shareholders’ interest.”
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