CP Daily: Friday November 19, 2021

Published 00:47 on November 20, 2021  /  Last updated at 00:49 on November 20, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: REDD faces longer road to Paris era crediting after Glasgow talks setback

Efforts to develop REDD+ forest protection carbon credits in the Paris Agreement era risk a long road ahead, as divisive views marked the Glasgow COP26 climate summit.

EMEA

Brussels considers setting 2030 carbon removals goal -leaked document

Brussels is considering setting an EU goal to permanently remove 5 MtCO2 a year from the atmosphere by 2030 as part of a wider strategy to develop carbon removals solutions, according to a leaked draft of a European Commission document.

Euro Markets: Late rally despite weaker energy sets EUAs up to test €70 mark next week

EUAs posted their fifth successive intraday record on Friday and look poised to test €70 on Monday after a late rally, even as energy prices slipped back amid growing concerns about the economy as more EU countries reimposed social restrictions to tackle a surge in new cases of COVID-19.

EU plans for a new carbon market reignite concerns over public backlash

EU proposals for a new ETS for buildings and transport risk sparking a new wave of populism and further breaking up the bloc’s political landscape, experts warned this week as lawmakers get to grips with the plans.

AMERICAS

Clean energy largely absent from US House passed reconciliation package, ‘Three Amigos’ statement

US Democrats’ $1.9 trillion Build Back Better (BBB) package passed the House of Representatives Friday, but the budget legislation excluded clean power programmes that were also noticeably absent from a statement following the North American leaders’ summit.

California gasoline consumption ticks up in August for new pandemic-era high

California gasoline usage inched up in August and narrowed closer towards pre-pandemic levels, as diesel consumption also increased slightly, according to state data published this week.

California power emissions fall in September as gas generation wanes

Electricity sector CO2 emissions under the California Independent System Operator (CAISO) receded to a three-year low in September as fossil gas power reduced and imports rose, according to data published Friday.

Financials’ CCA length breaches 100 mln before Q4 auction, emitters hold firm

Speculators cut their net length in California Carbon Allowance (CCAs) this week to the lowest level in five months, while compliance entities kept their positions mostly steady as the November WCI sale approached, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

LCFS Market: California prices continue slide towards $140

California Low Carbon Fuel Standard (LCFS) prices dug new multi-year lows this week as traders said credit generators persisted on the offer and compliance entities were uninterested in bidding.

ASIA PACIFIC

CN Markets: CCERs see compliance demand boost as emitters aim to bank carbon allowances

Trading activity in China’s carbon market rose in the past week as an increasing amount of compliance entities chased offset credits in order to be able to hold on to their allowances for use in future years, though prices remained fairly stable.

Indonesia rules out international ties to domestic carbon market

Indonesia, which will introduce a hybrid ETS and carbon tax next year, will not allow any cross-border carbon trading to occur until the country meets its greenhouse gas emissions targets, Finance Minister Sri Mulyani Indrawati said on Friday.

VOLUNTARY

TotalEnergies pursues forest-based offset project in Suriname

French oil major TotalEnergies announced Friday that it has signed an agreement with the Suriname government to support its efforts to reduce GHG emissions by preserving the country’s forests, in exchange for carbon credits.

Vitol, Wentworth Resources eye carbon offtake deal to help offset Tanzania gas field emissions

Trading house Vitol has signed a memorandum of understanding with Tanzania-focused gas producer Wentworth Resources to develop a portfolio of “community focused” carbon credits in the country through 2030.

ICYM

EU watchdog finds no proof of carbon market abuse -preliminary report

The EU’s securities market regulator ESMA has found no evidence of anti-competitive trading behaviour in the bloc’s carbon market, it said in a preliminary assessment published late Thursday at the request of member states.

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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

Can we still be friends? – Reliance Industries, India’s largest company, struck a deal in 2019 to sell 20% of its oil-to-chemical business to Saudi Arabia’s Aramco, the state-controlled energy giant. The stake, valued at $15 bln, was to be one of the largest investments by a foreign company in India. Now the deal appears to be off, apparently a victim of Reliance’s shifting priorities as it pursues a green energy future. Reliance attributed the change of heart to the “evolving nature of Reliance’s business portfolio,” in a statement released on Nov. 19. After decades in the fossil fuels business, Reliance announced in June a major investment in renewable energy. Chairman Mukesh Ambani said the company would invest $10 bln over three years to build four factories to manufacture solar photovoltaic modules, batteries, fuel cells, and electrolysers, for the production of hydrogen. Aramco has its own climate agenda, which includes being “operationally” carbon neutral by 2050, a goal that refers only to its own energy use, not what it produces. Yet those ambitions do not appear to be aligned with Reliance’s. In the statement, Reliance took pains to stress the companies were parting on good terms and that they had  “a very deep, strong and mutually beneficial relationship.” In other words, after the breakup they hope to remain friends. (Quartz)

AMERICAS

Chop chop – Deforestation in Brazil’s Amazon rainforest has hit its highest level in over 15 years, with Brazil’s space research agency Inpe finding that deforestation increased by 22% there in a year despite the government being one of over 100 nations at COP26 pledging to end their deforestation by 2030. Inpe found some 13,235 sq km was lost during 2020-21, the highest amount since 2006. Brazil’s environment minister Joaquim Leite said the data represents a “challenge” and that “we have to be more forceful in relation to these crimes”, but added that the data “does not exactly reflect the situation in the last few months”. (BBC)

And they’re off(shore) – Ground was broken Thursday on a project dubbed the US’ “first commercial scale offshore wind farm.” Located in waters 24 km off Martha’s Vineyard in Massachusetts, it’s hoped that the 800MW Vineyard Wind 1 facility will start sending power to the grid in 2023. Vineyard Wind 1 is being built by Vineyard Wind LLC, a 50-50 joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables, and is expected to cut CO2 emissions by 1.6 Mt annually. (CNBC)

Modelling meeting – The RGGI states will hold two duplicate, virtual public meetings Dec. 13 and 15 to discuss to discuss considerations for the electricity sector analysis that will be a key component of the 2021-22 Program Review. The power sector cap-and-trade member states will discuss the Integrated Planning Model (IPM) that will be used to conduct the analysis, and draft approaches, considerations, and questions to help determine the assumptions to be used in modelling scenarios.

ASIA PACIFIC

Green aviation hub – The Civil Aviation Authority of Singapore (CAAS) will work with aerospace firm Airbus to launch a technical feasibility study of an airport hydrogen hub and the infrastructure requirements to support future hydrogen-powered aircraft operations, The Straits Times reports. The two-year study will cover areas such as the production, storage and distribution of hydrogen, aircraft ground services, logistical equipment, and refuelling systems. Last week The Straits Times also reported that the CAAS said that it will trial the use of sustainable aviation fuels with Singapore Airlines and Singapore’s investment company, Temasek. The pilot programme will run for a year, and producers and suppliers of sustainable aviation fuel have been invited to present their plans on delivering cleaner fuels.

Greens see red – Australia’s embryonic hydrogen industry has a new threat in the form of Bob Brown, an Australian environmentalist and a former Greens senator in the Australian parliament, the Australian Financial Review reports. Brown said that the potential energy export blockbuster must not be based on mega dam projects, bird-killing wind farms, or without a “social licence” that returns foreign earnings to communities. The demands by Brown, the former Greens leader who on Thursday launched a broadside against resource magnate Andrew Forrest’s ambitious global hydrogen plans, puts the industry on notice that the Greens could use any balance of power they win in a potentially hung parliament to erect barriers.

EMEA

CCU conditions – Carbon capture and utilisation (CCU) technologies will be required on a large scale in a climate-neutral economy, but these only make sense in combination with direct air capture, Germany’s Federal Environment Agency (UBA) said in a report. The agency warned that “CCU with fossil carbon emissions – even those that are unavoidable in the future – is no substitute for greenhouse gas reduction at source.” If fossil carbon is captured by CCU and used elsewhere, “it always ends up in the atmosphere at the end of the use chain, regardless of the number of subsequent uses.” Hydrocarbons will be needed in the long term, even in an efficient and greenhouse gas-neutral economy, whether in artificial paraffin or for plastics, but “the future carbon cycles can only be closed in the long term and permanently with additional carbon extraction from the atmosphere,” UBA said. “Technologies for carbon extraction from the atmosphere should be promoted today so that they are available on a sufficient scale later.” A prerequisite for a climate-friendly use of CCU technologies is a rapid development of a complete renewable electricity system – nationally, Europe-wide and globally – as the technology requires a lot of energy. CCU with DAC should only be used once renewables have reached a share of more than 80% of power supply, UBA said. “Anything else would endanger the short and medium-term climate targets.” (Clean Energy Wire)

Letter of the law – The European Commission was set to send letters to Poland and Hungary on Friday in an informal first step toward triggering a never-before-used mechanism that could cut EU money for countries over rule-of-law concerns, two anonymous officials told Politico. Once formally triggered, the countries will have two months to respond to the mechanism, which allows the EU to cut NextGenerationEU post-pandemic recovery funding of which at least 37% of spending is meant to be earmarked for climate purposes, and the remainder subject to a do-no-harm principle.

SCIENCE & TECH

Hydrogen breakthrough – Researchers at the Australian National University say new technologies that allow hydrogen to be produced directly from solar energy – skipping the need for expensive electrolysers – could be the pathway to low-cost renewable hydrogen supplies, RenewEconomy reports. In new research published in the journal Advanced Energy Materials, the ANU research team has developed new “photoelectrode” designs, which could be a critical step towards high efficiency and low-cost renewable hydrogen production.

Yara vessel – The world’s first fully electric and self-steering container ship, owned by fertiliser maker Yara , is preparing to navigate Norway’s southern coast and play its part in the country’s plans to clean up its industry. The vessel is set to replace lorry haulage between Yara’s plant in Porsgrunn in southern Norway and its export port in Brevik, about 14 km away by road, starting next year. It will cut 1,000 tonnes of carbon emissions per year. (Reuters)

AND FINALLY…

Safety burps – DSM’s Bovaer feed additive that reduces methane emissions from cattle could be the first of its kind to come to market in Europe after receiving a positive assessment on Friday from the European Food Safety Authority (EFSA). EFSA found that it cuts emissions in dairy cattle by 20-35% without affecting production and was safe for the cows and for consumers drinking their milk. DSM has yet to market the additive, although it received approval from regulatory authorities in Brazil and Chile in September and has since signed a development agreement with Brazil’s JBS, the world’s largest meat processing company. (Reuters)

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