CP Daily: Tuesday November 23, 2021

Published 02:02 on November 24, 2021  /  Last updated at 02:02 on November 24, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

In-state California compliance offset values rise as ‘DEBs’ requirement takes full effect

California Carbon Offsets (CCOs) with direct environmental benefits to the state (DEBs) have increased in price versus their out-of-state counterparts in recent weeks, ushered in by a new period in the jurisdiction’s WCI-linked cap-and-trade system and having potential implications for voluntary markets.

EMEA

EU lawmakers get to grips with bumper climate package

EU lawmakers are making steady progress in scrutinising the mammoth ‘Fit for 55’ climate policy package, with observers noting that early work is advancing in what is expected to be a lengthy process.

Euro Markets: EUAs have biggest daily drop since Nov. 1 as energy markets post gains

EUAs consolidated around the previous day’s settlement price on Tuesday morning as energy markets posted strong gains amid news of additional US sanctions against the Nord Stream 2 pipeline.

ASIA PACIFIC

Shell flags greening of its Singapore facilities as nation unveils CCS plans

Oil major Shell has announced that it will build a 50,000-tonne per year pyrolysis oil upgrader unit at its Singapore-based energy and chemicals park, one of several commitments made on Tuesday which will contribute to the company’s goal to slash its operational emissions globally in half by 2030.

Australia Market Roundup: ACCUs near A$40, while issuances see slight drop after COP

Spot credits in Australia’s offset market are now within a hair’s breadth of the A$40 mark, while new credit issuance has dipped somewhat in the busy period after COP26 in Glasgow.

Australia, Germany to kickstart bilateral funding for new hydrogen projects

Australia and Germany will push forward with their bilateral hydrogen accord by allocating from early 2022 $90 million of jointly committed funds for new hydrogen projects, Australia’s energy and emissions reduction minister, Angus Taylor, announced on Tuesday.

China’s Fujian sees big drop in ETS emissions after power plant shift into national scheme

Companies in Fujian province’s emissions trading scheme have finalised their 2020 compliance process, with regulated emissions falling by 44% as power plants are now covered by the national market instead.

ICYM

FEATURE: Crypto has big plans for the carbon market

Carbon-backed crypto initiative Klima DAO has shaken the voluntary offset market since its launch a month ago, and it could be just the start as decentralised finance and blockchain ventures eye up project development and intergovernmental emissions trade.

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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

EMEA

Coalition comes together – Germany’s potential ‘traffic-light’ coalition of centre-left Social Democrats, the Greens, and the liberal Free Democrats have confirmed their agreement on a 2030 coal phaseout and a 2040 gas phaseout, Reuters reported from anonymous sources. The three parties are in the final stages of clinching a coalition agreement and hope to present the deal on Wednesday. Read Carbon Pulse’s report from October on a provisional coalition deal including a 2030 coal exit and a subsequent analyst view on how such a timeline is expected to shave 120 Mt from EU ETS emissions.

Border bluster – France will aim for a deal between EU countries to instate a carbon border adjustment mechanism (CBAM) during its presidency of the Council of the EU in the first half of 2022, its Secretary of State for Europe Clement Beaune told a Politico live event. Beaune said the bloc should first have an agreement at the EU level and then look to include allies applying the same standards like the US, UK, New Zealand, and Canada.

Taxing taxonomy – Europe will likely delay a vital plank of its anti-greenwashing regulation for fund managers. Authorities overseeing the process are being slowed down by the sheer complexity of the task, Bloomberg reported, citing one anonymous source. Technical standards may not be in place until the end of next year. That would be a six-month delay compared with a previous deadline, which was already later than the original plan. Europe enforced its Sustainable Finance Disclosure Regulation in March but is still working on substantial updates, including technical standards, to help the industry understand how best to align investment products with the underlying green taxonomy.

No leaks, says the leak – The EU has drafted legislation to reduce methane emissions by forcing oil and gas companies to report their output and find and fix leaks, Reuters reported, citing a draft document. Firms operating in the EU – but not those importing into the bloc – would have to submit estimates for the methane emissions of their installations within 12 months after the regulation comes into force and a year later would be required to report actual measurements of the emissions. Read Carbon Pulse’s report on how this methane regulation could pave the way for the inclusion of the potent GHG in the bloc’s carbon market.

Farming filip – The European Parliament has approved reforms to the EU Common Agricultural Policy (CAP) farm subsidies. The €387 bln CAP is worth around a third of the EU’s 2021-27 budget and will apply from 2023, aiming to shift money from intensive farming practices to protecting nature, and reduce the 10% of EU GHGs emitted by agriculture. It will require that 20% of payments to farmers from 2023-24 be spent on “eco-schemes”, rising to 25% of payments in 2025-27. (Reuters)

Levant links – Israel and Jordan signed a climate cooperation agreement, mediated by the UAE and the US, at a ceremony in Dubai on Monday. Jordan will build a designated solar field and export 600 MW of electricity to Israel, and work on solar energy storage solutions. Israel will examine the possibility of exporting 200 mln cubic meters of water to Jordan from a designated desalination plant. (Jerusalem Post)

Ireland turns to green hydrogen – A Singapore-based offshore wind developer has signed an agreement to build a $10 bln wind farm off the coast of Ireland to power a green hydrogen facility, Business Times reports. Europe has a goal of 6 GW of installed green hydrogen by 2024, and 40 GW by 2030. Enterprize Energy’s 4GW wind farm will supply electricity for hydrogen production and consumption in Ireland, or for conversion into ammonia that can exported.

AMERICAS

Developer damages – Developers of Keystone XL are seeking to recoup more than $15 bln in damages connected to US President Joe Biden’s decision to yank a permit for the border-crossing oil pipeline even after construction began. With a request for arbitration filed Monday, Calgary-based TC Energy formally opened one of the largest trade appeals ever against the US and asked to put its long-running dispute over Keystone XL in front of an international arbitration panel. The legal claim is being mounted under provisions of the North American Free Trade Agreement (NAFTA) that allow foreign companies to challenge US policy decisions. While the new US-Mexico-Canada Agreement that replaced NAFTA limited the use of so-called investor-state dispute settlement systems, arbitration is still temporarily grandfathered for some legacy investments. (Bloomberg)

Jerome on the range – Biden has named Jerome Powell to a second term at the top of the Federal Reserve, focusing on continuity at the central bank. The move has the backing of members from both the Democratic and Republican parties, but progressives are less thrilled, particularly with his approach to climate change, having called on the Fed to scale back fossil fuel financing. However, Powell has also overseen some movement on the climate front at the Fed, including a report where the central bank said climate change was a potential threat to financial stability. The Fed also joined a network of other central banks in collaborating on climate change. (Politico)

ASIA PACIFIC

Tata to Tamil – Indian conglomerate Tata Group is holding talks with the government of Tamil Nadu, the southernmost Indian state, to build an up to 4 GW production facility for solar photovoltaic cells, Renewables Now reports.

VOLUNTARY

Southwest to Northeast – US-based Southwest Airlines on Tuesday announced a $10 mln commitment to Yale University’s Center for Natural Carbon Capture (YCNCC) to research technological advancements and find new solutions to reduce net GHG emissions. The pledge will also support research and educational efforts at the Yale School of the Environment to explore the current state of sustainability, strategy, policy, and economics, emphasising trends related to the aviation industry and focusing on finding new ways to reduce atmospheric CO2. Established in March with initial funding from transport company FedEx, YCNCC is focused on strategies for removing CO2 from the atmosphere and storing it in rocks, oceans, or the biome. It also aims to develop methods for industrial carbon capture to convert CO2 into useful fuels, plastics, and building materials.

AND FINALLY…

Testosterone trouble – Men’s meaty diets are responsible for 41% more climate-heating emissions than those of women, according to a UK study published in the journal Plos One, largely due to eating more meat but also due to more drinks. Animal products were responsible for almost half of the average diet’s GHG emissions: 31% from meat and 14% from dairy. Drink caused 15% of emissions and 8% came from cakes, biscuits, and confectionery. The research also showed that non-vegetarian diets created 59% more emissions than vegetarian diets. (Guardian)

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