CP Daily: Monday November 29, 2021

Published 02:27 on November 30, 2021  /  Last updated at 02:27 on November 30, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Position adjustments ahead for top carbon ETF after tracked index rebalances

The world’s largest carbon allowance ETF is expected to adjust its holdings – currently valued at almost $1.4 billion – in the coming days after the index it tracks announced a major rebalancing and new market weightings.

EMEA

MEPs raise doubts on EU carbon border measure’s fit with global trade rules

EU lawmakers cast doubt over whether the bloc’s proposed Carbon Border Adjustment Mechanism (CBAM) is compatible with global trade rules on Monday, in a preliminary MEP exchange that raises the potential for changes to the plans.

Green hydrogen can cost less than €1.8/kg in EU by 2030 -von der Leyen

European Commission President Ursula von der Leyen said on Monday that the EU should aim to drive the cost of green hydrogen to below €1.8 per kilogram by 2030, hitting a price level that would secure market competitiveness for the low-carbon fuel.

Iceland’s new coalition sticks to 2040 net zero goal, ending oil exploration

Iceland’s coalition talks ended Sunday, confirming the nation’s existing climate and energy commitments, as the ruling bloc enters its second consecutive term after September’s general election.

Euro Markets: EUAs stabilise after early rally as coal power profitability grows

EUAs rallied sharply at the start of trading on Monday, setting a new record high before stabilising, as price moves in energy markets increased the profitability of coal-fired power at the expense of gas.

BP confirms key UK green hydrogen project

Oil major BP is planning to build a new, large-scale green hydrogen facility in the Teesside area of England’s north-east, with capacity that could reach 500 MW by 2030, the company announced on Monday.

AMERICAS

NA Markets: CCAs pare back losses after auction surprise, RGGI levels near $13

California Carbon Allowance (CCA) prices recovered nearly half their losses in recent days after the Q4 WCI auction settled at a massive discount to the secondary market, while RGGI Allowances (RGAs) rebounded slightly from their own retracement just before this week’s quarterly sale.

Emitters, speculators cut California carbon positions before Q4 auction results

Both regulated entities and financial players shed their California Carbon Allowance (CCA) holdings last week prior to the release of the November WCI auction results, according to US Commodity Futures Trading Commission data published Monday.

ASIA PACIFIC

Australia Market Roundup: ACCUs tip-toe to new high as issuance picks up again

Australian carbon offsets continue to rise to unprecedented levels but on small volumes, while the minting of new units the past week returned to regular levels after a brief dip.

US investment bank hires head of Asian environmental products

A major US investment bank has added to its growing carbon desk in Singapore by hiring a dedicated head of Asian environmental products.

VOLUNTARY

VCM Report: VER price hike slows near record levels amid post-COP lull

Voluntary emissions reduction (VER) prices edged to new heights in some standardised contracts this week, while others slipped back amid subdued holiday-interrupted trade following the COP26 UN climate talks earlier in the month.

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CONFERENCES

IETA is delighted to announce the 2021 Virtual Edition of its European Climate Summit takes place Dec. 7-8. Experience with carbon markets in Europe runs deep. It is a world leader in climate action, designing policies and programs to adapt to changing market dynamics. 2021 and beyond heralds new territory for the market with new regulations and uncertainties, links to new markets and sectors, and funds to drive green recovery, innovation and technology. This edition will look at the future of emissions trading in europe, and aligning the EU ETS with net zero. IETA will bring together leading climate and energy practitioners, industrials, carbon traders, analysts, regulators, to discuss and analyse key developments in carbon markets and emissions trading, green recovery and finance, industry decarbonisation and energy transition. Attendance is free of charge – Register via link above.

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

ASIA PACIFIC

Cancel culture – Australia’s Morrison government has used sweeping new powers to override state and territory government support for an international agreement to cut emissions, The Guardian reports. The laws seek to overturn the participation of four Australian states and two territories in the Under 2 Coalition, whose website states it is “a global community of state and regional governments committed to ambitious climate action in line with the Paris Agreement”. Australia, however, is a signatory to the Paris Agreement, and recently committed to a net zero emissions by 2050 target. In an email dated Nov. 23, a federal trade ministry official told his counterpart in the Victorian government that its participation in the coalition was “no longer in operation”. Other states participating in the Under 2 Coalition include Queensland, South Australia, and New South Wales. The Australian Capital Territory and the Northern Territory are also participants among the 260 subnational government sign-ups. Lily D’Ambrosio, Victoria’s climate minister, said the trade ministry had used a technicality that was “illogical” to cancel her state’s participation. “It’s egregious. They are vandals,” she said.

Hydrogen plan – South Korea plans to step up the production of clean hydrogen and expand its production and consumption infrastructure to make it the country’s main energy source by 2050, the Korea Times reports. The plans are part of the government’s comprehensive blueprint on the hydrogen economy, as the country is pushing for the development of hydrogen and other renewable energy as an alternative to fossil fuels with a goal to go carbon neutral by 2050. Under the plan, the government will provide 27.9 mln tonnes of hydrogen per year by 2050, all of which will be either green or blue hydrogen, while excluding grey hydrogen.

Low carbon agreement – Petronas has inked two Memoranda of Understanding (MoUs) with Malaysia Aviation Group to reduce carbon emissions in aviation with the use of low-carbon and sustainable fuels, innovation, and technology, the Malaysian national oil company stated in a press release. The MoUs mark the companies’ pledge to explore potential collaborative opportunities that advance sustainability, including the development and adoption of sustainable aviation fuels, application of innovative technologies for carbon reduction, carbon offset and waste management, as well as research and development for low carbon applications.

EMEA

Bog boost – A group of organisations who own and manage a third of England’s land have signed a pact to boost peat bogs, woodlands, and rivers, reports the i newspaper. Signatories to the pledge include the National Trust, RSPB, Church Commissioners for England, the Duchy of Cornwall, National Parks England, Soil Association, Wildlife Trusts and Woodland Trust. Managing more than 10.5 mln acres of countryside, these groups have pledged to cut emissions, create and restore habitats for wildlife and carbon storage, and work with local communities to care for landscapes and deliver related benefits.

Spekboom offsets – South African National Parks is in talks with companies to offset their carbon emissions through funding the conservation of the spekboom succulent, a plant known for its super CO2 absorption qualities and climate resilience. Spekboom’s capacity to offset carbon emissions is compared to that of moist, subtropical forests, according to the Spekboom Foundation. “One of the projects we looked into is one in which the company purchases additional land adjacent to Addo National Park to expand the spekboom species,” said park manager Nick De Goede. The park is still establishing its offsetting methodology but says that it has already convinced companies that it made more sense to include wildlife in the offset locations because, for example, elephants eat the top of the plant which then helps the plant grow and expand. (Mail & Guardian)

No blame – Scottish First Minister Nicola Sturgeon said on Monday it was unlikely but not impossible that six cases of the Omicron variant of COVID-19 found in the country were linked to the COP26 conference held earlier this month in Glasgow. “If you consider the timelines of COP, it is not impossible, but it’s perhaps also not probable that there are connections to COP.” The UN climate summit held in Glasgow this month resulted in close to 300 people testing positive for COVID. Cases include the governor of the Brazilian state of Piaui, Wellington Dias, who tested positive under the convention’s mandatory daily testing.

Taxing times – The British Treasury should report on the environmental impact of each of its tax measures from now on as part of the massive effort needed by the Government to ensure the UK meets its ‘net zero’ 2050 target, says the Chartered Institute of Taxation (CIOT). The Government publishes Tax information and impact notes (TIINs) to explain policy objectives together with details of the impact of a tax policy on: the Exchequer; the economy; individuals, households and families; business and civil society organisations; equalities; HMRC and other parts of government; and any other impact. Occasionally wider environmental impact and carbon assessments are included in TIINs in the final section called ‘other impacts’, though there is no mandatory requirement to show whether environmental impacts have even been considered. The CIOT is calling for the inclusion of ‘environmental impacts’ as a compulsory standalone category for TIINs on all tax policy proposals.

A bit of housekeeping – The UK ETS Authority has published determinations of the 2021 and 2022 carbon prices for use in civil penalties under the country’s carbon market.  Specifically, the values – £47.96 for 2021 and £52.56 – apply to calculations of penalties imposed for carrying out a regulated activity without a permit; or where a hospital or smaller emitter has under-reported its emissions, has exceeded its emissions target, or has failed to notify the Authority of various things.  The prices are not relevant for determining the find levied on companies that fail to surrender enough allowances to cover their previous year’s emissions output.

AMERICAS

Bras neck – Brazilian state-controlled oil firm Petrobras is to “boost its capital expenditure to $68 bln over the next five years,” betting on its role as a low-cost hydrocarbon supplier, the FT reports. The planned spending was up almost one-quarter compared to its previous projection with the largest part to be spent on oil exploration and production, with the greatest share of this going towards its lucrative ‘pre-salt’ deep sea reserves that the company says are cheaper to exploit and have lower carbon emissions per barrel. The plans run counter to IEA scenarios which foresee no new drilling to keep the world within 1.5C of warming.

Canadian capture – Capital Power and Enbridge have agreed to partner on a CCS project that would aim to capture up to 3 MtCO2 annually in Canada. The proposed project would serve Capital Power’s Genesee Generating Station near Warburg, Alberta, which currently provides over 1,200 MW of baseload electricity. Enbridge would be the transportation and storage service provider to the project, which could be in service as early as 2026. (Reuters)

Deja pneu-matics – The Alberta Ministry of Environment and Parks on Monday published a corrected memorandum that is related to changes in eligibility for future and existing carbon offset projects that use the Quantification Protocol for Greenhouse Gas Emissions from Pneumatic Devices. The memorandum replaces one issued by the government agency on July 16 and Nov. 25 related to the same subject.

AND FINALLY…

This spud’s for you – University of Maine researchers are trying to produce potatoes that can better withstand warming temperatures as the climate changes. Warming temperatures and an extended growing season can lead to quality problems and disease, Gregory Porter, a professor of crop ecology and management, told the Bangor Daily News. “The predictions for climate change are heavier rainfall events, and potatoes don’t tolerate flooding or wet conditions for long without having other quality problems,” Porter said. Around the world, research aimed at mitigating crop damage is underway. A NASA study published this month suggested climate change may affect the production of corn and wheat, with corn yields projected to decline, while wheat could see potential growth as soon as 2030 under a high greenhouse gas emissions scenario. Maine is coming off of a banner potato crop thanks in part to the success of the Caribou russet, which was developed by UMaine researchers. But Porter fears that even that variety isn’t as heat tolerant as necessary to resist the future effects of climate change. (AP)

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