CP Daily: Tuesday November 30, 2021

Published 01:55 on December 1, 2021  /  Last updated at 01:57 on December 1, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

PREVIEW: Traders unsure whether Q4 RGGI auction will unleash excess volume

The quarterly RGGI auction on Wednesday is set to clear at a new peak after allowance prices soared this fall, though a retracement following a surprising WCI sale result last week has left traders with mixed thoughts on whether bids will be high enough to trigger the programme’s Cost Containment Reserve.

EMEA

Euro Markets: EUAs climb to record settlement price as UKAs leap on fund buying

EUAs set a new record settlement on Tuesday amid supportive fundamentals even as gas prices dropped after Russia vowed to increase flows into Europe, while UK allowance futures jumped as the leading exchange-traded fund was said to have begun accumulating a position in the contract.

UK ETS regulator to announce intervention decision within 2 weeks after cost containment triggered

The UK ETS Authority will announce by Dec. 14 how it will respond to a three-month rise in UK Allowance prices that has taken the market above the threshold for possible intervention, the regulator said late Tuesday.

Brussels aims to target foreign producers in methane-cutting efforts

The EU should focus on cutting methane emissions from foreign energy producers while improving monitoring of its own relatively smaller output, EU sources said on Tuesday, outlining the bloc’s upcoming plans to help meet the aims of the recently adopted Global Methane Pledge.

UK industrial innovation funding shows modest signs of driving abatement

A UK government fund to award clean industry innovation could have a modest impact in driving down emissions in ETS-covered sectors if all companies adopted the technologies, programme data results released on Tuesday suggested.

Think-tank boss appointed to Germany’s economy and climate ‘super-ministry’

The incoming German coalition government on Tuesday appointed the head of environmental think-tank Agora Energiewende as the top official in the new administration’s beefed-up economy and climate ministry.

ICE to launch index-based carbon futures as UK permits make their debut

ICE is set to revamp its carbon price index to include UK emissions allowances, and will offer a new futures contract to track it.

ASIA PACIFIC

New Zealand carbon auction clears at new record high

The New Zealand government on Wednesday sold all the allowances on offer in its quarterly NZU auction at a record high price, immediately pushing the secondary market into unchartered territory.

Chinese province weighs carbon restrictions for new industrial projects

One of China’s most energy intensive provinces is drafting regulations that would require industrial companies to slash existing emissions before they can develop new projects.

China’s Sinopec starts construction of 300 MW green hydrogen project

Sinopec, China’s state-controlled oil refining, gas, and petrochemical giant, has begun construction of a green hydrogen facility in Xinjiang, the company said on Tuesday.

Australia to launch pilot scheme for voluntary emissions targets

Australia on Tuesday announced a pilot scheme that will show big emitters’ progress towards their voluntary emissions commitments, including the use of carbon credits.

AMERICAS

Undersubscribed Nova Scotia carbon auction clears at floor, C$15 below previous sale

Nova Scotia’s fourth cap-and-trade auction failed to sell out and cleared at the scheme’s price floor, the provincial government announced Tuesday.

California watchdog to ‘more pointedly’ call out allowance glut, suspect offsets

A California independent advisory committee laid out options on Tuesday for how the state’s cap-and-trade programme could better align with climate targets while highlighting issues such as carbon border measures and the spike of non-compliance trading, as it debated its annual recommendations.

INTERNATIONAL

UN aviation body rejects all three applicants to provide CORSIA offset credits

UN aviation body ICAO’s Council has rejected all three of this year’s applications for eligibility under its CORSIA carbon offsetting scheme, failing to add the land-based initiatives to the seven programmes approved to date to provide airlines with a supply of carbon credits.

ICYM

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 with new market weightings

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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

EMEA

On the rebound – GHG emissions from EU countries jumped by 18% last spring, according to data from Eurostat, Europe’s statistics office, as the economy recovered from pandemic shutdowns. Eurostat said emissions totalled 867 Mt of CO2e from April to June this year, up sharply from the same period in 2020 when lockdowns across Europe brought emissions to their lowest levels ever recorded. However, the agency added that levels remained below any pre-pandemic quarter and continued the long-term trend of steady reduction. The manufacturing and construction sector – responsible for the largest share at over a third of emissions – saw levels jump 22% from 2020, while the electricity supply sector rose 17% and agriculture remained steady. Households contributed almost a fifth of emissions, largely due to their transport-linked carbon footprint, which rose 25% from last year, while and heating was up 42%. Eurostat’s report represents its first estimates of quarterly EU emissions, as the bloc edges towards its 2050 net zero target.  The data could be used to pre-empt annual EU ETS verified emissions data, which is submitted by all participants in the market by the end of March of the following year. (Euractiv)

Balkan decarbonisation – The Ministerial Council of the Energy Community – an intergovernmental organisation formed by the EU and nine neighbouring eastern European nations – have adopted the EU’s 2019 Clean Energy for All package, with its five key legislative energy policies due to be adopted into law in the countries over in the coming years. Renewables, energy efficiency and GHG reduction targets for 2030 will be adopted at the next Ministerial Council in 2022, following the finalisation of a study by the European Commission. The Council also adopted a decarbonisation roadmap, a political document outlining a sequence of steps towards setting up an ETS by 2025 to help meet 2030 and 2050 emissions targets that the countries’ leaders signed up to under the Nov. 2019 Sofia Declaration. Read Carbon Pulse’s latest on the progress of Energy Community nations’ decarbonisation progress.

Body of work – The European Commission is considering a new EU-wide requirement to measure the carbon emissions associated with construction materials throughout their whole lifecycle but is expected to stop short of regulating for now, Euractiv reports. Buildings are responsible for around 40% of the EU’s energy consumption and 36% of its GHG emissions. To tackle these, the EU has embarked on a huge renovation effort in order to reach its legally-binding objective of cutting emissions down to net zero by 2050. The Commission aims to introduce minimum energy performance standards for all buildings by 2035 as part of the upcoming revision of the EU’s Energy Performance of Buildings Directive (EPBD), due on Dec. 14. However, little progress has been made on reducing the environmental impact of construction materials used in the building sector. A coalition of industry stakeholders representing the entire building value chain want to persuade the Commission to consider a so-called “Whole Life Carbon” (WLC) approach tackling building emissions from the whole supply chain, including the construction and demolition sectors. The coalition estimates that embodied carbon amounts to 10-20% of the total emissions associated with buildings in the European Union, but points to a lack of data available at EU level to measure progress in a consistent way.

Vas-y – France has helped guide international efforts to tackle climate change, but it needs to accelerate key parts of its energy transformation to meet its targets, with the government facing crucial decisions about its future energy mix, according a new policy review by the International Energy Agency. The current rate of deployment of low-carbon energy technologies and energy efficiency solutions in France is not fast enough for the government to meet its energy and climate targets, calling for stronger policy efforts and increased investments, according to the IEA’s 2021 Energy Policy Review of France. In particular, the future development of the country’s electricity supply requires a clear policy strategy to be put in place. France has demonstrated important leadership in raising global climate ambitions, most notably in its leading role in the negotiations that resulted in the landmark Paris Agreement in 2015. At home, France was one of the first countries to enact a climate law, and in 2019, the government put into legislation the goal of reaching net zero emissions by 2050. However, in 2022 the government will need to take important decisions to ensure the country gets on track to meet its mid-century goal, notably in terms of plans to modernise its nuclear power fleet. The government will also have to step up its clean energy ambitions and measures for the coming years across the entire economy to align with the EU-wide goal of reducing emissions by 55% by 2030.

Power costs – The UK paid out more than £76 mln in 2020 to compensate 60 industrial firms for higher costs of electricity due to the EU ETS, the department of business, energy and industrial strategy said on Tuesday. Ten iron and steel companies received £28.7 mln while 11 chemical firms were handed £26.8 mln and 30 paper manufacturers got £19.2 mln. The remaining £1.6 mln was divided evenly between 6 non-ferrous metals companies and 3 others. Indirect compensation is paid to energy-intensive trade-exposed companies to offset the increased cost of power that includes the cost of EUAs.

Pharma forest – Pharmaceutical giant AstraZeneca has unveiled a new partnership programme with UK forestry bodies Forestry England and Borders Forest Trust to invest £1.9 mln to plant more than one million trees across the UK by 2025. This forms part of the company’s SBTi-endorsed efforts to become a carbon-negative business by 2030, building towards AstraZeneca’s goal to plant and maintain 50 mln trees globally by 2025, with planting already underway in Australia, Indonesia and France. (edie)

One PPC – PPC, the biggest South African cement maker, has set a target of attaining net zero emissions by 2050, Moneyweb reports. The company aims to cut emissions by 10% by 2025 and 27% by 2030, it said in its inaugural climate change report on Monday. PPC produces a total of 11.6 million tonnes of cement a year in South Africa, Zimbabwe, Rwanda, Botswana, Ethiopia and the Democratic Republic of Congo.

Another PPC – Greece’s largest power utility Public Power Corp. (PPC) on Tuesday posted a 10% drop in operating profit on soaring gas and carbon costs, Reuters reported. PPC, which plans to switch off all its coal-fired plants bar one by 2023, said EBITDA came in at €626.5 mln, down from €696 mln in the nine months to September last year. CEO Georgios Stassis said the utility was still resilient thanks to hedging and will meet its target of keeping full-year EBITDA at the same level as last year, when the figure came in at nearly €900 mln. PPC said it has boosted its pipeline of renewable energy projects by about three gigawatts to 10 gigawatts as part of its plan to decarbonise operations and boost green energy capacity.

Climate checks – The new Berlin state government consisting of the Social Democrats (SPD), the Greens, and the Left Party presented its coalition agreement on Monday. The three-party coalition, led by mayor Fanziska Giffey (SPD), aims to focus on social and economic equality and climate protection. For the next five years, the coalition wants to define a carbon budget that will be divided among the big emitting sectors, Tagesspiegel Background reports. If a sector fails to meet its target then an immediate action programme will take effect, as is already the case at federal level. The new state government also plans to install a citizens’ climate council and subject all bills and senate proposals to a ‘climate check’ – two measures that have been called for by environmental groups. In terms of urban development, the coalition aims to take a “climate-friendly planning approach” while building 20,000 new apartments a year. It also plans to improve and expand public transport and accelerate the development of charging infrastructure for electric vehicles. (Clean Energy Wire)

ASIA PACIFIC

SBTi commitment – Malaysian telecommunications company, Axiata Group Berhad, has formalised its commitment to the Science Based Target Initiative (SBTi) to reach net-zero no later than 2050, Digital News Asia reports. In a statement, Axiata said it is the first telecommunications company in Malaysia to adopt the SBTi, joining more than 50 others in the industry globally to urgently address climate action.

SCIENCE & TECH

Subak to school – Global non-profit tech accelerator Subak today launches applications for their 2022 cohort. Subak’s accelerator will support 10 early-stage organisations across the UK and Australia in 2022 through a 12-month programme designed to fund, scale, and support data-focused startups working to mitigate the climate crisis. “A leading global hub where climate tech not-for-profit startups come to scale”, Subak channels the agility and expertise of the tech sector to transform understanding of the climate crisis and drive change in policy and mass-market behaviour. The selected organisations will receive up to £110k of unrestricted grant funding and will be guided through a unique curriculum covering tech, data, and policy as well as business fundamentals. Applications for the 2022 cohort can be submitted now here and will close on Jan. 5, 2022. The programme is scheduled to begin the following month. Subak has already successfully guided five organisations through the accelerator, who have collectively raised over £8.5 mln in funding and achieved significant consumer and policy impact. The five members of the founding cohort include New Automotive, Transition Zero, Ember, Open Climate Fix, and Climate Policy Radar. These founding members will remain involved, sharing their data and learnings with the Subak network to help the latest additions in their mission.

Magic mushrooms – Vast networks of underground fungi – the “circulatory system of the planet” – are to be mapped by scientists for the first time, in an attempt to protect them from damage and improve their ability to absorb and store CO2, The Guardian reports.  Fungi use carbon to build miles-long networks in the soil, which connect to plant roots and act as nutrient “highways”, exchanging carbon from plant roots for nutrients. Ecosystems with thriving fungi networks have been shown to store eight times as much carbon as ecosystems without.

AND FINALLY…

Mount Mutombo – A fund led by NBA great Dikembe Mutombo is participating as a co-founder of United Carbon Citizens Ltd., a corporation established for the purpose of investing in ESG projects to combat climate change and generate carbon credits. UCC will be focused on acquiring and managing a diversified portfolio of emission reduction and forest preservation projects, it said in a press release, adding that “the projects and/or companies in which UCC invests will generate significant carbon credits for the voluntary and/or compliance carbon markets”. In particular, UCC will invest Mutombo’s homeland of Africa, as well as South America. The company will be investing in biosequestration forest projects supporting the UN’s REDD+, while also developing and investing in renewable energy projects such as solar power, and investing directly in the reduction of CO2 by capturing and processing flared natural gas and associated liquids and converting the gas into clean LPG fuels that can be used for cooking gas. “UCC’s investment and partnership with local forest owners in Africa and South America to generate carbon credits will be done on a mutually beneficial profit-sharing structure to make all stakeholders aligned and share in the significant upside of the carbon credit markets. The ultimate aim of the company will be the protection of the most vulnerable forests of these two continents and the reduction of greenhouse gas emissions. UCC will partner with governments, tribal leaders, communities, and the local citizens to collaborate toward these efforts.”

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