CP Daily: Wednesday December 1, 2021

Published 01:05 on December 2, 2021  /  Last updated at 01:07 on December 2, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

Crypto outfit sells single voluntary carbon credit for $70,000

A UK-based crypto currency venture has sold a single carbon credit for $70,000 without stating where the unit came from, a price astronomically higher than what units fetch in the voluntary carbon market.

EMEA

Euro Markets: EUAs slip back from record high amid renewed calls for intervention

EUAs gave up some gains on Wednesday after shooting to a new record for the tenth time in 13 days, a move largely attributed to speculators amid another high-level call for intervention.

ANALYSIS: Norway’s symbolic first step towards reining in its oil industry

Norway’s decision this week to deny oil exploration licences in virgin or little-explored areas in 2022 is seen by experts as a largely symbolic move that nonetheless reflects the mounting pressure on the major fossil fuel producer to curb its exported emissions.

EU launches response to China’s Belt and Road, with green strings attached

The European Commission, EU member states and financial institutions on Wednesday teamed up to mobilise up to €300 billion towards foreign investments over the next five years, aiming to rival China’s Belt and Road Initiative (BRI) while championing the bloc’s green transition and digital priorities.

UK utility Drax aims for 12 Mt a year of carbon removals by 2030

British utility Drax is aiming to generate some 12 Mt of carbon removals a year by 2030, with 8 Mt within the UK and 4 Mt abroad, it said as part of its capital markets day on Wednesday.

EU on track to emit double its 1.5C-aligned carbon budget, says veteran climate campaigner

The EU will emit double its 1.5C-aligned carbon budget under its current emissions targets, according to analysis by a veteran climate campaigner published on Wednesday that suggests the bloc will need to raise its ambition further.

AMERICAS

WCI offset usage in 2018-20 tops 7%, compliance data shows

Emitters in California’s carbon market used offsets to cover nearly 7% of their emissions during the 2018-20 compliance period, government data released Wednesday showed, while Quebec’s usage rate came in slightly higher.

WCI emissions to stay just below cap in 2022, say analysts

GHG emissions under the California-Quebec cap-and-trade programme next year will continue to bounce back from a COVID-induced downturn and sit just below the WCI system’s combined allowance budget, analysts told a conference on Wednesday.

Hot US inflation readings send WCI floor price up 11% for 2022, as auction size announced

The reserve price in California and Quebec’s carbon market auctions will rise to $19.70 in 2022 after higher inflation drove up the minimum bid value by more than 11% year-on-year, as the WCI jurisdictions also announced next year’s auction size.

ASIA PACIFIC

South Korea to open ETS to financials this month

South Korea will open its emissions trading market up to participation from about 20 financial institutions later this month, according to the environment ministry.

Malaysia eyes late 2022 start for domestic carbon market

Malaysia plans to launch a domestic emissions trading market late next year, beginning with voluntary offset trade before rolling out an ETS at a later date, the country’s environment minister said Wednesday.

New Zealand carbon auction clears at new record high

(Updates with market reaction, comments, and background)

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.

INTERNATIONAL

Steel can go green by 2050 with $278 bln spend, report says

Steel can be produced with almost no carbon emissions by 2050 if $278 billion in investment to decarbonise the industry is made over the next three decades, a report released on Wednesday claimed.

VOLUNTARY

Inpex inks four more “carbon neutral” gas deals

Inpex, Japan’s largest oil and gas operator, has signed four separate carbon neutral gas agreements with local Japanese gas and power companies, the company has announced.

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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

INTERNATIONAL

Renewables growth – The growth of the world’s capacity to generate electricity from solar panels, wind turbines and other renewable technologies is on course to accelerate over the coming years, with 2021 expected to set a fresh all-time record for new installations, the IEA says. In its 2021 renewables market report, is said additions of new renewable power capacity this year are forecast to rise to 290 GW in 2021, surpassing the previous all-time high set last year. By 2026, global renewable electricity capacity is forecast to rise more than 60% from 2020 levels to over 4,800 GW – equivalent to the current total global power capacity of fossil fuels and nuclear combined. Renewables are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half. The amount of renewable capacity added over the period of 2021 to 2026 is expected to be 50% higher than from 2015 to 2020. China remains the global leader in the volume of capacity additions: it is expected to reach 1,200 GW of total wind and solar capacity in 2026 – four years earlier than its current target of 2030. India is set to come on top in terms of the rate of growth, doubling new installations compared with 2015-2020. Deployments in Europe and the US are also on track to speed up significantly from the previous five years. These four markets together account for 80% of renewable capacity expansion worldwide.

Food fight – A global push to cut methane emissions and end deforestation is at risk of being held back by weak corporate efforts in the livestock industry, according to investor group FAIRR Initiative. It noted that livestock accounts for 44% of man-made methane emissions yet less than a fifth of the world’s biggest livestock producers currently measure even some of their emissions. It assessed 60 publicly listed animal protein producers and ranks Norwegian aquaculture firms Mowi and Grieg Seafood the highest along with meat and dairy companies were Maple Leaf, Marfrig, and Fonterra. (Reuters)

EMEA

Silly spending – Germany’s funding programmes for environmental innovation and energy efficiency lack measurable targets that can quantify their effectiveness, the country’s Court of Auditors (BRH) has said in its annual report. “We want the funding to reach its target and the funding programmes, which are all necessary to adapt to climate change, to achieve what the Bundestag has set,” BRH President Kay Scheller told Tagesspiegel Background. The BRH claims that the environment ministry (BMU) has used the funding for project components other than innovation, and also criticised the economy ministry (BMWi) for spending more than €9.5 bln on reducing national energy consumption between 2015 and 2019. The BRH noted that additional costs were included for some programmes and not for others, making it unclear “what contribution the budget funds used in the promotional programmes make to the savings targets for energy and greenhouse gas emissions.” The auditors are calling on the ministries to revise their funding guidelines; to set measurable targets for all projects they intend to fund in a given period, and to develop clear evaluation criteria for the funding decisions. In the same report, the BRH noted that Germany’s transport ministry has misused €124 mln of funding intended for rail transport in order to finance highways and airport investments instead. Though permissible under budgetary law, the spending was “counterproductive”, the BRH claims, because it runs “counter to the transport and climate protection goals originally intended by the federal government with the funding.” The BRH is calling on the transport ministry to critically review the funding requirements for subsidies before being budgeted and to adjust them if necessary. (Clean Energy Wire)

And more silly spending – Separately, most of the money put into so-called sustainable funds in Germany is not invested in projects that differ significantly from conventional investment funds, NGO Finanzwende has found in an analysis. “The result is a devastating evaluation of the green investment boom,” the NGO said. Investors seeking to put their capital into climate-friendly activities are potentially being led astray by the fast-growing investment vehicles, as many of the funds promoted as sustainable do not abide by the ESG principles for sustainable finance, the NGO said. The analysed funds included shares in fossil fuel companies such as Shell, Exxon, and Total, or stakes in businesses criticised for their working conditions, such as Amazon, or even in the scandal-ridden German digital banking company Wirecard. “The big promise of many green funds to do good for other people and the environment often does not amount to more than greenwashing,” said Magdalen Senn of Finanzwende. (Clean Energy Wire)

10 years to save – CCS services for large industrial emitters could break even in the next 10 years if emitting a tonne of CO2 costs around €100, Equinor’s CCS chief Torbjorg Fossum told Reuters. Until the breakeven price is reached, government funding is crucial to help early movers, she said, with projects such as Northern Lights in Norway and Britain’s East Coast Clusters providing good blueprints. Fossum said the world needs both CCS and the more costly Direct Air Capture (DAC). “The disadvantage of DAC is that it requires a lot of energy … But on the other hand the beauty of DAC is that you can locate it wherever you want … where there is access to very cheap and clean energy.”

Onyx shutting off-yx – The Dutch government on Tuesday said it would pay Onyx Power €212.5 mln to shut its coal-fired power plant at short notice. The site is one of four coal-fired plants in the Netherlands, all of which are due to be shut down by 2030. The government had already indicated that one of the four would have to close well before 2030 as the Netherlands struggles to meet its climate goals. Onyx Power is owned by investment firm Riverstone Holdings. The Rotterdam plant, formerly owned by Engie will shut in two months after all conditions for the subsidy are met, the government said. (Reuters)

ASIA PACIFIC

Hydrogen race – Australia has the most favourable balance of rewards and risks within the hydrogen sector in Asia-Pacific given strong support from federal and state governments, particularly for export-focused projects that have translated into significant investor interest in the nascent sector, according to a new report by Fitch Solutions industry research, Argus reports. Australia has a robust electrolyser pipeline with around 29,000 MW at present, Fitch said in a new paper. “We expect this momentum of hydrogen development to continue, given that demonstrations to export hydrogen, in collaboration with Japan, have registered strong progress and shows commercial viability,” it said.

Do it like Europe – Kazakhstan plans to align its revamped carbon emissions trading scheme closely with the EU’s as part of its domestic green transition plans, its lawmakers said at a conference hosted by Euractiv. Speakers stressed the need for the EU’s Green deal to tie in with Kazakhstan’s own reform agenda, Euractiv reported.

AMERICAS

Braya-ing of the hounds – Private equity firm Cresta Fund Management closed on the acquisition of a controlling stake in idled Canadian 135,000-bpd Come-by-Chance refinery, renaming it Braya Renewable Fuels, the companies said on Tuesday. The first phase of the conversion would change the Newfoundland-based refinery to a facility capable of initially producing 14,000 barrels of sustainable aviation fuel and renewable diesel daily by about mid-2022, the company said. A second phase will seek to double the capacity of the refinery and incorporate the ability to produce green hydrogen – where renewable energy such as wind or solar powers the extraction of hydrogen. (Reuters)

Back for more – Green group Appalachian Voices this week appealed a Virginia State Corporation Commission (SCC) reapproval of utility Dominion Energy’s RGGI rate request. The SCC in August approved Dominion’s approved Dominion’s request to recover nearly $168 mln in RGGI-related compliance costs, but later that month suspended the rate adjustment and ruling after Appalachian Voices submitted a petition that requested the Commission reconsider and clarify its approval ahead of the Sep. 1 implementation. However, last month the SCC lifted its suspension of the request, rejecting the petition from the environmental organisation.

SAFfy days – United Airlines is flew a jet from Chicago to Washington DC on Wednesday using 100% sustainable aviation fuel (SAF), marking the first commercial flight ever using only renewable fuel, the company said. Currently, airlines are only permitted to use a maximum of 50% SAF. United partnered with other companies including Virent, a subsidiary of Marathon Petroleum whose technology enables 100% drop-in SAF, and World Energy, the world’s first and North America’s only commercial SAF producer to make the flight possible. Virent uses sugar from corn, beets, and sugarcane to make synthetic aromatics needed for jet fuel. (S&P Global Platts)

VOLUNTARY

CDR RFP – Non-profit Climate Vault on Wednesday announced an RFP to identify, assess, and award funds to CO2 removal CDR technologies that are helping make net negative emissions possible. The University of Chicago-based initiative launched this year to purchase allowances from WCI and RGGI auctions and then “vault” them from the market, which Climate Vault said now totals 600,000 tonnes. Climate Vault’s RFP is open to CDR projects for terrestrial and oceans-based processes and technological innovations.

AND FINALLY…

Buggin’ out – UK supermarket chain Morrisons will reduce the use of soya feed at 10 of its free range egg farms and replace it with insects and other feeds as the company works towards becoming the first supermarket to launch own-brand carbon neutral eggs in 2022. Insect ‘mini farms’ will be introduced onto the UK egg farms to feed the hens, who will also receive a supplementary diet of British beans, peas, and sunflower seeds. The insects will be fed on waste from Morrisons own fruit and veg site in Yorkshire – creating one of the UK’s first ‘circular waste’ feeding schemes within the same company to produce food. Over 30t of fruit and veg waste will be recycled each week. (Agriland)

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