CP Daily: Tuesday December 14, 2021

Published 02:15 on December 15, 2021  /  Last updated at 02:18 on December 15, 2021  /  Newsletter  /  No Comments

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

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TOP STORY

British government declines to intervene in carbon market after cost containment triggered

The UK will not introduce additional supply to calm allowance prices in the country’s carbon market after the scheme’s Cost Containment Mechanism (CCM) was triggered last month, the government said late Tuesday.

AMERICAS

Chile eyes $35 carbon price in 2030 as decisive election looms

The Chilean government on Monday recommended at least a $35 CO2 price by the end of the decade as part of its energy transition strategy, though it is uncertain how this weekend’s run-off presidential election between the left and far-right candidates will influence the government’s carbon pricing strategies going forward.

Finite Carbon announces Canadian forestry offset programme

North American carbon offset developer and supplier Finite Carbon on Tuesday launched a new programme to generate credits from improved forest management practices in Canada, offering a private sector alternative to methodologies under development by Ottawa and provincial governments.

RFS Market: RINs barrel back beneath $1 in volatile post-RVO stretch

US biofuel credit (RIN) prices continued to dive back towards week lows on Tuesday as bullish sentiment regarding the Renewable Fuel Standard (RFS) quotas published last week evaporated.

VOLUNTARY

Voluntary offset price rally seen resuming into 2022 -brokers

Voluntary emissions reduction (VER) prices could resume their rally into the second half of 2022 as trading houses look to further bolster their portfolios, brokers said in a research note on Tuesday.

Crypto firm blacklists HFC-23 credits to end on-chain flow

The technology firm that bridges retired VCS credits onto the blockchain has blacklisted two HFC-23 projects to make sure no more of the controversial credits get tokenised as BCTs.

New DAO eyes crypto market to fund offset projects

An Estonian agritech company on Tuesday launched a crypto venture that will seek to build an on-chain market place for not-yet certified carbon credits in a bid to fund offset projects.

CORRECTION – VCM Report: VERs post weekly loss amid profit-taking, seller stand-off

Corrects Xpansiv market CBL’s spot GEO weekly price difference, which wrongly said it was the first weekly drop since Oct. 

ASIA PACIFIC

China’s national offset trading platform to be ready next June

China’s national offset trading platform will be finalised halfway through next year, though the exact launch date will depend on when the government restarts the carbon credit programme.

EMEA

Euro Markets: EUAs retreat to key options level as expiry looms

EUAs dropped sharply to trade near the most heavily traded call option strike price on Tuesday as the contract expiry approached, while natural gas prices rallied strongly in the afternoon and the UK government decided not to intervene in the British market in December.

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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

TECHNICALS

FuturesTechs, the leading provider of technical analysis to the European energy market, is increasing its product base in 2022 with a new weekly report. Keeping the jargon to a minimum, they hope to attract a wider range of readers in the space beyond their current “active traders” base. They have also listened to feedback from clients and are adding a number of new products in this weekly roundup – UKAs, JKM, seasonal gas markets, as well looking at any developments in equities, forex and cryptocurrencies. For more information or to sign up for a free trial, visit FuturesTechs.co.uk.

INTERNATIONAL

Putin a foot on the brakes – Russia has blocked a UN Security Council draft resolution which would have “defined climate change as a threat to peace”, the New York Times reports. The outlet says the draft “would have obliged the 15-member body to include climate change as a factor regarding ‘any root causes of conflict or risk multipliers’. It also would have asked the UN secretary general to make regular reports on how to address the risks from climate change in preventing conflicts.” However, Russia’s UN ambassador “said it regarded the resolution as a pretext by wealthy Western powers to justify meddling in the internal affairs of other countries”, according to the paper. (Carbon Brief)

Counting the cost – Hurricane Ida and a winter storm that brought freezing temperatures to Texas made 2021 one of the costliest years on record for insurers, according to reinsurer Swiss Re. It said insured losses from natural catastrophes totalled $105 bln this year, the fourth-highest since it began keeping a record. “Natural catastrophe losses are likely to continue to grow more than global GDP given increases in wealth, urbanisation and climate change,” the firm said.

Poor-to-rich – Despite a record-breaking year for energy transition investment in 2020, investors poured $67 bln fewer dollars into clean energy in emerging markets than they did into wealthier countries, BloombergNEF found, suggesting investors retreated hastily from less developed markets to refocus on wealthier countries as the Covid-19 pandemic spread. Energy transition investment in less developed markets fell 10% from 2019-20, as financiers deployed more funds in traditionally lower-risk OECD countries, according to BNEF’s annual Climatescope survey. This marked a major shift from previous years when these rapidly growing economies attracted the majority of new funds deployed. In 2020, developed nations received $262 bln, or 57%, of total global energy transition investment, which includes support for renewable power assets, electric vehicles, and electrified heating. Developing economies received $195 bln, or 43%.

EMEA

Brussels fitness – The European Commission has published new plans for transport aiming to modernise the ‘TEN-T’ EU-wide network of rail, inland waterways, short-sea shipping routes, and roads. It also put out guidance for member states on policies and measures to support social fairness and inclusion in the green transition. The initiatives are forerunners for the raft of policy proposals that Brussels is due to release at around noon on Wednesday under the second part of its ‘Fit for 55’ climate policy package. This is expected to a review of the bloc’s gas market rules and a revision to the bloc’s buildings’ energy performance standards.

German mix – GHG emissions caused by Germany’s natural gas mix will remain unchanged by 2030 under current circumstances, according to the researchers IINAS on behalf of renewable energy consultancy DWR eco. The 27% energy share of natural gas is not compatible with the goal of climate neutrality formulated in the new German government’s coalition agreement nor an emission reduction path in line with the Paris Agreement, DWR eco noted. In addition, the proportion of green gases such as hydrogen will also remain low in 2030 and will not be able to contribute to an improved emissions profile. The study makes the case that switching from natural gas to electricity-based solutions would have a positive impact on the climate. A large majority of people in Germany continue to support the expansion of renewable energy, but the percentage of those who see it as very or extremely important has declined, according to the latest survey by YouGov for the Renewable Energy Agency (AEE). The survey found that 83% of respondents favour the expanded use of renewables, down slightly from 86% a year ago. The share of people who see increased use and expansion as very or extremely important, however, fell to 57% from 65%. (Clean Energy Wire)

Madrid move – Spain will allocate €6.9 bln to renewables, green hydrogen, and energy storage in the next two years and aims to attract another €9.45 bln in private funding under its COVID-19 recovery plan, the government said after getting cabinet approval. Environment Minister Teresa Ribera said the investments should create more than 280,000 jobs, with €1.55 bln of the state funding being put towards green hydrogen to meet a capacity goal of 4 GW by 2030. (Reuters)

Capture cash – Denmark will allocate $2.43 bln towards CCS subsidies over the coming decade in a move to reach one of the world’s most ambitious climate targets. The government said it aims for the first North Sea CCS facilities to be put into service in 2025, delivering 0.4 Mt of emissions reductions a year from that date. (Reuters)

Oslo’s orders – Norway’s $1.4 trillion sovereign wealth fund Norges Bank Investment Management has exited 370 companies over the past decade as a result of ESG screening. With a portfolio of about 9,000 stocks, the world’s biggest owner of publicly traded companies has blacklisted nine companies based on new benchmarks set last year. A further 65 firms have been identified as posing similar sustainability risks, it said, without naming the companies. (Bloomberg)

AMERICAS

A new TIER – The Alberta Ministry of Environment and Parks on Tuesday afternoon officially announced the fund credit amount under the Technology Innovation and Emissions Reduction (TIER) regime will be C$50 in 2022, up from C$40 this year. This rate matches the price trajectory under the Canadian federal ‘backstop’ system, with large stationary sources required into this fund for a portion of their emissions that does not beat their assigned facility-based or sector-based emissions benchmark. Alberta compliance offset prices under the large emitter programme have also historically moved up in line with TIER fund increases.

Backstop for business – The Canadian government in its fall economic statement on Tuesday announced a new programme to return a portion of the proceeds from the backstop CO2 levy to small- and medium-sized businesses to backstop provinces without their own carbon pricing programme. Currently rebates are sent to individual families in the provinces that pay the federal carbon price – set at C$40 this year – while small businesses can apply to get some funding to help reduce their emissions. The government expects to announce details early next year but has already earmarked C$200 mln for the programme, which would benefit businesses in Alberta, Saskatchewan, Manitoba, and Ontario. Additionally, the statement said the government would outline the final design of the CCUS tax credit, proposed in Canadian PM Justin Trudeau’s 2021 budget, in next year’s budget. (Canadian Press)

ASIA PACIFIC

More hydrogen – Designs for a A$10.7 bln green hydrogen and ammonia facility in Western Australia’s Pilbara region have been finalised, with proponents Australian firm Sun Brilliance now looking to secure investors and federal government backing to build the plant, Renew Economy reports. Sun Brilliance CEO Dilawar Singh said the project’s lead engineering contractor, TSK Spain, had signed off on the technical and financial models for the hydrogen and ammonia production facility it proposes to construct in the Western Australian town of Karratha.

Hydrogen first – The first green hydrogen plant in New Zealand has officially started production, Thinkgeoenergy reports. The 1.5 MW plant, located in Taupo, was established by Halcyon Power and uses electricity generated by the nearby Mokai geothermal power plant. Halcyon Power is a 50-50 joint venture of Tuaropaki Trust and Japan-based Obayashi Corporation.

VOLUNTARY

Low-carbon cotton – Better Cotton, the Switzerland and UK-headquartered organisation, which is also the world’s largest certifier of cotton, today announced the launch of a new climate change mitigation target as part of a new strategy designed to deliver substantial environmental, social, and economic impact across the cotton industry by 2030, Fibre2fashion reports. It has set the headline climate change mitigation target to reduce overall GHG emissions per tonne of Better Cotton produced by 50% by 2030, from a 2017 baseline.

Ducks in a row – Carbon offset developer North Bridge Carbon announced Tuesday that is will purchase 60,000+ carbon offsets from conservation organisation Ducks Unlimited, in partnership with project developer Radicle. Carbon units will come from carbon stored in conserved grasslands under the Prairie Pothole Grassland Carbon Program, where the region is a breeding ground for 50-80% of all North America’s migratory waterfowl but is severely threatened by development activities. Ducks Unlimited is protecting 28,000 acres (11,331 ha) of this grassland, owned by more than 50 individual private landowners in central North Dakota.

SCIENCE & TECH

Thwaites in waiting – Scientists have warned that the Thwaites glacier in Antarctica – often known as the “Doomsday glacier” – is fracturing and “retreating rapidly”, the Independent reports. The glacier is the widest on Earth and could raise sea levels if it melted, according to the paper. The glacier is currently held back by a “crucial” ice shelf, but according to scientists the shelf could shatter within the next five years. Scientists have “discovered a series of worrying weaknesses” in the ice shelf. Until recently, the ice it was seen as the most stable part of Thwaites and because of this brace, the eastern portion flowed more slowly than the rest of the glacier. New data show that the warming ocean is eroding the eastern ice shelf from below. Satellite images taken as recently as last month and presented Monday at the annual meeting of the American Geosciences Union (AGU) show several large, diagonal cracks extending across the floating ice wedge. Stretching 120 km across a length of frozen coastline, the glacier already contributes 4% to annual global sea levels. New Scientist adds that, according to the researchers, the glacier “could break free of the continent within 10 years, which could lead to catastrophic sea level rise and potentially set off a domino effect in surrounding ice”. (Carbon Brief)

Tropical Arctic – A new record of 38C was confirmed in the Arctic Tuesday, as the World Meteorological Organization (WMO) warned that other records are likely to be close at hand. The WMO confirmed the reading taken in June 2020 in the Siberian town of Verkhoyansk – which is located 115 km north of the Arctic Circle. Describing the temperature as “more befitting the Mediterranean than the Arctic”, WMO explained in a statement that average temperatures over Arctic Siberia reached 10C above normal for much of last summer.

Methane monitoring – ExxonMobil and Scepter, an atmospheric monitoring company, have agreed to work together to deploy advanced satellite technology and proprietary data processing platforms to detect methane emissions at a global scale, ExxonMobil announced in a press release. The agreement between the two companies has the potential to redefine methane detection and mitigation efforts and could contribute to broader satellite-based emissions reduction efforts across a dozen industries, including energy, agriculture, manufacturing and transportation.

AND FINALLY…

Sub-hub hubbub – China’s Guangdong province, a major technology hub on the southeast coast, plans to move some of its power-thirsty data centres to new sites undersea in a bid to cut energy use. Building them underwater will reduce the need for cooling technology, which can account for around a third of a facility’s total electricity consumption. (Reuters)

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