CP Daily: Wednesday December 15, 2021

Published 03:02 on December 16, 2021  /  Last updated at 03:08 on December 16, 2021  /  Newsletter  /  No Comments

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

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TOP STORIES

EU winter package completes ‘Fit for 55’ climate proposals, political debates loom

The European Commission published its second set of ‘Fit for 55’ climate policy proposals on Wednesday, seeking to ensure the EU meets its 2030 emissions target and is on track to reach net zero by 2050.

ANALYSIS: EU plans for tougher emissions controls could ease path for parallel ETS

EU plans to tighten emissions regulations for buildings and transport could lower projected carbon prices for the bloc’s parallel emissions trading system, potentially easing lawmaker concerns that the proposed market will cause a political backlash.

VOLUNTARY

Shell, EnKing to launch $1.6 bln joint carbon credit venture in India -media

Oil major Shell and India-headquartered carbon developer and trader EnKing plan to launch a $1.6-billion joint venture that will see the two generate up to 115 million nature-based carbon credits over the next five years, according to media reports citing unnamed sources.

Offset developer to screen buyers in bid to avoid greenwash

A major carbon credit developer and seller has unveiled plans to assess whether voluntary offset buyers are taking credible climate action before agreeing to sell to them, a landmark move to raise standards in the fast-growing global market.

ASIA PACIFIC

CN Markets: Many seen to miss China’s first ETS compliance deadline despite spike in trading volumes

Volumes in China’s emissions trading scheme have hit record highs in recent days as emitters have scrambled to meet Wednesday’s main compliance deadline for 2019 and 2020 emissions, but market participants reckon at least half the companies involved will have failed.

China sees first monthly downturn in thermal power in more than a year

China’s thermal power generation fell in November for the first time in over a year amid slowing economic growth and ongoing curbs on energy intensive industries.

Australia Market Roundup: Offset industry voices concern over sudden project restrictions as ACCUs continue to climb

Offset market participants are alarmed at the government’s rapid move to restrict some project types, while spot prices in the Australian market continue their rapid ascent amid thin supply.

Australian bank Macquarie forms green hydrogen joint venture with European chemicals outfit

Macquarie Group’s green investment arm has joined up with a European chemicals maker to form a green hydrogen industrial outfit to help develop the electrolysis market for hydrogen in Europe, the two companies have announced.

Western Australia to release 3 mln hectares of land for carbon farming

The Western Australia (WA) state government will make available 3 million hectares of unallocated land for carbon farming to assist in carbon mitigation and improve biodiversity in the state, it announced on Wednesday.

AMERICAS

Pennsylvania House approves RGGI blocking resolution as governor’s administration refutes move

The Pennsylvania House of Representatives on Wednesday evening sent on a resolution that would prevent Governor Tom Wolf from implementing the state’s final RGGI-aligned cap-and-trade regulation, though the Democratic leader is expected to veto the measure as his administration simultaneously argues a legislative office is incorrect in its recent move to hold up the power sector carbon market.

Alberta offset prices steady after govt announces C$50 large emitter price

Alberta compliance offset prices were little changed on Wednesday after the provincial government announced the excess emissions charge under the jurisdiction’s Technology Innovation and Emissions Reduction (TIER) regime will increase next year in line with its expected trajectory.

US carbon price would have “relatively modest” effect on emissions -govt study

The imposition of a federal CO2 tax or cap-and-trade programme would significantly drive GHG abatement from electric power, but overall mitigation would lag due to lower price sensitives in other sectors, according a government study published Tuesday as lawmakers struggle to pass legislation that features far less explicit climate action.

Finite Carbon announces Canadian forestry offset programme

*Updates Tuesday’s story with additional details*

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.

EMEA

Euro Markets: EUAs pinned to €80 as options contract expire while UKAs shake off weak auction

EUA prices circled the €80 mark in the hours leading up to and after the Dec-21 options contracts expiry, while UK Allowances shrugged off a relatively weak auction result to close at its second-highest level since the September all-time high.

EU power relief reform needed before CBAM moves to next level -experts

The EU’s proposed Carbon Border Adjustment Mechanism (CBAM) cannot charge importers for what is often the majority of their emissions until the bloc gets its own electricity-pricing house in order on carbon-related compensation, according to a report launched on Wednesday.

EU lawmakers strike deal on cross-border energy projects

EU institutions have struck a provisional deal on cross-border energy projects that bans public money being spent on new fossil fuel projects but allows a limited window to convert hydrogen facilities.

EEX announces next year’s EU carbon permit auction schedules for aviation, Northern Irish power sectors

Energy exchange EEX on Wednesday published next year’s EU carbon allowance auction schedules for the aviation and Northern Irish power sectors.

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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.

EMEA

Shutdown shopping – Germany has agreed compensation terms with utilities to close down 533 MW of coal power output by May, 22 2023, in the fourth of a series of shutdown tenders over 2020-27. These include Uniper’s 510MW Staudinger 5 unit and two small units operated by food producer Pfeifer & Langen. Bids had ranged between €75,000 and €116,000 per MW, the latter being the maximum the regulator had allowed. Germany has pledged to ideally abandon coal by 2030 and achieve a mostly carbon-free energy system by 2050, while trying to lessen the impact on utilities, regions, employment, and the budget. Under a series of tenders between 2020 and 2027, operators are asked to declare at which price they would be prepared to shut their coal plants in return for funds to offset some of their losses. After 2027, compensation will no longer be available. The next auction will take place on Mar. 1, 2022. (Montel, Reuters)

Stretching support – Spain will extend a tax cut on electricity bills until May 1, 2022 in a bid to help consumers cope with rising energy prices, budget minister Maria Jesus Montero said on Wednesday, without specifying which tax cuts will be extended. In June, Spain cut the sales tax on electricity bills to 10% from 21% until the end of the year and suspended a 7% tax on the value of electricity generation, which utilities ultimately pass on to the retail market price. (Reuters)

Capture queue – Five companies have applied to build new CO2 storage on the Norwegian continental shelf. Shell, Equinor, Horizon Energy, joint venture Northern Lights, and Eni’s Vaar Energi met the Dec. 9 deadline. The government said it planned to allocate the offshore acreage for CO2 storage in the first half of 2022. (Reuters)

CCS awards – The first contracts for a design and development competition have been awarded for Net Zero Teesside Power’s CCUS project, the Northern Echo reports. BP, which will be the operator of Net Zero Teesside Power, awarded contracts for the gas-fired power station and the Northern Endurance Partnership’s facilities which will gather and compress CO2 and export it offshore for storage. Technip Energies and General Electric consortium – led by Technip Energies and including Shell and Balfour Beatty – and Aker Solutions Doosan Babcock and Siemens Energy consortium, led by Aker Solutions and including Aker Carbon Capture were the two selected contractor groups.

Help wanted – The EU’s push to improve energy efficiency in buildings and reduce the amount of fossil fuel they consume could create more than 160,000 jobs in the energy and heating sector by 2030, according to the European Commission. But there are fears that labour and skills shortages in Europe’s construction sector, caused by an ageing workforce and unattractive employment conditions, will mean there are not enough people to take up the jobs vital to renovating buildings in line with Europe’s climate ambition. In its 2020 renovation wave strategy, the EU executive states that “already before the COVID-19 crisis, there was a shortage of qualified workers to carry out sustainable building renovation and modernisation”. These warnings are echoed by the industry. For instance, in Germany in 2015, over 43% of business owners in the heating sector were older than 50. Meanwhile, the number of trainees across skilled trade sectors has been shrinking, with just 361,000 in 2015 compared to 630,000 in 1997. The main issue for the construction industry is that it has adopted a business model focused on cheaper and precarious labour instead of training and good working conditions, which makes it less attractive for workers, experts told Euractiv.

ASIA PACIFIC

Blowout blunder – Mining giant Anglo American has admitted to a “large blowout” in GHG emissions at a coal mine complex in central Queensland that is expected to cost it about $10 mln in carbon offsets, the Guardian reports. Documents released under freedom-of-information laws show the multinational company conceded it had breached emissions limits ​​by at least 841,000 tonnes of CO2e at its Capcoal mine complex in central Queensland. The Australian Conservation Foundation, which obtained the documents, said it was the latest in a string of emissions breaches at the mine complex, which provides metallurgical coal used in steelmaking, since the introduction of the safeguard mechanism policy in 2016. Annica Schoo, the foundation’s lead environmental investigator, said the mining giant had consistently relied on loopholes in the policy. Had it been required to pay for emitting above its limit every year since 2016-17 it would face a carbon credit bill of about $50 mln, she said. The safeguard mechanism was introduced under then PM Tony Abbott to prevent increases in emissions at large industrial sites by requiring polluting companies to buy carbon credits if they emit above their baseline. In practice, many companies have been allowed to either increase their baselines or change reporting periods to avoid penalties.

ETS windfall – The New Zealand government has announced the creation of a $NZ4.5 bln ($3 bln) Climate Emergency Response Fund that will underwrite the Ardern government’s investments in cutting emissions and improving climate resilience, Renew Economy reports, using money raised from the nation’s major greenhouse emitters. The fund, announced in a budget update released by finance minister Grant Robertson, has been created using revenue collected by the government through New Zealand’s emissions trading scheme, meaning it is effectively being funded by major polluters.

Put a little Kep in your step – Keppel Land, the property arm of Keppel Corp, has set a net zero carbon commitment, with an aim to reach this by 2030, Business Times reports. In a press statement, Keppel Land said that it will cut emissions that come directly from the company’s operations (Scope 1) and emissions from power supplied to the company (Scope 2) by 100% in 2030, with 2020 being the base year. Emissions associated with the company’s supply chain, or Scope 3 emissions, will be trimmed by 20% per square metre by 2030. The commitment will make Keppel Land the first in Asia’s real estate sector to set a near-term 100% reduction science-based target for Scope 1 and 2 emissions in line with the 1.5C trajectory, the company stated.

AMERICAS

That’s all we Sask – Provincial utility SaskPower says it will not be passing on the upcoming federal carbon price increase under the ‘backstop’ output-based pricing system (OBPS) to its customers. The excess emissions charge under the OBPS is set to increase to C$50/tonne on Jan. 1 from C$40 this year, but the Crown utility says reduced coal emissions and more reliance on renewable energy will allow customers to pay the same rate for the carbon price next year as they did in 2021. SaskPower said it is committed to reducing its CO2 emissions by at least 50% cent from 2005 levels by 2030 and is aiming to reach net zero by 2050. (Global News)

One-stop CCS – A CCS start-up billing itself as the industry’s first “vertically integrated super developer” has raised $30 mln in Series A funding. Carbon America on Wednesday morning announced the funding from investors including Canada Pension Plan Investment Board, ArcTern Ventures, Energy Impact Partners, and others. The Colorado-based company, founded in 2019, bills itself as a “one-stop solution,” providing engineering and tech, development, financing, permitting, navigation of incentives, sequestration site management, and more. The company declined to name projects or clients it is working with, but told Axios its “target customers” are in the ethanol, steel, cement, and power industries.

Dare to flare – US onshore gas flaring dropped to its lowest since 2012 in Q3 of 2021, led by declines in the Bakken and Permian basins, as more companies attempt to minimise the burning off of excess gas, consultancy Rystad Energy said on Wednesday. Investors and environmentalists have demanded oil and gas firms reduce carbon emissions, including the burning of natural gas, to counter global warming. The US EPA has recently proposed the first regulations targeting methane from the country’s existing oil and gas facilities. Rystad said flaring activity in September fell about 24% from the prior month to 380 mln to 390 mln cubic feet per day. The reduction in the Bakken was in line with expectations while the change in the Permian Basin, the nation’s largest oil field, was surprising, Rystad said. However, a separate report on Tuesday showed high rates of methane escaping from oil and gas operations in the Permian Basin in the first two weeks of November. An aerial survey by EDF detected major methane plumes from 40% of 900 sites that were measured. (Reuters)

SCIENCE & TECH

Alas, seagrass – Through the resettlement of seagrass meadows on the coasts, large amounts of CO2 from the atmosphere are to be removed in the future to combat climate change. Be aware, however: seagrass meadows can, under certain conditions, release more CO2 than they absorb, as is now shown by a Helmholtz-Zentrum Hereon study published in the scientific journal Science Advances. Whether the recultivation of seagrass meadows makes sense ultimately depends on the location. This surprising insight is enormously important for correctly calculating the actual climate protection potential of seagrass meadows in the future, the report said. “By taking measurements in seagrass meadows off the coast of Florida, we could show that some of these tropical seagrass meadows absorb considerably less carbon dioxide than has long been thought,” said Bryce Van Dam, who conducts his research at the Hereon Institute of Carbon Cycles. “In contrast, on some coasts, they even emit more CO2.” This is because many chemical processes in the plants and in the sediment take place that other experts have so far neglected when calculating CO2 uptake. “It depends on many different processes as to whether seagrass meadows actually help reduce carbon dioxide in the atmosphere. ” (Phys.org)

AND FINALLY…

Music to our ears – The three major labels – Sony Music Entertainment, Universal Music Group and Warner Music Group – plus several independents have signed the Music Climate Pact which will see them pledge “actionable climate targets”. The companies will sign up to one of two existing schemes, Science Based Targets or Race to Zero’s SME Climate Commitment. Both schemes require signatories to reduce GHG emissions to net zero by 2050, and achieve a 50% reduction by 2030. The companies have also pledged to collaborate on measuring emissions in the music industry, to help their artists to speak out on climate issues, and to communicate with artists’ fans about how the music industry impacts on the environment. The move follows UK act Coldplay in October promising a 50% cut for their forthcoming world tour in comparison with their previous one. (Guardian)

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