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TOP STORY

FEATURE: Who will win the race to become the Asia-Pacific’s carbon trading hub?

A number of cities are jockeying to position themselves as the main trading hub for the plethora of emerging carbon markets in the Asia-Pacific. We asked a large number of market participants to cast votes on which they think will win.

EMEA

France seeks to broker “early deal” on CBAM to secure EU industry’s trust

France is seeking to strike a early deal among EU countries on the bloc’s proposed carbon border adjustment mechanism (CBAM) under its upcoming six-month term as holder of the EU Council presidency, according to a government official.

Euro Markets: Carbon slumps in volatile trading as gas sinks ahead of EU-bound LNG flotilla

Carbon prices slumped in volatile and very thin trading on Thursday amid a wider sell-off in European energy, as gas and power prices fell sharply amid reports of a flotilla of US LNG cargoes headed across the Atlantic.

Austrian court seeks ECJ guidance in EU carbon trading tax fraud case

An Austrian court wants the EU’s top court to weigh in on a case relating to tax fraud that involved using the bloc’s carbon market.

Batman behind bars: British businessman jailed for over 3 years after confessing to EU ETS tax fraud

A British businessman nicknamed Batman has been jailed by German authorities for more than three years after confessing to his part in using the EU carbon market to commit tax fraud valued at €125 million.

ASIA PACIFIC

CN Markets: CEA price ticks up as compliance rush continues, but muddy outlook for CCERs

Chinese CO2 allowances rose to a fresh four-month high this week as some companies continued buying units to finalise their compliance, while the uncertainties surrounding the future of the domestic offset market drove speculation of possible institutional changes.

South Korean industrial outfit buys Australian renewables developer to boost hydrogen export aim

Ark Energy, an Australian wholly owned subsidiary of Korea Zinc, has acquired a 100% interest in a local wind and solar developer, Epuron, to bolster its aims to build a green energy export corridor from Australia to South Korea, the company announced on Thursday.

Kazakhstan to make big emissions cap cuts -media

Kazakhstan will make significant cuts in the number of free allowances issued in its emissions trading scheme over the next four years, according to a national economy plan for 2022-25.

VOLUNTARY

New Canadian VER investment firm inks African cookstoves deal as part of $100 mln project pipeline

A new Canadian voluntary emissions reduction (VER) investment firm has signed a multi-year agreement to purchase credits from a clean cookstoves project in West Africa, as part of a $100 mln (C$128 mln) offset pipeline it is pursuing in partnership with a global carbon markets consultancy.

Voluntary carbon trader leaving Cargill for Statkraft

A voluntary carbon trader is joining Statkraft’s Amsterdam office after parting ways with commodities merchant Cargill, Carbon Pulse has learned.

AMERICAS

NA Markets: CCAs stomp out losses to climb above $30, RGGI recedes from highs

California Carbon Allowance (CCA) prices fell during the early part of the past week before paring back all of the losses, while RGGI Allowance (RGA) values fell away from all-time highs on lighter activity as the holiday season approached.

INTERNATIONAL

Forest carbon projects are most effective in 50 countries -OECD

Forest carbon project developers should better target their activities to areas that can have the most positive climate impact, according to an OECD report that ranks the best countries for offset projects worldwide.

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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

AMERICAS

Climate common ground? – US Congressional Republicans say there are some areas where they can find common ground with Democrats on climate issues, should the majority party be forced to abandon its go-it-alone reconciliation package that Sen. Joe Manchin obliterated this week, Politico reports. Clean energy tax credits would offer a major boost to many technology-centred climate options with bipartisan support, including carbon capture and advanced nuclear. Domestic manufacturing incentives that wean renewables off of the foreign supply chain as well as forestry measures are also policies with backers on both sides of the aisle. But the areas of agreement are almost certain not to cover the same ground as the $550 bln in climate spending under the reconciliation package, which itself is slated to only barely reach Democrats’ climate targets if accompanied by an all-of-government climate approach. (Politico)

Mono loan – The US Energy Department said Thursday it would back a Nebraska project to convert natural gas into hydrogen, marking the first conditional loan guarantee of its kind under President Joe Biden. With an up to $1.04 bln loan that would be guaranteed by the Energy Department, the commercial-scale venture by Monolith Nebraska LLC aims to supply hydrogen to the agriculture sector. Carbon black also produced at the site would be put to use in tires, plastic production, and other materials. The move represents a revival of the Energy Department’s loan programmes office, which aims to use more than $40 billion in loan authority to accelerate the development and deployment of clean-energy technologies. The conditional loan guarantee is the first of its kind offered under the Biden administration and the first to go to a non-nuclear project since 2016. (Bloomberg)

I’m dreaming of an (E)ITE Christmas – The Washington Department of Ecology this week released its initial list of sectors that will receive ‘no cost’ allowances under its upcoming cap-and-trade programme. The proposed rule establishes criteria to identify emissions-intensive, trade-exposed (EITE) sectors that will be eligible for the free allowance allocation, and also includes consideration of potential EITE industries in relation to overburdened communities. Thirteen industries are classified as EITE, including metals, aerospace, wood, chemical, non-metallic mineral, computer, food, cement, asphalt, and paper manufacturing, as well as petroleum refining. A public hearing on the proposed rule is scheduled for Jan. 25 with the public comment period running until Feb. 1, with the anticipated adoption date scheduled for June 1, 2022.

On the blend – New York will become the largest state to enact a biodiesel blending requirement for heating oil, according to legislation passed in the state on Wednesday night. All heating oil sold for use in any building in New York must contain at least 5% biodiesel by July 1, 2022, 10% by 2025 and 20% biodiesel by 2030. Biodiesel industry advocates estimate that the fuel will cut New York’s annual petroleum diesel consumption by approximately 200 mln gal (757 mln L) per year, cutting the state’s annual carbon emissions by approximately 1 Mt. (Reuters)

ASIA PACIFIC

No funds for fracking – In an early Christmas present for environment groups, Australia’s federal court has voided A$21 mln ($15 mln) in grants provided by the Morrison government to gas drilling projects in the Beetaloo Basin, a shale gas resource basin, ruling the contracts providing the grants were unreasonable and therefore invalid, Renew Economy reports. The orders declared that the federal resource minister Keith Pitt’s decision to enter into three contracts providing a total of $21 mln in grant funding to Imperial Oil and Gas, a subsidiary of ASX-listed Empire Energy, was invalid and that each of the three contracts was declared void.

Can coal construction – India is considering a proposal to halt new coal-based power units as the country works out a plan to meet commitments made at COP26, Economic Times reports. An expert committee tasked by the power ministry to update the national electricity policy has recommended that no new coal-based capacity be considered, said people with knowledge of the matter. Replacement of old coal-based units should only be taken up when it is “convincingly established that it is not viable to meet the projected demand from alternate non-fossil fuel sources”, according to its suggestions, said one of the people aware of the details.

EMEA

Tirana-rama – Albania has become the second Energy Community party nation after North Macedonia to submit a draft National Energy and Climate Plan (NECP) for review, according to the Secretariat of the intergovernmental body. Hydropower dominant Albania’s 2030 targets include GHG emissions savings of 18.7% a final energy consumption reduction of 8.4%, and a renewable energy share in final energy demand of 54.4%. The Secretariat recommended the introduction of an ETS by 2030 – read Carbon Pulse’s latest report on how Albania’s more emissions-intensive neighbours have committed to launch carbon pricing by 2026. (Balkan Green Energy News)

Nuking the nukes – Belgium will shut down all seven of its nuclear reactors by 2025 but will not close the door on new-generation nuclear technology, according to a deal reached Thursday by the coalition government. A government source told AFP the all-night negotiations included an agreement of “investments of around €100 million on small modular reactors”. Progressively phasing out nuclear power has been enshrined in Belgian law since 2003. The final date is 2025, a target the current government committed to meet when it took office in Oct. 2020, but  the issue has divided the governing seven-party coalition of greens, socialists, and Prime Minister Alexander De Croo’s liberals. Some lawmakers argue that Belgium’s current nuclear capacity should be retained as new gas-fired power stations planned to secure energy supplies were too polluting.

Gettin’ hy – Germany will put €900 mln into a funding scheme to support green hydrogen, the economy ministry said on Thursday, as the new government seeks to boost investment in climate protection. The H2Global project is designed to speed up the global market ramp-up of green hydrogen by using a “double auction”. Under the scheme, hydrogen or hydrogen derivatives are bought cheaply on the world market and sold to the EU’s highest bidder. As Germany’s new government seeks to decarbonise Europe’s biggest economy, renewable hydrogen will play a crucial role, said Economy and Climate Protection Minister Robert Habeck. (Reuters)

VOLUNTARY

Going for carbon-neutral gold – The International Olympic Committee (IOC) has mandated that all Olympic Games from 2030 will need to be certified as carbon-neutral or carbon-negative, after confirming that Tokyo 2020 was carbon-negative. The Committee this week published a post-Games sustainability report for Tokyo 2020, revealing that a combination of carbon reduction measures, a ban on domestic spectators, and offsetting through local schemes resulted in a carbon-negative event. According to the report, the Games generated around 1.96 Mt of CO2e. This figure would have been around 2.76 Mt if domestic spectators were able to attend. Meanwhile, the provision of certified excess reduction credits was confirmed by more than 217 businesses, with the total amount of credits available for offsetting the Games’ emissions standing at 4.38 Mt of CO2e. Credits were provided through Tokyo’s cap-and-trade programme, which covers emissions from all large commercial and industrial buildings, and through the linked Saitama Target Emissions Trading System. Building on this progress, the IOC itself has committed to becoming a carbon-negative organisation ahead of the 2024 Olympic Games in Paris. It will work to reduce its own emissions while also funding offsetting, backing nature-based solutions and projects that mitigate emissions, like renewable electricity and clean cooking fuels. The IOC has also committed to halving the carbon footprint of Games and their value chains by 2030 and requiring future Olympic and Paralympic Games Hosts to outline plans for either achieving carbon-neutral events, or going further and achieving carbon negativity. Failure to produce strong commitments and plans, the Committee has stated, may mean cities lose out on host positions for post-2030 games. (edie)

SCIENCE & TECH

A load of bull – Scientists and engineers have pumped 300 litres of simulated whale poo into the ocean off Sydney as part of efforts to snag a share of Elon Musk’s $100 mln prize for capturing and storing carbon. The team, known as WhaleX, has carried out its first open-ocean experiment after gaining clearance from the federal government to carry out a follow-up experiment using up to 2,000 litres of the simulated poo – a mix of nitrogen, phosphorus, and trace elements – before the end of January. (Guardian)

AND FINALLY…

A bad Defence is a bad offense – President Biden signed an executive order earlier this month directing the US government to reach 100% carbon-free electricity by 2030 and net zero emissions by 2050, as well as eliminating climate pollution from federal buildings and vehicles. But the executive order exempts anything related to national security, combat, intelligence, or military training, meaning Biden’s order covers only a fraction of federal emissions. While military leaders insist they share the president’s decarbonisation goal, there is no plan for them to meet it. Since 2001, the military has accounted for 77-80% of federal energy use, according to a 2019 study released by Brown University’s Watson Institute for International and Public Affairs. And it consumes more petroleum than any other institution in the world – more than most countries. The administration estimates the military’s pollution is roughly 56% of federal emissions, but independent estimates suggest it’s much higher. (E&E News)

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