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TOP STORY
ANALYSIS: A potent force – making a market for methane emissions
Methane emissions concentrations in the atmosphere reached all-time highs in 2021 along with most other greenhouse gases, but with limited upstream regulation at oil and gas operations, product labelling and certificate trading are building momentum as an additional way of curbing the potent discharges.
EMEA
German minister plans more domestic emissions curbs as interim goals missed
The German government will unveil a set of emergency policy measures to curb emissions within three months, economy and climate minister Robert Habeck said on Tuesday after flagging that the country has missed its domestic goals for 2021.
Euro Markets: EUAs post modest gains amid weak energy as UKAs drop ahead of first 2022 auction
EUAs shrugged off a weak European energy complex to post moderate gains after a volatile day that saw prices move in a €4.33 range, while UK Allowances dropped more than 4% as the market readied itself for the first auction of the year.
AMERICAS
Virginia AG says Youngkin can’t break RGGI linkage, as Dominion seeks rate request withdrawal
Outgoing Democratic Virginia Attorney General Mark Herring on Tuesday said Republican Governor-elect Glenn Youngkin does not possess the authority to unilaterally take the state out of RGGI, while utility Dominion Energy asked a regulatory agency to withdraw its next request to recover allowance costs amid the uncertain future of the linkage.
RGGI auction volume drops for first sale of 2022
The Northeast and Mid-Atlantic RGGI cap-and-trade programme will make available nearly 21.8 million carbon permits for sale at the Q1 auction, the power sector scheme announced Tuesday, with the sale still including Virginia volume as the incoming GOP governor plans on revoking the state’s linkage.
Washington cap-and-trade programme lays out yearly auction holding limit for speculators
The Washington Department of Ecology (ECY) on Tuesday provided details on its annual auction purchase holding limit for general market participants under its emerging cap-and-trade programme, with the design feature further differentiating the budding programme from the linked California-Quebec markets that proponents intend on joining.
California electricity sector emissions decline in November as gas wanes, imports rise
Power sector CO2 output in the California Independent System Operator (CAISO) region fell in November as fossil gas made up a smaller share of the grid and imports climbed to a 10-month high, according to its GHG report published Tuesday.
ASIA PACIFIC
Vietnam outlines path to domestic, international carbon trading
Vietnam has issued a decree outlining crucial steps towards launching a domestic emissions trading scheme and accompanying offset market later this decade as well as relations to global carbon markets.
NZ Market: NZUs rise to record high amid bullish holiday mood
New Zealand carbon allowances rose to a fresh record on Tuesday, climbing towards this year’s auction cost containment reserve (CCR) trigger level, though volumes were modest with many traders away on summer holiday.
INTERNATIONAL
ICE reports record EUA, CCA volume in 2021, will launch global carbon index futures on Jan. 31
Leading carbon exchange ICE Futures said on Tuesday that it hosted emissions allowance futures trades in 2021 equivalent to more than half the world’s estimated total annual energy-related emissions footprint, as it prepared to launch a global index-based futures contract covering four of the largest carbon markets.
Carbon Pulse increases European, voluntary carbon market coverage with new hire
Carbon Pulse is enhancing its coverage of the European and voluntary carbon markets with another new hire.
VOLUNTARY
Industry experts partner with major exchanges to list voluntary carbon contract that addresses market’s “pain points”
A team of industry veterans has signed agreements with two exchanges to list a new voluntary contract that it says will offer an innovative approach to trading that addresses the market’s “pain points”.
COMMENT
MARC(U) MY WORD: Addressing “crunch issues” in the EU CBAM
Mohammed Chahim MEP’s draft report on the EU’s proposed carbon border adjustment mechanism (CBAM) takes a more aggressive stance and places greater focus on achieving the EU target on climate change, but seems less concerned about impacts on competitiveness of EU industry and the resulting risk of emissions leakage to third countries, argue Andrei Marcu, Michael Mehling, and Aaron Cosbey of think-tank ERCST.
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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
EMEA
Green break – Breakthrough Energy Catalyst published a request for proposals for large-scale deep green tech projects based in Europe. The request will trigger investments in a portfolio of high-potential projects in the areas of clean hydrogen, sustainable aviation fuels, direct air capture, and long-duration energy storage. It marks the first milestone of the EU-Catalyst partnership that the European Commission, European Investment Bank and Breakthrough Energy Catalyst launched at COP26 in Glasgow. The partnership will mobilise $1 bln between 2022-26 to accelerate the deployment and commercialisation of innovative technologies. For more detail, read Carbon Pulse’s article on the project.
ASIA PACIFIC
Decarb deal – Japan and Indonesia have agreed to cooperate on decarbonisation technology such as hydrogen, ammonia, and CCS to transition to clean energy, the Japanese industry ministry said on Monday, Reuters reports. Japanese Industry Minister Koichi Hagiuda and Indonesian Energy Minister Arifin Tasrif signed a memorandum of cooperation (MOC) at a bilateral meeting held in Jakarta on Monday. The MOC is aimed at collaborating in the development and deployment of technologies that contribute to realistic energy transitions such as hydrogen, ammonia as a fuel, CCS, and carbon capture utilisation and storage (CCUS).
Green gambit – Billionaire Gautam Adani’s logistics-to-energy conglomerate has set up a new subsidiary, ANIL, to undertake green hydrogen projects, generation of low-carbon electricity and manufacture of wind turbines, solar modules, and batteries as it looks to become the world’s largest renewable energy company and produce the cheapest hydrogen, Economic Times reports. Adani had in November last year stated that his group will invest $70 bln in the new energy space of the next decade. And now the company has incorporated a wholly-owned subsidiary, Adani New Industries Ltd (ANIL), its flagship Adani Enterprises said in a regulatory filing.
Coalwashing – The Japanese government is to spend ¥27.9 bln ($242 mln) on subsidies for two demonstration projects aiming to burn at least 50% ammonia (produced from hydrogen) with coal at power plants by 2029, Recharge reports. Japan’s largest power generator JERA will invest a further ¥17.3 bln in the ¥45.2 bln emissions-reducing projects. Last year, JERA — a joint venture between electricity suppliers Tokyo Electric Power and Chubu Electric Power — began adding small amounts of ammonia to a 1 GW unit at its 4.1GW Hekinan coal-fired power plant in central Japan as part of a plan to achieve a 20% ammonia co-firing by 2025. Under the new funding, JERA and partner IHI Corp plan to raise this rate to 50% by Mar. 2029.
Pumping the gas – Japan Petroleum Co. (JAPEX) has taken a share in a project building an LNG terminal in Hai Phong in Vietnam, it announced Tuesday. The project is expected to handle 650,000 tonnes of LNG annually, and JAPEX’s involvement comes even after Japan has been criticised for being among the biggest funders of fossil fuel projects abroad in recent years.
AMERICAS
Negate the NPR-A – US President Joe Biden’s administration announced on Monday that it will reverse a Trump-era policy that opened up vast swathes of Arctic Alaska land to new oil development. The Department of the Interior said it will scrap the Trump administration’s decision that authorised expanded leasing and development in the National Petroleum Reserve in Alaska, or NPR-A. Even though Trump took several steps to try to boost oil-and-gas development in Alaska, production in the state fell to a 43-year low in 2020, as drillers focus their attention in Texas and other lower 48 states. (Reuters)
Tesla tries Talon – Tesla has signed its first US nickel supply deal, choosing Talon Metals’ Tamarack mine project in Minnesota due to plans to make the electric vehicle battery metal in a way it considers more environmentally friendly, Reuters reports. The deal, announced on Monday, comes as demand for nickel is expected to jump over the next decade as EVs go mainstream. Nickel bolsters energy storage in a battery’s cathode, which in turn extends an EV’s range.
The Archer and the Wolf – Food processing and commodities trading corporation Archer Daniels Midland said on Tuesday it had signed a letter of intent with Wolf Carbon Solutions to build a pipeline that would capture and transport CO2 produced at ADM’s ethanol facilities at Clinton and Cedar Rapids, Iowa. ADM said the 563-km steel pipeline, capable of transporting 12 MtCO2 per year, would support its decarbonisation goals. The carbon would be stored underground at ADM’s sequestration site in Decatur, Illinois. (Reuters)
SCIENCE & TECH
Carbon negative – A California based company, Origin Materials, said it has entered a strategic partnership with Mitsui to industrialise advanced carbon-negative materials, reports Marketwatch. The company said the partnership looks to rapidly develop and industrialise new sustainable carbon-negative products for the automotive, chemicals, electronics, packaging, textiles, construction, and personal-care industries based on Origin Materials’ patented technology platform. As part of the partnership, Mitsui signed a multiyear capacity reservation agreement to purchase sustainable carbon-negative materials from Origin Materials.
AND FINALLY…
Kim Jong Un-likely climate co-operator – Dozens of North Korean officials gathered in a seminar room in the country’s foreign ministry in Pyongyang last October to hold a training session over Zoom on “green growth”. The session, jointly organised by North Korea’s ministry of land and environment protection and a German foundation with ties to Bavaria’s conservative Christian Social Union, was part of a lecture series designed to educate officials on environmental issues. A serial violator of international law and human rights, North Korea’s reclusive regime typically eschews engagement with the international community in favour of bombast and subversion. But having been devastated in recent decades by a series of extreme weather events, and almost completely dependent on outside money and knowhow, Pyongyang has proved itself willing to engage on a host of environmental issues, including the global fight against climate change. “There is no other area in which North Korea wishes for and pursues international co-operation with such a proactive and open attitude as it does on environmental policy,” said Choi Hyeonjung, director of the Center for Global Governance at the Asan Institute for Policy Studies in Seoul. North Korea is a party to international treaties on environmental protection and global action on climate change, including the Vienna Convention for the Protection of the Ozone Layer, the UNFCCC, the 1997 Kyoto Protocol and the 2015 Paris Agreement. “Climate change is one of the few areas where we can talk to the North Koreans without rancour, or without there being an ideological edge,” a senior western diplomat told the FT. “Of course, there’s a lot of money available for poorer countries, and they are interested in that — but they are also genuinely concerned about the impact that climatic events have had on them.”
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