CP Daily: Thursday January 13, 2022

Published 04:22 on January 14, 2022  /  Last updated at 04:22 on January 14, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

California carbon market oversupply suggests intervention necessary to meet 2030 climate target

California’s WCI-linked cap-and-trade programme requires reform to align with the state’s 2030 emissions reduction goal, but the extent of these changes depends on the programme’s intended role in the Golden State’s overall climate policy package that remains unclear, according to an oversight committee draft report.

EMEA

EU industry slams parliamentary proposals for quicker CBAM phase-in

The European cement industry has reacted strongly against calls for EU carbon border measures to more quickly replace the sector’s free allocation of EU ETS allowances, arguing that this would strike a fatal blow against the competitiveness of the bloc’s producers.

Euro Markets: EUA rally sharply with energy amid rising tensions over Ukraine

EUA prices rallied strongly after falling as much as 3.1% in intraday trading as traders reacted to reports that talks in Vienna between NATO and Russia over events in Ukraine have been unsuccessful. Energy prices also rallied strongly on the news.

EDF downgrades 2022 French nuclear output on discovery of new reactor defects

EDF has downgraded its estimate for nuclear output for 2022, the French utility announced late Thursday, as a result of extensions of the outage periods for five of its reactors due to defects.

First wave of EU Innovation Fund projects could save 73 Mt of CO2 emissions

The first seven large-scale projects to receive funding from the EU’s Innovation Fund will prevent 73 million tonnes of CO2 over the next decade, European Commission officials said on Thursday.

EU countries need to increase abatement efforts under ETS to hit bloc’s climate targets, agency warns

EU nations will need to ramp up their efforts in order to achieve the long-term ETS emissions reductions targets set out under the bloc’s new climate package, a European agency warned Thursday.

Slovenia announces 2033 coal phaseout

Slovenia has announced that it will pursue a coal phaseout by 2033 at the latest, as the Balkan nation becomes the 23rd European country to announce an exit strategy.

VOLUNTARY

Peru joins ranks of nations pledging to adjust voluntary credits 

Peru is among the latest countries to join a group of nations that have pledged to apply corresponding adjustments to voluntary carbon market units, potentially forcing changes to how the country’s raft of offset projects can sell their credits.

New blockchain venture launches carbon removal crypto tokens

A new venture with a carbon market veteran involved launched on Wednesday, with plans to tokenise offsets from GHG removal projects and make them tradeable on blockchain.

Xpansiv’s CBL sees near-tripling in carbon trade in 2021

The volume of carbon offsets traded on Xpansiv’s CBL platform nearly tripled in 2021 to outpace the voluntary market’s rapid fundamental growth amid a surge in interest in standardised trade, the company said on Thursday.

SHIPPING

Hartree’s carbon venture forms partnership to offer oil tanker offsetting

Carbon credit provider Vertree has partnered with major oil tanker pooling service Tankers International to offer to compensate the climate impact of voyages with nature-based units.

Maersk brings forward net zero ambition to 2040, sets new interim emissions target

Danish shipping giant Maersk has accelerated its net zero emissions target by a decade to 2040, and has set a more ambitious interim emissions goal to be reached by 2030.

AMERICAS

NA Markets: California carbon plummets towards pre-holiday levels, RGGI allowances sink on lack of drivers

California Carbon Allowance (CCA) prices unravelled this week amid bearish views about the February WCI auction and wider macroeconomic conditions, before the return of compliance buyers helped regain support, while RGGI Allowances (RGAs) came off slightly as liquidity dried up.

Canada has biggest challenge in oil and gas emissions, opportunity in clean electricity -IEA

The implementation of Canada’s ambitious climate and clean energy policies is running up against its position as a major fossil fuel exporter, while the government should better leverage its advantage in clean electricity generation, the IEA said in its review of the country’s energy policy on Thursday.

ASIA PACIFIC

China’s biggest CCS project to start first-phase operations this year

A carbon capture and storage (CCS) project in China’s western Xinjiang region that will become China’s biggest of its kind when it is fully operational plans to launch its first phase this year.

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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

INTERNATIONAL

The price is the prize: A global price on carbon emissions “could spur investment and productivity that would lift the world economy out of its torpor”, according to a senior UK banker, Bloomberg reported. Catherine Mann, who sits on the Bank of England’s monetary policy committee, told a webinar on Jan. 7 that setting a price on emissions in all countries could trigger a boost in productivity that would generate renewed economic prosperity after the pandemic slashed output and growth. “Changing the rate of the relative price of carbon is a game changer for creating incentives,” Mann said, while Bloomberg reported that she had recently called a global GHG price a “holy grail”. “If you change the relative price of carbon, you have to change products, processes, workplace practices,” she said. “You have got to invest in something different in order to change those three, and you’ve got to change consumer behaviour as well.”

Beef blank – One-third of agribusinesses have no policies around reducing deforestation, according to a report by the NGO Global Canopy, which investigated the deforestation policies of 350 companies that most rely on commodities responsible for deforestation and the 150 banks and financial institutions that support them, including pension funds and asset managers. Only one quarter of food manufacturers, retailers, and restaurant chains have pledged to eliminate deforestation from the beef, soy, and palm oil in their supply chains, while only half the agribusiness commodities companies have done so. (Inside Climate News)

EMEA

Dutch pressure – Milieudefensie, the Dutch wing of environmental group Friends of the Earth that won a landmark court victory against Shell last year, is targeting 30 major Netherlands-based corporate emitters including AirFrance KLM, ABN Amro bank, and supermarket chain Ahold Delhaize in a new campaign, Reuters reports. It is demanding that the firms provide plans outlining how they will trim emissions by 45% from 2019 levels by 2030, in line with the Paris climate accord. A failure to do so may result in legal action, it said. While the action will focus on firms with a global carbon footprint, read Carbon Pulse’s latest on how the Dutch government is planning to strike bespoke climate deals with big domestic industrial emitters.

Debt doubts – EU budget commissioner Johannes Hahn is opposed to carving out climate spending from the bloc’s public debt calculations, he said in an interview with the FT. EU debt rules were suspended during the pandemic and are due to be discussed by countries next week, with France and Italy among those supporting revisions to incentivise green spending. Hahn is Austria’s commissioner and reflects the traditional view in frugal northern states such as the Netherlands, the Nordics, and the Baltics.

LoNG delay – A proposed liquefied natural gas terminal in Germany is facing delays as wild price swings spook potential clients already contending with uncertainty about the future of fossil fuel projects in Europe. Hanseatic Energy Hub, the developer of the facility near Hamburg, decided to postpone a crucial step toward a final investment decision, Bloomberg reported. The firm had planned to offer transportation capacity to potential customers this month, but the key procedure has now been delayed until at least the summer.

ASIA PACIFIC

Palau power – Japanese trading house Sojitz Corp said on Wednesday it would conduct a demonstration project to produce green hydrogen in Australia and transport the fuel to Palau for use in small fuel cells as backup power sources and hydrogen fuel vessels, Channel News Asia reports. Sojitz, along with Australian power generator CS Energy and Japan’s Nippon Engineering Consultants, plans to produce hydrogen from solar power in Queensland, Australia, and transport the fuel to the Pacific Island country, with financial backing from Japan’s environment ministry.

Pilbara power  – Australian oil and gas company Woodside has kicked off the new year by firming up plans to develop a massive solar and battery project in Western Australia’s Pilbara region, to supply renewable electricity to local industrial customers, including its own Pluto LNG facility, Renew Economy reports. However, according to the news outlet, the expansion of Pluto LNG will double the facility’s existing direct [Scope 1] and Scope 2 emissions – a fact that largely escaped scrutiny in June of last year when Woodside released its net zero by 2050 plan. According to the solar plant proposal, each 100 MW of installed PV would reduce customer electricity emissions by approximately 100 ktCO2e per year. Woodside’s Pluto facility’s current emissions stand at around 1.8 MtCO2e – before the Scarborough expansion.

China power – Costs for green hydrogen power could fall by as much as three-fourths over the next decade as China cranks up investments for clean energy under its long-term climate-change commitments, South China Morning Post reports. The cost could drop to around $1.40 to $2.30 per kg by 2030 in regions with abundant renewable wind and solar resources such as the Middle East, Australia and the northwestern part of China, according to Shell Hydrogen, versus as high as $6 in recent trades.

AMERICAS

Slurry vision – The Quebec environment ministry on Thursday published a technical document for consultation on a potential new anaerobic digester protocol. The possible new protocol, which has been in the works for years, would encompass regional or on-site biomethaniser, covered slurry pits, and destruction facilities or recovery of biogas. Quebec currently has a covered manure storage facilities offset protocol, but the methodology is limited to projects that capture and destroy methane on-site. Public comments on the consultation are due by Feb. 4.

AND FINALLY…

Boozy cruising altitude – Microsoft is investing $50 mln in a facility in Georgia that will produce jet fuel from ethanol next year, sustainable fuels technology company LanzaJet said. The Chicago-based firm said it has nearly completed on-site engineering at its Freedom Pines Fuels Biorefinery, with plans to start producing 39 mln L of sustainable aviation fuel (SAF) and renewable diesel per year from sustainable ethanol, including from waste-based feedstocks, in 2023. Microsoft created the Climate Innovation Fund in 2020 to invest $1 bln over the next four years to speed up the development of carbon removal technology. The airline industry is considered one of the hardest to decarbonise. Renewable aviation fuel accounted for less than 0.1% of current global jet fuel demand of about 330 Mt in 2019, investment bank Jefferies said last year. (Reuters)

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