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TOP STORY
Voluntary carbon market initiative to outline buying guidelines in April
A new global cross-stakeholder initiative aims to set out in April initial guidelines on how companies should use carbon credits as part of credible climate strategies, a senior director told Carbon Pulse.
AMERICAS
Alberta offset prices holding steady, though future increases face murkier outlook
Alberta compliance offset values are expected to stagnate over the next several months as they exceed the 2021 excess emissions charge under the province’s large emitter programme, but the extent of future price increases remains challenging to predict as the energy mix changes and the Canadian federal government pursues an updated carbon pricing benchmark, traders said.
NA Markets: CCA prices decline as participants stay sidelined, RGGI holds despite potential Virginia exit
California Carbon Allowance (CCA) values retraced for the second straight week on what traders attributed to bearish macroeconomic factors and a potential pre-auction lull, while RGGI Allowances (RGAs) stagnated even as new Virginia Governor Glenn Youngkin began the process of trying to remove the state from the power sector scheme.
Biden to carve up US Build Back Better bill in attempt to save climate provisions
US President Joe Biden propelled the likelihood of divvying up the $1.8 trillion Build Back Better (BBB) Act on Wednesday, an avenue that could see its $555 billion in climate and clean energy spending advance ahead of other elements of the troubled social spending package.
EMEA
EU should set price corridor for new ETS to ease poverty concerns -report
The EU should set a steadily increasing price corridor for its new emissions trading system for buildings and road transport to ease concerns about the measure unfairly hitting poorer people, according to an NGO-commissioned report published on Thursday.
Euro Markets: EUAs jump €3.50 after strong auction spurs more buying
EUA prices jumped sharply on Thursday after the day’s auction received the highest number of bids in nearly a year, forcing unsuccessful bidders into the secondary market.
German domestic ETS constitutionally sound, says govt-commissioned legal opinion
Germany’s environment agency has published a legal opinion it commissioned over the constitutionality of the country’s new domestic emissions trading scheme for non-EU ETS sectors, and its compatibility with EU law.
VOLUNTARY
Business group to map credibility of digital climate markets as crypto takes hold
Business group IETA has set up a taskforce to explore and work on guidelines for ensuring integrity in the fast-emerging blockchain-based carbon market, the latest sign that traditional emissions market participants are seeking to work with the crypto space rather than trying to subdue it.
ASIA PACIFIC
Analysts expect regulator to unchain Australian offset contracts
As Australian offset prices rose to yet another record high on Thursday, there are increasing expectations that the Clean Energy Regulator could make fixed delivery deals optional in order to avoid project developers breaking contracts.
INTERNATIONAL
Capping global warming to 1.5C would cause 2% shrink in world GDP by 2050, report says
An accelerated energy transition that aligns with a 1.5C pathway would result in global GDP being shaved by 2% by 2050, according to a report from energy consultants Wood Mackenzie.
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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
This is jeopardy – Airlines with narrow profit margins are in financial jeopardy as carbon prices rise, according to a CAPA-Envest airline sustainability benchmarking report. The top quartile of global airlines could have absorbed a 2019 break-even carbon price of $133/tonne, the study found, while the bottom quartile could only withstand a $19/t charge – marking a differential of over $110/t. “At a $30/tonne cost of carbon, over 50% of airlines analysed would have reported a loss in 2019,” the report concluded.
Hydrogen age – The 2020s will be “crucial” for expanding the global low-carbon hydrogen market, with advances needed in supply, demand, transport, and storage, as well as regulatory frameworks, PwC commodity risk management head Folker Trepte said Jan. 19 at the Chile 2022 Green Hydrogen Summit, S&P Global Platts reports. Trepte said trade in low-carbon and renewable hydrogen would develop in stages over the coming years, from hydrogen “islands” in the short term, where production and consumption are localised, to a series of expanding regional hubs in the medium term before global trade develops over the longer term. A network of storage facilities and surplus hydrogen production would be prerequisites for the development of global trade, he added.
EMEA
Amiens action – France, currently holding the six-month EU Council presidency, wants greater EU sovereignty on energy and environment issues, EURACTIV France reports at the start of a three-day informal closed-door meeting of all EU environment and energy ministers in Amiens. The EU’s proposed battery regulation, carbon border adjustment mechanism (CBAM) and the fight against imported deforestation are due to be discussed. France wants to organise other meetings in March to exchange views with representatives of the UN and the G20 and to meet with Egyptian President Abdel Fattah al-Sissi to prepare for November’s COP27 UN climate talks.
Bill breakdown – Energy bills in the UK are nearly £2.5 bln higher than they would have been if climate policies had not been scrapped over the past decade, Carbon Brief found in an analysis. With UK energy bills set to rise another 50% when the country’s consumer price cap lifts in April, the analysis shows that nearly 90% of the increase over the last year is due to the rising price of gas, whereas climate policy costs have already fallen and are due to drop further.
Snubbing the snub – The UK rejected a politically controversial 2GW power cable to France proposed by Aquind, Bloomberg reports. Business minister Kwasi Kwarteng refused to grant a development consent order, the final stage in the planning process, despite a recommendation from the examining authority that the project be approved, according to a letter published on the National Infrastructure Planning website.
Concrete costs – A forthcoming report by consultancy CemBR has forecast that the European cement industry could potentially face carbon related costs of over €1.5 bln in 2022 if production continues at 2020 levels or earlier. It looks at the performance of the European cement sector and the impact of Phase 4 of the EU ETS, which started in Jan. 2021. Other key findings include that the sector reduced its carbon emissions per tonne of clinker by a 0.4% compound annual growth rate to the end of Phase 3. (Global Cement)
Masdar of puppets – Abu Dhabi renewable energy group Masdar has signed a deal to develop a green hydrogen production plant in the UAE with France’s Engie and Fertiglobe, Reuters reports. In a separate statement, it said it had also agreed with TotalEnergies and Siemens to co-develop a project for sustainable aviation fuel using green hydrogen in Masdar City. In yet another deal, Masdar and a group of partners are considering developing 1.2 GW of solar plants and potentially energy storage capacity in Indonesia and exporting the electricity to Singapore, according to Renewables Now.
AMERICAS
CCS not best – More than 400 Canadian climate scientists and other academics are pleading with Finance Minister Chrystia Freeland to scrap her plan to create a CCS tax credit. Freeland floated the idea of the tax credit in last year’s federal budget and consultations to design it ended just before Christmas. But a letter sent to Freeland Thursday asks her to ditch the idea altogether, calling it a massive subsidy to the oil and gas industry that directly contradicts Canada’s pledge to eliminate such subsidies and reduce GHGs. Freeland has made clear only projects that permanently store the trapped CO2 would be eligible, but the academics want her to go further and limit its use only to industries that have no other options for reducing emissions and not allow fossil fuel, plastic, or petrochemical companies to qualify for it. (Canadian Press)
Coalition cut – Virginia has dropped out of a coalition of states urging the US Supreme Court to find that the EPA has broad authority to regulate power plant emissions. Attorney General Jason Miyares (R), who took office over the weekend after Republicans swept the state in November, tweeted last night that he was “proud to announce Virginia is no longer participating in West Virginia v EPA.” The tweet signaled Miyares’ rejection of his predecessor’s challenge to a lawsuit launched by coal companies and Republican-led states asking the high court to curb EPA’s authority. The conservative Supreme Court last fall made the extraordinary move to take up the case, which focuses on a regulation that does not currently exist. Miyares, a member of Virginia’s General Assembly since 2016, voted against the Virginia Clean Economy Act, a 2020 law that established a mandatory standard for the state’s largest utilities of 100% clean electricity by no later than 2050. (E&E News)
Murphy’s lawsuit – A coalition of New Jersey environmental groups is taking Gov. Phil Murphy’s administration to court over what it contends is a lack of real advances to reduce GHG emissions despite years of promise. EmpowerNJ filed a petition Thursday with an appellate court to force the Department of Environmental Protection to adopt rules that set a 50% targeted reduction in GHGs by 2030 from 2005 levels. The litigation centres around an executive order signed by Murphy in November to speed up GHG reductions by 2030, as well as an update the legislature made in 2019 to the state’s Global Warming Response Act that established a goal for reducing emissions to 80% below 2006 levels by 2050. The group petitioned the DEP last year to speed up the process, which the agency denied last month. The court filing on Thursday is an appeal of that denial. (northjersey.com)
Chow down – Chevron on Thursday announced an agreement with San Francisco-based Brightmark Fund Holdings to fund a large dairy digester in Chowchilla that would produce renewable natural gas (RNG) for fuelling movement of goods across California’s Central Valley. The deal expands the oil major’s RNG portfolio and serves as the latest sign California ag waste will play a big role in California’s rush to renewable energy. Details were not disclosed, including production capacity and employment in construction or operation. But Chevron said it and other existing and pending agreements will bring to the company to about 10,000 mln BTUs of RNG daily production, or a quarter of the company’s 2030 goal. The project is expected to begin operation in 2023. (The Bakersfield Californian)
ASIA PACIFIC
Suiso sails – The Hydrogen Energy Supply Chain, a Japanese-Australian venture producing hydrogen from brown coal, is set to ship its maiden cargo on the world’s first liquid hydrogen carrier from near Melbourne to Kobe on Friday. The Suiso Frontier vessel was built by Japan’s Kawasaki Heavy Industries. If the partners eventually scale the project up to 225,000 tonnes a year, they plan to make carbon-neutral hydrogen by burying CO2 emissions under the seabed offshore Victoria. (Reuters)
Clean energy push – Japan will gradually phase out coal plants over the next two decades while developing new technologies to reduce, capture, and utilise carbon, Environment Minister Tsuyoshi Yamaguchi said Tuesday, ABC News reports. Yamaguchi said in an interview that Japan hopes to lead a zero-emissions push in Asia and is preparing to introduce a carbon tax to meet its commitment to achieve carbon neutrality by 2050, creating stronger incentives to curb emissions.
Coal confession – The Australian NSW state government’s planning department has made a candid admission that significant uncertainty surrounds how to apply the state’s high-level climate targets to individual fossil fuel developments, while recommending that an expansion of an existing coal mine could proceed, Renew Economy reports. NSW planning authorities are currently considering an application from Whitehaven Coal to expand the Narrabri coal mine into a third stage. The expansion would extend the life of the mine – which has the capacity to produce 11 Mt of coal each year – by a further 13 years, until 2044.
Betting on a drop – Macau will cut the carbon intensity of its economy to 55% below 2005 levels by 2025, its Environmental Protection Bureau promised this week. As part of its strategy to meet that target, the Macau government plans to increase the share of electric buses to 90%, from 8% last year. It will also strive to increase the share of newly register passenger vehicles that are electric to 15-20% of the total, from 9.4% in 2020.
VOLUNTARY
Charter choice – Charter operator Tradewind Aviation has launched a new carbon offset programme that will automatically cover all of its flights throughout North America and the Caribbean. The move expands on the company’s initial offset initiative in 2020 that allowed customers to voluntarily offset carbon emissions from their flights, which was calculated at $7 per flight hour. The new system will see Tradewind cover 100% of the cost of the carbon offsets with an automated technology that will apply to every one of its legs regardless of destination, duration, or aircraft type, with all proceeds raised going to Houston-based offsetter TerraPass. (AINonline)
Offsetting the chain – Gnosis Chain, one of the smaller blockchains, has bought 273 carbon credits from forestry projects in Latin America via offsetting service Offsetra, equal to 10 times its annual carbon output, it announced Thursday. Blockchains are subject to a lot of criticism due to the hugely energy-consuming coin mining activities driven by some of the bigger chains. However, there is an increasing number of emerging chains not involved in mining with much lower carbon footprint showing interest in offsetting in a bid to disassociate itself from the bad reputation of its bigger siblings.
AND FINALLY…
Relations rankle – More than 450 scientists have called on the executives of major advertising and public relations firms to drop their fossil fuel clients and stop what the scientists said was their spread of disinformation around climate change. They sent a letter to the executives firms including WPP, Edelman, and IPG. There has been increasing scrutiny of the role that PR and advertising firms play in helping oil and gas companies to play down their role in exacerbating climate change or “greenwashing” with claims the companies offer climate solutions. (Reuters)
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