CP Daily: Monday January 24, 2022

Published 02:31 on January 25, 2022  /  Last updated at 02:31 on January 25, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

VCM Report: Nature-based VER prices set new records as trading firms pile in

Nature-based voluntary emissions reduction (VER) contracts soared to new peaks last week on heavy volume as market participants said commodity trading houses and funds were joining fossil fuel companies in snapping up both standardised and project-specific units.

EMEA

ANALYSIS: A delicate balance – EU carbon pricing during an escalating gas crisis

European governments are under increasing pressure to protect households from sky-high heating and power prices under the unfolding region’s gas crisis, but the resulting relief programmes have the potential to dampen carbon pricing signals and put the bloc’s climate targets at risk.

Euro Markets: EUAs give up early gains as equities tumble amid growing Ukraine concerns

EUAs fell back from a two-week high on Monday as prospects of a Russian attack on Ukraine dragged riskier assets lower on both sides of the Atlantic.

EU’s advisers call for substantial revision of taxonomy rulebook

A group of 57 green finance experts advising the EU has slammed European Commission plans to label gas and nuclear power investments as sustainable, strongly opposing what it saw as loose emissions curbs for gas projects.

Finland should focus on EU-wide transport emissions trading system rather then design its own -working group

Finland should give priority to helping develop an EU-wide emissions trading scheme that covers road transport rather than design its own domestic system, a Finnish cross-ministerial committee has opined.

VOLUNTARY

Developer in talks with 20 nations on adjusted voluntary credit deals

A European carbon project developer is in discussions with 20 host governments to secure correspondingly adjusted carbon credits for the voluntary market, amid building corporate demand.

ASIA PACIFIC

Indonesian forestry agreement made only paltry contribution to climate targets, study says

An emissions reduction scheme to curtail deforestation in Indonesia resulted in the prevention of around 70 MtCO2e over 2011-18 from being released into the atmosphere, but this amounted to just 3% of the total required by Indonesia’s NDC, a study has found.

AMERICAS

California gasoline usage ticks up in October, as diesel hits 6-year low

California gasoline consumption rose in October but still stayed beneath pre-pandemic levels, as diesel usage fell significantly from a decade-high watermark the month prior, according to state data published Friday.

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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

Out to sea – Global shipping’s CO2 emissions posted year-on-year gains of 4.9% in 2021 to 833 mln tonnes, and were higher than 2019, according to Simpson Spence & Young. The rise represents “an inconvenient truth” for the International Maritime Organization, the shipbroker said in its annual industry outlook. The IMO has agreed to cut ships’ carbon intensity by 40% by 2030 amid intense criticism for failing to agree on further curbs that will meet international climate-change objectives. The gains came despite what SSY said was an intensifying regulatory landscape for global shipping with looming limits on vessels’ energy and carbon intensity from 2023 and EU-based measures to include shipping in emissions trading encourage the use of zero-carbon marine fuels. Longer tonne-mile trades, higher sailing speeds for some vessel types, and increased port congestion pushed emissions higher, the shipbroker said, citing data from Sweden-based MarineBenchmark.com. Emissions increased most for the gas carrier fleet, followed by containership and bulk carrier emissions, with the global tanker fleet also lifting CO2 output as global oil demand recovered towards the end of the year, SSY said. (Lloyd’s List)

EMEA

Not gonna fly – An alliance of airlines and airports has called for changes to the EU’s planned climate change legislation, arguing it will make them less competitive with non-European rivals. Taking aim at aviation, a sector deemed responsible for up to 3% of global emissions, the EU has proposed stricter rules on CO2 emissions and the use of synthetic fuel blends, as well as the implementation of a kerosene tax. The alliance, whose nearly 20 members include all Lufthansa subsidiaries, Air France-KLM, and major airports such as Frankfurt and Amsterdam’s Schipol, argues long-haul flights via non-European hubs would not be subjected to the same associated costs. The alliance rejects a kerosene tax outright and proposes that the environmental protection surcharge be based on the entire flight route, not just feeder flights bringing passengers from the EU to international hubs such as Istanbul or Dubai. In principle, the alliance is however in favour of the EU’s ‘Fit for 55’ climate package. (Reuters)

It’s not you, it’s methane – Investors plan to build an import terminal on Germany’s North Sea coast for synthetic methane from the Middle East, reports Clean Energy Wire from an original story in newspaper Die Welt. The company Tree Energy Solutions (TES), which is backed by Belgian financial group Atlasinvest, initially plans to invest €2.5 bln ($2.8 bln) in the project to import 25 TWh of methane in 2027. This could then be used to make 500,000 tonnes of hydrogen, roughly equivalent to Germany’s entire 2030 target for domestic hydrogen production. Green hydrogen made with solar power will be transformed into synthetic methane, a substitute for natural gas, by adding CO2 in the Middle East for transportation. The CO2 will then be separated in Germany and transported back to the Middle East for re-use in methanisation, according to the plans. After yearly extensions, the terminal could supply 250 TWh of climate neutral gas in 2045, equivalent to around 10% of Germany’s entire final energy consumption.

ASIA PACIFIC

Sticking to it – China’s State Council (Cabinet) on Monday released the 2021-25 five-year plan on energy savings and emissions reductions, but the detailed plan did not include any major targets or policies that hadn’t already been announced. It reiterated the goal of cutting the energy intensity of the economy 13.5% over the period, as well as reducing capacity in energy intensive sectors such as steel, aluminium, cement, glass, and oil refining by 30% in order to meet that goal. Those sectors struggle with overcapacity that the government has been working to reduce for years.

Fortescue strikes again – Fortescue Future Industries has made its first major push into battery storage and high performance with the A$310 mln ($221 mln) purchase of Williams Advanced Engineering (WAE), the offshoot of the Formula 1 specialists Williams Grand Prix Engineering, Renew Economy reports. The purchase of WAE appears designed to help Fortescue develop advanced battery storage systems and electrify heavy “off-highway” transport, but it also offers opportunities for on-road electric transport and other battery storage applications. It’s the latest – and one of the most tangible – of a string of announcements from Fortescue Metals and its Fortescue Future Industries subsidiary in recent months that have been mostly focused on green hydrogen, solar energy, and electrification technologies and projects.

The future is algae – Oil refiner Eneos Holdings and Honda are among a group of more than 35 Japanese companies and institutions that have banded together to try to tap the potential of microalgae to help replace fossil fuels and to provide an array of food and consumer products, Japan Times reports. Under an initiative called Matsuri (Microalgae Towards Sustainable & Resilient Industry), the group is hoping to create enough demand for the phytoplankton to make a large-scale algae farm viable in Malaysia. The growing facility would be built by Singapore-headquartered Chitose Bio Evolution, which is constructing a five ha trial farm on the Malaysian part of Borneo Island, with financial support from Japan’s New Energy and Industrial Technology Development Organization.

AMERICAS

Revocation response – Two legal actions were filed last year against the Ontario government’s 2018 cancellation of its WCI-linked cap-and-trade programme, The Narwhal reports. Consultancy SMV Energy Solutions is leading a class action lawsuit of businesses trying to recoup lost investments and contractual obligations, which could become the second time stakeholders have challenged the constitutionality of Premier Doug Ford government’s decision to cancel the programme. This lawsuit was filed in Feb. 2021 at the Ontario Superior Court of Justice. In a separate suit, the global giant Koch Industries is seeking $30 mln (C$37.9 mln) to recoup its own lost investments. In April, Koch filed a legacy claim against Canada under the North American Free Trade Agreement; though the United States-Mexico-Canada-Agreement superseded the older agreement in 2020, the allowances were purchased while NAFTA was still in place.  Losing either suit could make one of Ford’s most high profile 2018 election campaign promises – that cancelling the programme, which his party mischaracterised as a carbon tax, would save Ontarians money – an expensive falsehood.

Tundra tonnes – The North Dakota Industrial Commission has approved a carbon storage facility for Minnkota Power Cooperative’s Project Tundra. Dubbed the “world’s largest carbon capture facility,” the $1 bln project was made possible by an investment from the Milton R. Young Power Station in Oliver County, according to a news release from the commission. The station will capture 90% of its CO2, which amounts to 4 Mt annually, according to the commission. (Center Square)

AND FINALLY…

Everybody hates a leak – Around 30 oil and gas facilities across the Permian Basin in Texas and New Mexico spewed large amounts of methane for three years, emitting the equivalent climate pollution from half a mln cars, according to a report released on Monday. The facilities, which include well pads, pipelines, compressor stations, and processing facilities, were observed as “persistently” emitting large volumes of methane over the three years of aerial surveys done by the Environmental Defense Fund and research group Carbon Mapper. These so-called “superemitters,” located in the most productive US oil field, only account for .001% of the Permian Basin’s oil and gas infrastructure but emit around 100,000 tonnes of methane per year. This means that repairing those leaks offers companies an immediate opportunity to help achieve US and international methane reduction targets and save around $26 mln in escaped natural gas, the report said. (Reuters)

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