CP Daily: Tuesday January 25, 2022

Published 04:07 on January 26, 2022  /  Last updated at 04:07 on January 26, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Brazilian energy ministry recommends multisectoral emissions trading scheme

Brazil should adopt a cap-and-trade programme that goes beyond coverage of the power sector and gradually phases out free allowance allocation, the Ministry of Mines and Energy (MME) said in a new consultation.

VOLUNTARY

Investor group extends depth and ambition of member climate goals

An investor group managing a collective $10 trillion in assets has extended its members’ required climate goals by five years to 2030, despite less than half of the firms having finalised their 2025 targets.

Sylvera clinches second raising of $32.6 mln for offset ratings service

London-based Sylvera has raised $32.6 million to accelerate its plans to build an offset ratings service that can assess the market’s entire range of carbon-cutting projects by 2024.

Blockchain carbon marketplace eyes expansion into US after EU funding round oversubscribed

A Spain-based blockchain carbon offsetting platform has raised €7 million through a European funding round, and will now aim to raise almost twice that amount in a second round targeting the US.

INTERNATIONAL

Rebates have little impact on public support for carbon pricing -survey

Households are mostly unaware of how revenues collected through carbon pricing policies are returned to them through direct rebates, and are no more likely to show support for the policy because of these refunds, according to a survey published this week.

Reaching global net zero emissions status by 2050 requires $275 trillion spend, report says

The cumulative spend of a net zero energy transition for the global economy would amount to $275 trillion by 2050, reflecting an annual average cost of just over $9 trillion over the next three decades, a report released on Tuesday has found.

EMEA

EU ETS reform plans risk failure to reach targeted emissions cuts, consultancy warns

The EU risks missing its headline 2030 emissions goals because plans to reform the carbon market may do too little to shift the market’s surplus allowances, a consultancy warned in a study published on Tuesday.

Euro Markets: EUAs rise to 3-wk high as colder weather adds to Ukraine worries

EUAs were the biggest gainer among Europe’s energy markets on Tuesday, wiping out the last two days of losses to reach a near three-week high, while natural gas and power also consolidated gains amid a warmer weather outlook and as tensions remained high over Russian activities on Ukraine’s border.

ASIA PACIFIC

New Zealand carbon ETF reports record returns on rising NZU, ACCU prices

New Zealand’s only exchange traded fund focusing on carbon reported a 2021 return on its net tangible assets of 55% as NZ and Australian carbon prices saw rapid growth throughout the year.

AMERICAS

RFS Market: RINs leap back above $1.00 on reported heavy refiner buying

US biofuel credit (RIN) prices rose nearly 10% on Tuesday which market participants attributed to significant involvement from refiners in the Renewable Fuel Standard (RFS) market.

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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

Transition trillions – Rapidly decarbonising the US economy during the next 50 years could generate $3 trillion, and add nearly 1 mln more jobs by 2070, according to a report from the Deloitte Economics Institute. The Deloitte analysis compares a world in which global warming is left relatively unchecked, with average temperatures increasing to 3C above preindustrial levels, to a scenario in which the Paris temperature targets of limiting warming to well below 2C are met. Should emissions cuts be insufficient to forestall global warming from reaching 3C, the US economy could be hit with a bill of $14.5 trillion (in present value) during the next five decades. Such a loss, Deloitte found, would be equivalent to almost 4% of US GDP in 2070, or about $1.5 trillion. Insufficient action would also cost jobs, with nearly 900,000 jobs disappearing each year due to climate damages through mid-century. In contrast, the cost of moving the country to net zero emissions would be about 0.1% of GDP, or about $35 bln per year through 2050, Deloitte found. (Axios)

Transition trepidation – US climate envoy John Kerry said Monday he backs natural gas as a “transitional” energy source, qualifying his support by emphasising the need for advanced emissions-capturing technology in the sector. But that technology is far from being financially enticing enough to effectively mitigate the climate changing impacts of burning fossil fuels, Kerry said, adding that the world is largely not on the right path to prevent the worst of a warming planet. (Politico)

Design on a nine – California utility Pacific Gas & Electric on Friday proposed nine new battery projects, amounting to 1,600 MW/6,400 MWh, to provide energy and ancillary services in the California Independent System Operator markets, in a broader bid to help shore up the state’s electric grid. The nine projects consist of lithium-ion battery technology, providing four hours of storage. The projects, which are subject to approval by the California Public Utilities Commission (CPUC), would boost the utility’s total battery storage capacity to over 3,330 MW by 2024. PG&E’s proposal is the result of a decision from the CPUC last June, directing California load-serving entities to procure a total of 11.5 GW of new electricity resources between 2023 and 2026. The resources will help the state replace the 2.2 GW Diablo Canyon nuclear plant – slated to retire in the middle of this decade – as well as a suite of natural gas plants. (Utility Dive)

EMEA

Sailing into trouble – Industry body the World Shipping Council has criticised amendments set out by German MEP Peter Liese to the European Commission’s proposals to include shipping in the EU ETS. It said the proposed changed definition of “responsible entity” to a ship operator rather than owner would corrupt the ETS by shielding shipowners from carbon costs while then providing them with access to ETS revenues via the Ocean Fund. It also criticised Liese’s idea to encourage bilateral deals with countries with similar policies as “undermining progress towards global GHG policy at the IMO”. Read Carbon Pulse’s reporting on Liese’s ETS reform ideas.

Pioneer proposals –  Large banks in the EU will have to show how they help or hinder the bloc from meeting climate goals by publishing “pioneering” indicators from 2024, the EU’s banking watchdog European Banking Authority said on Monday with new ESG templates for the top 150 banks to complete each year. From 2023, banks will have to disclose their exposure to carbon intensive activities and assets that may experience climate risks. They will also have to provide details on their exposure to fossil fuel clients, on the GHG emissions they finance, and on alignment with 2050 net zero goals. Final approval will be needed from the EU’s executive, the European Commission. (Reuters)

Energy inefficient – The new German economy and climate minister Robert Habeck has stopped support payments for energy-efficient new residential buildings with immediate effect, arguing a surge in demand for the funding has made the programme unviable. “The enormous flood of applications” has already exceeded the earmarked funding, Habeck’s ministry said. The government has received applications worth €20 bln since Nov. 2021 for a programme launched by the previous administration. The policy had been due to expire at the end of the month. The programme was using outdated climate standards and granted money inefficiently, the government said. (Clean Energy Wire)

ASIA PACIFIC

Labor of love – Federal Australian Labor leader Anthony Albanese has made a pitch for Labor’s “straightforward” climate policies in his first major speech for the 2022 election year, saying that the Morrison federal government had failed to deliver on its rhetoric on climate and energy policy, Renew Economy reports. In an address to the National Press Club, the opposition leader said Labor’s climate policies would deliver the promised reductions in emissions without adopting some of the ‘fine print’ tricks that are a feature of the Morrison government’s climate plan. “It’s a straightforward plan, and it’s one that will work,” Albanese said. “It’s been fully modelled, and we put it all out there. Our plan didn’t have a little provision, a little asterisk, which is in their pamphlet of stuff that they’ve made up, and that doesn’t exist yet.” Albanese referred to the Morrison government’s plan to reach a net zero emissions target by 2050, which relied upon developing future, unspecified technologies for delivering a significant proportion of the required emissions cuts to achieve the target.

Looking ahead – Guangzhou, the capital of China’s Guangdong province, aims to set up a carbon exchange for the Greater Bay area, which spans Guangdong, Hong Kong, and Macao, acting mayor Guo Yonghang said Tuesday, according to Shanghai Securities News. A regional emissions market would fit into the city’s goal of establishing itself as a major hub for green finance. Guo’s ambitions match those of his predecessor, though there is still no timeline for when such an exchange might be built.

AND FINALLY…

Ok Boomers – The new German government’s ambitious climate and construction goals could be held back by a shortage of skilled workers, newspaper Frankfurter Allgemeine Sonntagszeitung reports. Plans laid out by the new coalition government include solar panels to be installed on every roof, wind power to grow to 30 GW, and hundreds of thousands of new flats to be built each year. However, according to the Federal Institute for Vocational Training, an additional 94,000 workers will be needed in the construction sector by 2025, even without the added climate projects. The lack of workers is due to a mixture of factors including an ageing population, a lack of suitable vocational education, and young people’s preference for academic study over skilled trades. Various solutions are being suggested, from increased promotion of vocational careers to better recognition of migrants’ qualifications, while similar developments are being seen in other countries seeking to ramp up decarbonisation efforts. (Clean Energy Wire)

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