CP Daily: Wednesday January 26, 2022

Published 04:36 on January 27, 2022  /  Last updated at 04:37 on January 27, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

POLL: Analysts up EU carbon forecasts again, warning volatility is here to stay

Analysts have raised their EU carbon price forecasts across the board following late last year’s rally, with some warning that competing narratives could drive the market sharply in either direction in the months to come, all while maintaining a high level of volatility.

EMEA

France promises to address EU exporter concerns in upcoming carbon levy talks

EU presidency holder France will pay close attention to the effects the EU’s proposed carbon border adjustment mechanism (CBAM) could have on the bloc’s businesses, a senior official told an event on Wednesday, as lawmakers grappled with how to manage the phaseout of free allowances.

EUA prices set to consolidate in 2022 before resuming upward trend -analysts

European carbon prices will consolidate in 2022 before resuming their upward trajectory in 2023, and will climb even higher than previously predicted in the second half of the decade, according to a bank analyst.

Euro Markets: EUAs climb to new 2022 high as UKAs set record after strong auction

EUAs on Wednesday reached their highest level since setting a record high in early December, as traders continued to amass positions in a lightly-traded market and the latest UK Allowance auction cleared at its highest level to date.

Veteran EU carbon analyst on the move again

A veteran EU energy and carbon expert is joining an Oslo-based renewable energy market intelligence firm to help expand its offering.

ASIA PACIFIC

China power industry eyes peaking of its CO2 emissions in 2028

Carbon emissions from China’s power industry could peak in 2028 with increased investments in nuclear and accelerated growth in renewables, two years sooner than previously planned for, according to the country’s leading power industry association.

FEATURE: Japan, South Korea chase hydrogen supply, but forced to rely on dirtier options in the near term

A liquefied hydrogen carrier will shortly leave Australia to deliver a cargo, the world’s first, to Japan in what has been touted as a new phase for hydrogen’s role in the energy transition, a fuel that key economies in Northeast Asia have also pinned their hopes on to help decarbonise their economies.

Australia Market Roundup: Regulator issues year’s first ACCU batch as spot price remains at record high

The Clean Energy Regulator has made its first Australian Carbon Credit Unit (ACCU) issuance of the year, doling out 220,000 offsets, while the spot price continues to set new records on wafer thin volume.

AMERICAS

Over-crediting leads to biggest international reversal of California compliance offsets to date

California regulator ARB this week approved the single largest intentional reversal of compliance offset issuances in the history of the cap-and-trade regulation, as changing programme guidance for quantifying carbon stocks led an Arizona forestry project to overissue credits.

VOLUNTARY

Business groups look to new agencies to point way forward for voluntary market

Voluntary carbon market participants are counting on newly-formed bodies to give direction following a UN Article 6 emissions trading deal.

Offset marketplace Patch to integrate BeZero Carbon ratings service

Carbon removals marketplace Patch has signed a deal to integrate offset ratings from provider BeZero Carbon onto its platform, seeking to offer more insights on the quality of available units.

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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

Tweaks only – The European Commission will not make any fundamental revisions to its sustainable finance taxonomy delegated act that classifies nuclear power and gas as sustainable, Financial Markets Commissioner Mairead McGuinness told the Frankfurter Allgemeine Zeitung newspaper, despite heated objections from some EU states along the lines of their respective energy policies. (Reuters)

Let’s be sensible – A total of 78 MEPs from fourteen countries have signed a Polish initiative calling on the European Commission to take into consideration regional differences and stop increasing energy poverty when introducing climate policy regulations, ruling Fidesz MEP Andras Gyurk said on Tuesday. Gyurk said in a statement that the initiative published as an open letter was an “important move against the left wing’s increasing attempts of exerting pressure”. “We have demonstrated our strength against left-wing green ideology,” he added. The signatories of the initiative welcomed the EC plan to give green classification to investments in nuclear energy and natural gas, Gyurk said. At the same time they said Brussels was not sufficiently taking into consideration regional differences and failed to act against energy poverty. In order to achieve change, more resources must be made available for projects involving nuclear energy and natural gas because these are required to keep public utility costs low and fulfil climate goals, he said, adding that as a first step, the signatories called on Brussels to improve its proposal concerning the taxonomy regulations. (Hungary Today)

Utility lag – None of the 21 European power companies analysed by climate groups Ember and Europe Beyond Coal were found to have plans aligned with the IEA’s net-zero 2050 roadmap that features a target for advanced economies to close unabated coal plants by 2030 and secure zero-emissions electricity by 2035. Nine have committed to a global coal phase-out by 2030, and all 21 would be operating fossil gas power plants in the EU after 2035. Only Drax and Orsted were judged to be on track to reach net-zero electricity by 2035. (Bloomberg)

Trapped wind – Vestas has warned that current issues in the wind turbine industry would continue for at least the rest of the year as the green energy industry faces challenging times, the FT reports. The Danish wind turbine manufacturer reported an underlying operating profit margin of 3% for 2021 on Wednesday, below its previous forecast of 4% and initial guidance of 6-8%. It said its margin would be 0-4% in 2022 as it released its preliminary results two weeks early. The renewable energy industry has had a difficult 12 months hit by sharp cost increases because of supply chain problems, and low wind speeds that have affected power generation.

Good wood – The UK Government has confirmed plans to pay farmers and other landowners for creating woodlands, in the same week that its post-Brexit environmental watchdog has been granted its full legal powers, Edie reports. The new grant scheme, called the England Woodland Creation Offer, will see farmers and landowners being paid a grant of £10,000 per ha for creating new forests through to 2024. Farmers and landowners will receive a grant of up to £8,500 ha to cover the cost of planting trees, plus an annual maintenance payment of £200 annually for ten years. They may be eligible for more funding if they can prove additional “public benefits” of their woodlands. The scheme will be paid for with £16 mln of funding from the Treasury’s Nature for Climate Fund, which was originally launched in the 2020 Budget with £640 mln of funding and is set to receive an extra £110 mln of funding through to 2025.

AMERICAS

Salty in Balty – A panel of appellate court judges heard arguments on Tuesday in Baltimore’s lawsuit against BP, Chevron, Exxon, Shell, and other Big Oil firms who failed to warn consumers about the dangers of their product and instead undertook a disinformation campaign to deceive the public about climate change being caused by fossil fuels. According to court watchers, the judges appeared sceptical of the oil companies’ argument that the case belongs in federal court, where they believe they’ll receive more favourable treatment; a “circular argument” that “defies logic” Judge Stephanie Thacker said. Industry lawyers also argued firms being held liable for damages from sea level rise would mean an end to offshore oil drilling, which Loyola University law professor Karen Sokol called “a scare tactic.” The lawyers are “telling the courts to back off, we’re a very powerful industry and we’re essential right now to energy security. If you step into this, you’re going to screw everything up,” she told The Guardian. (Climate Nexus)

Opaque emissions – A bill to require big corporations to disclose their carbon footprint needs a vote in the California Senate by the legislative deadline on Monday to survive. SB-260 would require US-based corporations that do business in California and make more than $1 bln a year in revenue to disclose their full GHGs to the state, including those associated with their supply chains. The bill would then require California regulator ARB to produce a report that estimates how much these companies would need to reduce their emissions in order to align with a 1.5C global temperature pathway. (Public News Service)

ASIA PACIFIC

Hydrogen hub – Australian clean energy developer Hexagon Energy Materials has teamed up with solar developer FRV Services Australia to explore the development of hydrogen hubs near Darwin, and at other locations across northern Australia, Renew Economy reports. An MOU signed by the two companies this week confirmed the potential development of a hydrogen hub at Middle Arm, near Darwin, as well as the new potential North Western Australian Hydrogen Hub in Western Australia. The two companies have already collaborated as consortium partners on an AusIndustry grant application in relation to a Middle Arm, and FRV has also secured additional funding for further studies and the construction stage for its hydrogen and renewable energy project.

KNOC carbon commitment – South Korea’s KNOC announced its vision to be a leading carbon neutral company, with expansion of a floating offshore wind power business, establishment of ammonia, and expansion of CCUS, the company announced in a press release.

VOLUNTARY

Cuckoo for KOKO puffs – KOKO Networks, a start-up targeting sub-Saharan Africa’s $47 bln cooking fuel market, is planning to expand its ethanol stove manufacturing capacity 10-fold and then grow globally. The company manufactures its stoves in India and sells them, as well as the fuel they use, in Kenya. KOKO plans to scale up the use of ethanol fuel – in Africa, Southeast Asia and Latin America – as an alternative to charcoal, which can cause respiratory disease. KOKO also sells carbon credits to a subsidiary of Korea Electric Power Corp., South Korea’s coal-burning power utility, and is preparing to expand sales of the instruments to Europe. (Bloomberg)

AND FINALLY…

The Burrito nudge – Simple changes to messages on restaurants’ menus can double the frequency of customers choosing more climate-friendly plant-based options instead of meat, according to US research by think-tank WRI. Several of the messages produced dramatic results. The researchers said it showed Americans were ready for a “nudge” towards vegetarian options, likening such messages to hotels requesting their guests not demand their towels to be replaced every day, as a way to save water needed to wash them. (The Guardian)

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