Newsletters > CP Daily: Tuesday February 1, 2022

CP Daily: Tuesday February 1, 2022

Published 23:44 on February 1, 2022  /  Last updated at 23:44 on February 1, 2022  /  Newsletters

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

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TOP STORY

Japan starts recruiting companies for voluntary market ahead of pilot launch

Japan on Tuesday began recruiting participants for its voluntary carbon market, which will launch in pilot form later this year and begin its full-scale operation in Apr. 2023.

EMEA

EU power sector emissions currently off track to meet 1.5C warming target

The EU’s electricity sector is not currently on track to limit global warming to 1.5C with emissions falling by less than half the required annual rate since 2019, analysts said on Tuesday, judging that such a trend may persist this year without more intervention from lawmakers.

Euro Markets: Failed auction help EUAs erase early losses, as energy markets slide

EUA prices clawed back early losses in volatile Tuesday trading after the day’s spot auction was cancelled for technical reasons and energy markets weakening amid continued mild temperature forecasts and a sharp uptick in natural gas supplies to Europe.

Seven northern EU nations seek to raise EU’s green jet fuel mandate

A group of seven northern EU countries urged Brussels to allow states to go beyond the minimum obligation for sustainable aviation fuels (SAF), according to a joint letter circulated on Monday, in what looks like an early sign of ambition as member states consider the mammoth “Fit for 55” climate legislative package.

AMERICAS

New ETF to offset emissions of stock portfolio through California, RGGI allowances

A New York-based investment manager is seeking to launch an exchange-traded fund (ETF) that will achieve net zero emissions from its portfolio by purchasing North American carbon permits through a non-profit organisation.

Nova Scotia carbon market emissions dip below cap in 2020, as province sets 2022 auction dates

GHG output under the Nova Scotia cap-and-trade programme fell during the onset of the COVID-19 pandemic in 2020, though emissions from the Canadian province’s electric utility remained far above its free allocation level, according to government data published Tuesday.

Massachusetts GWSA emissions exceed adjusted cap for second straight year

Power sector emissions under the Massachusetts Global Warming Solutions Act (GWSA) cap-and-trade programme came in above the adjusted cap for the second straight year in 2021, even as CO2 output in the fourth quarter continued on a downward trend compared to historic levels.

ASIA PACIFIC

Australia Market Roundup: Woodside, LGI earn major ACCU batches, as Qantas bows out

Woodside Burrup and energy firm LGI received the largest shares of credits in the Clean Energy Regulator’s latest issuance round, while airline Qantas has withdrawn a project after going more than six years without generating any offsets.

INTERNATIONAL

Clubbing together: Unpacking the climate visions of France and Germany

EU policymakers are struggling to reconcile an international climate club and a carbon border adjustment mechanism (CBAM), with both seen as flagship new climate policies respectively endorsed by European heavyweights Germany and France.

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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

Eleventh hour plea – Four countries – the Netherlands, Austria, Sweden, and Denmark – made a last-minute plea for the EU to keep its coveted taxonomy green label off some natural gas projects. They argued there’s a lack of scientific evidence to include gas and asked the bloc’s executive arm to reconsider the plan just a day before it’s expected to be adopted following consultations since the latest draft was released on Dec. 31. The objections are unlikely to derail the Commission’s plan to include some gas and nuclear projects on the list but the latest bout of criticism again puts the bloc’s ambition to set the “gold standard” for environmental finance in doubt. (Bloomberg)

Gas dip – European gas demand is expected to fall by around 4.5% this year to 527 bcm, partly driven by reduced burning of gas in the power sector which could fall by 6% from 2021, the IEA said in its quarterly gas market report. It said gas-fired power generation is expected to decline amid the strong expansion of renewables, while high gas prices continue to weigh on its competitiveness vis-a-vis coal-fired generation. (Reuters)

Carbon bailout – The UK government has reached an agreement with industrial-grade CO2 producer CF Industries to ensure a sustainable supply of the gas used in food, medical, and nuclear sectors. Production has been threatened by high global prices and is a by-product of ETS-covered fertiliser production. A three-month deal allowing facilities to continue operating expired on Monday but the new deal extends into at least spring and comes at no cost to the taxpayer, the BBC reported, without saying where it got the information.

AMERICAS

Well well well – US President Joe Biden’s administration will invest $1.15 bln to plug up thousands of abandoned oil and gas wells across the country, which are still releasing methane, the Washington Post reports. The paper says the money “is the first tranche of allotments from the $4.7 bln that Congress approved for orphaned well cleanup as part of the fall’s bipartisan infrastructure package”. It continues: “That package also included more than $11 bln in funding for abandoned mine reclamation and $1bn for modernising natural gas pipelines, among other measures. The funds will go to the 26 states that submitted notices of intent to the Interior Department late last year. (Carbon Brief)

Pedal to the metals – Meanwhile, the US EPA is moving to restore an Obama-era “federal determination”, which allowed the body to regulate emissions of mercury and other toxic metals from power plants under the Clean Air Act, the Wall Street Journal reports. The paper continues: “In 2020, the Trump administration withdrew that determination, saying that regulators made errors when calculating the costs and benefits of the rules. That revocation led a coal producer to ask the US Court of Appeals for District of Columbia Circuit to eliminate the regulations that Obama-era officials had relied on to regulate air pollutants.” The New York Times notes that the EPA worked to limit mercury emissions from coal plants between 2012-20. (Carbon Brief)

Faeces fight –  California regulator ARB has turned down a petition by environmental groups calling for the board to halt certifications for fuels derived from animal biomethane for the Low Carbon Fuel Standard (LCFS) programme. Phoebe Seaton, who directs the Leadership Counsel for Justice and Accountability, which led the effort, called the LCFS credits for dairy digesters a “manure gold rush” that incentivises factory farm expansion. The groups submitted in October the petition, which includes a request to amend the LCFS regulations to consider excluding digesters. CARB’s argument was that petitions are not a legal mechanism for changing the regulations, which the board adopted through a public rulemaking process. Although the petition was turned down, several board members during the ARB Board meeting last week called for a technical review of the issue, along with a public workshop, and to put a decision before the board this year that would immediately pause permits for digesters as board staff further research the issue. (Agri Pulse)

ASIA PACIFIC

Find new ways – The OECD is warning New Zealand that relying on tree planting and carbon credits to slash emissions may not hold water internationally much longer, according to RNZ. In a new survey on NZ, the OECD said it was not certain what the future international rules for forestry would be, and that carbon markets have lost credibility offshore.

VOLUNTARY

Kenya cashes – The Kenya Forest Service (KFS) has inked a deal with global accounting firm BDO that is due to pay KFS and the East African Wildlife Society (EAWS) $15/tCO2e for its tree planting offsetting activities, BDO said. According to the National Environment and Management Authority (Nema), Kenya has a forest cover of 7.4%, which is 3.6 percentage points short of government goals. KFS and Amazon-based offset project developer 8 Billion Trees have recently launched a carbon offset project in Kenze Hill in Eastern Kenya. (Business Daily)

AND FINALLY…

The kids aren’t alright – Germany’s Federal Constitutional Court has declined to accept 11 constitutional complaints directed against existing state climate action laws and the lack of CO2 reduction paths in some state legislation. The plaintiffs, mainly minors and young adults, claimed that their future freedom is impeded because enormous CO2 reductions would need to be undertaken by their generation if the state legislators don’t take the necessary actions to reduce GHGs now. While this plea worked in an April 2021 decision that saw Germany’s federal climate goals quickly raised, the court said that state legislators are not subject to the same carbon budgets. (Clean Energy Wire)

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