CP Daily: Wednesday February 2, 2022

Published 02:58 on February 3, 2022  /  Last updated at 02:58 on February 3, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

EU proposes green taxonomy rulebook in face of criticism over gas, nuclear

The European Commission released its long-awaited second delegated act of the Taxonomy Regulation on Wednesday, largely sticking to plans to label some gas and nuclear power plants as green investments despite heavy criticism.

EMEA

Euro Markets: EUAs climb nearly 5% to new record as technical buyers roar back

EUAs jumped by as much as €5.10 to a new record in an active market on Wednesday as technical buying extended Tuesday’s rally, while energy prices made more modest gains as tensions in Ukraine rose.

Industrial decarbonisation stumbling on doubts over EU’s climate resolve

With EU ETS carbon prices surpassing the breakeven point for some climate solutions such as carbon capture utilisation and storage (CCUS), experts say that regulatory certainty on at least two fronts of the bloc’s ‘Fit for 55’ policy package is still needed to accelerate industrial decarbonisation.

Brussels floats idea to support EU exporters under CBAM

The European Commission is exploring a way to support EU exporters from the effects of its carbon border adjustment mechanism (CBAM), the bloc’s parliament heard on Wednesday, a move that could address one of the most contentious elements of the proposal.

EU carbon prices seen around €200 by 2030 thanks to Fit for 55, according to think-tank

EU carbon prices could approach €200 by the end of this decade should the bloc’s ‘Fit for 55’ climate and energy policy package be implemented as proposed, according to a Polish think-tank.

VOLUNTARY

Australian firm unveils massive REDD+ plans in Papua New Guinea

An Australian resources firm has revealed plans to generate hundreds of millions of carbon credits from forestry projects in Papua New Guinea, after being granted forest concessions by PNG authorities.

Brazilian offset firm raises $10 mln for crypto carbon expansion

A Brazil-based company specialising in tokenising carbon credits from forestry projects in the Amazon has raised $10 million from investors to expand its Web3 activities in environmental markets.

AMERICAS

Top California LCFS credit holders sport smallest position in over four years

The largest holders of California Low Carbon Fuel Standard (LCFS) credits continued to slash their holdings through the third quarter of 2021, taking their share of the surplus bank down to at least a four-year low, according to programme data updated this week.

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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

LNG hotbed – Europe remained the top destination for shipments of US LNG in January, Euractiv/Reuters reports. Around two-thirds of US LNG volumes ended up in Europe in Jan., as was also the case in Dec., as sky-high European prices and strong demand drove US LNG exports to a record. In both months, a lack of supply drove shortages in Europe which led to cargoes being re-routed from other destinations. Meanwhile, the crisis over Ukraine has highlighted Europe’s dependency on Russia for much of its natural gas and has spurred buyers to seek supplies elsewhere. US and European leaders pledged on Jan 28. to cooperate on guaranteeing Europe’s and Ukraine’s energy security amid a standoff triggered by Russia amassing troops at Ukraine’s border.

Had enough of experts – The UK’s North Sea Abigail oilfield plan has been approved despite climate targets and expert advice, the Guardian reports. The Abigail oil and gas field off the east coast of Scotland was approved by the government’s Oil and Gas Authority (OGA), defying climate experts who warned at the Glasgow COP26 climate conference in November that no new fossil fuel developments would be compatible with global climate targets. Climate campaigners object to the field, that will be developed by Israeli-owned Ithaca Energy, because its diminutive gas reserves will do little to help secure the UK’s energy supplies while also contributing to carbon emissions.

Carbon credit consulting – The UK government’s advisory Climate Change Committee (CCC) has opened a public consultation into the role of voluntary carbon offsets, culminating in a report to be published later in 2022. The report will consider submissions to help inform an updated view on the role of offsets in decarbonising the UK economy through to 2050. Key themes to be explored include the quality of offsetting activities, business targets & transparency, the role of policy and standards, and GHG inventory considerations. The CCC will aim to identify recommendations for further action and consider how the body can monitor progress over time in the sector. The call for evidence is open until Feb. 28.

R-EV-ing up One in every 11 cars sold in the EU last year was fully electric, as EV sales were boosted by EU CO2 targets for the second year running. Battery electric vehicles had a 9.1% market share, according to ACEA industry data for 2021. That’s up from 1.9% in 2019 – before the current EU CO2 standards kicked in, which pushed carmakers to sell them. But green group T&E said that without ambitious EU standards in 2025 and an interim target in 2027, EV sales would lose momentum in Europe for the rest of the decade as carmakers prioritise the recovery of combustion engine market shares. The market share of plug-ins was 18.0% in 2021, with hybrids making up 8.9%. Their combined sales share has risen sixfold since 2019 in the EU27 thanks to the EU car CO2 standards. The next EU targets for carmakers, in 2025, are so weak they will be realised two years early, T&E analysis shows. EV sales grew faster last year in Central and Eastern Europe (+71%) than in the EU14 (+67%). The diesel market reached a new low at only 20% of car sales in the EU last year and is projected to be overtaken by BEV sales in 2022.

AMERICAS

Out with the new The leader of the official opposition in Canada’s federal government was ousted Wednesday afternoon in a 73-45 vote that saw Erin O’Toole, the Conservative Party leader, out of the job after only 17 months. Conservative MPs voiced concern that O’Toole did not fulfil his promise to be a “True Blue” conservative, noting areas such as balanced budgets, abortion, LGBT ideology, and assault-style firearms, where O’Toole has swung his support further left than the traditional party backing. O’Toole, who had originally promised to scrap the ruling Liberal government’s carbon levy, instead came up with his own version of carbon pricing under his failed bid for prime minister in September’s general election. The ousting is a blow to bipartisan support for carbon pricing in Canada. O’Toole will be replaced by an interim leader later on Wednesday. (CBC)

Midnight train to net zero –  Southern Co.’s Georgia Power utility announced a plan this week to double its renewable energy footprint by 2035 as it maps out a path to close the rest of its coal fleet in that time. Georgia Power plans to shutter 12 coal units, totaling about 3,500 MW, by 2028. It wants to replace that electricity with a combination of renewables as well as 2,356 MW of natural-gas-fired power that it plans to buy from power plants that are already running. The moves, which reflect the electric company’s continued transition to cleaner fuel sources, would help Southern achieve a net zero carbon goal by 2050 for electricity. (E&E News)

ASIA PACIFIC

Step one In Japan, Sumitomo Osaka Cement has introduced an internal carbon price to help it make less carbon-intensive investment decisions and achieve its 2050 net zero target. The company will now apply a carbon cost of 5,000 yen ($43.72) per tonne of CO2 to future investment decisions, even though Japan does not have any mandatory carbon price in place.

SCIENCE & TECH

Breakthrough begets Breakthrough A Massachusetts-based startup that captures CO2 directly from the air has raised $80 mln from investors, including Bill Gates-led Breakthrough Energy Ventures. Founded in 2019, Verdox’s technology is still only operable at lab scale. But CEO Brian Baynes told Bloomberg that a recent breakthrough with the key material used to trap the GHG has given investors confidence to invest such a large sum at an early stage in the startup’s development. Verdox has a different approach to other direct air capture, that it claims to be more efficient and therefore cheaper. The MIT spinoff has developed a special type of plastic that can selectively pull out CO₂ from a mix of gas – in air or exhaust – when charged with electricity. Once trapped, a change in voltage releases the CO₂. The startup said its material could cut the total energy used in direct air capture by 70% or more, but low-carbon electricity would need to power the process. An early version of the material worked well at capturing CO₂ but it also ended up capturing oxygen. Air is composed of 21% oxygen and only 0.04% CO₂. But in the past year, Verdox has landed on a material that Baynes said is 5,000 times more attractive to CO₂ than oxygen. Baynes declined to share any other details about the material.

AND FINALLY…

WWTF Conservation charity WWF is facing a huge backlash after announcing plans to sell non-fungible tokens (NFTs) to raise money for the preservation of 13 endangered species. WWF-UK said it was planning to mint NFTs in the form of digital artwork representing the endangered animals on an “eco-friendly” blockchain and put them up for sale on Thursday. The charity says the sale of these NFTs will help fund its work to stop the climate and nature crisis and help protect “cherished wildlife” such as rhinos, leopards, gorillas, and their habitats. According to Climate Home, WWF-UK believes NFTs and blockchain technology are “here to stay” and that by engaging with the technology “in a responsible way,” it can create a new revenue stream to fund vital conservation work. NFT buyers will be rewarded with “real-world experiences,” including online meetings with leading conservationists, invitations to WWF events, and all-expenses paid trips to see WWF’s work on the ground for those holding Cross River Gorilla and Tapanuli Orangutan NFTs. Those NFTs will be minted on a blockchain called Polygon, a new generation blockchain which uses much less energy than that of Ethereum or Bitcoin. WWF calculated that a single transaction on Polygon has the equivalent carbon emissions of a single glass of tap water. But experts have refuted the claim that this makes Polygon “eco-friendly”. Polygon is a side-chain of the Ethereum blockchain and depends on it to function. Ethereum is planning to move to a more energy efficient security test which would greatly reduce its energy consumption, but the network currently has a carbon footprint the size of Sweden. As a result, followers on Twitter reacted furiously to the news, citing the emissions associated with generating NFTs. They accused the campaign group of harming the environment it claims to protect, with several backers threatening to cancel their donations. In thousands of replies and quote-retweets of the announcement, critics called WWF “utterly irresponsible”, “out of your mind”, and said it “can’t be taken seriously anymore”. One person tweeted “Gonna take the year I worked for WWF off my CV and start telling prospective employers I was in jail.

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