CP Daily: Thursday February 3, 2022

Published 03:31 on February 4, 2022  /  Last updated at 03:31 on February 4, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

Developers craft adjustable forest offset blueprints, seeking to boost trust

Two conservation organisations have teamed up to create a new methodology that they say will help quell some of the criticism related to forest offset projects by establishing dynamic baselines upon which additional carbon outcomes are measured.

EMEA

Euro Markets: EUAs set second consecutive record as traders eye €100 barrier

EUAs extended recent gains on Thursday, reaching a new record just below €95 before consolidating as traders began to eye the €100 mark, and as power and prompt gas prices made late advances amid colder weather and continued tensions between Russia and Ukraine.

Czech, Polish leaders strike deal to end Turow coal mine spat

The leaders of Czechia and Poland agreed on Thursday to end their dispute over the expansion of the Turow coal mine, which put at risk Warsaw’s access to EU clean energy funding.

Utility Vattenfall reports 18% drop in fossil-based output for 2021

Sweden-based utility Vattenfall reported an 18% drop in its ETS-covered thermal generation for 2021, it said in results on Thursday, far outpacing a slight decline in overall output and bucking a wider trend of increased power emissions across the bloc.

EU lawmaker calls for CBAM-like measures for oil and gas imports

An EU lawmaker has called for border safeguards on oil and gas imports to help ensure the bloc’s industry remains competitive as new methane-curbing regulations take effect, a conference heard on Thursday.

Veteran EU emissions trader lands at commodities merchant Louis Dreyfus

A veteran EU emissions trader has joined commodities merchant Louis Dreyfus Company (LDC), teaming up with his former boss to help advance the firm’s new carbon offering.

Pair of carbon traders quit Citibank

Two emissions traders have left Citibank’s London office, including one veteran of the European market, sources told Carbon Pulse this week, continuing the recent trend of moves as interest in carbon markets ramps up around the world.

AMERICAS

NA Markets: CCAs receive boost from EU carbon and options, RGGI ticks up on higher Q4 emissions

California Carbon Allowance (CCA) prices bounced back from a 1.5-month low this week as traders pointed to EU carbon prices and options activity as drivers, while RGGI Allowance (RGA) values inched higher after the release of Q4 emissions data that some traders found bullish.

Carbon specialist leaves investment firm PIMCO for CCA-focused asset manager

The lead strategist of Pacific Investment Management Company’s (PIMCO) commodity and carbon business has joined a new US environmental asset management firm that will initially focus on California Carbon Allowances (CCAs) before exploring other markets.

ASIA PACIFIC

NZ Market: Relentless bullish sentiment pushes NZUs to fresh high

New Zealand carbon allowances hit record highs for the 14th time this year in Thursday trade, as sentiment remains bullish, propped up by recent comments from the government on future allocation.

Fortescue invests in Australian firm to develop emerging green hydrogen technology

Fortescue Future Industries (FFI) has acquired an interest in an Australian company that is researching technology to produce green hydrogen with the use of sunlight and water, the green energy subsidiary of iron ore mining giant Fortescue Metals Group, has announced.

VOLUNTARY

Start-up to launch trading platform for tokenised carbon credits

A new blockchain venture will launch an exchange for tokenised carbon offsets in a bid to focus liquidity in the emerging market, while also offering project developers a route to bring their units into the crypto space.

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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

ASIA PACIFIC

Deleted The International Monetary Fund deleted a sentence from a staff mission statement on the Japanese economy that was critical of Japan’s continued financing of high-emissions coal projects, as a copy of an earlier draft shows, Reuters reports. The IMF issued the report on Jan. 28 at the conclusion of a routine country surveillance mission to Tokyo to review Japan’s economic policies, but the final version omitted a sentence that encouraged Japan to phase out commitments to support coal that had been in the draft just two days prior.

Digging in Australia on Thursday released application guidelines for companies eager to get a share of a A$40 mln funding package available for efforts that increase carbon sequestration in soil. The National Soil Carbon Innovation Challenge would boost related efforts and technology with the aim of helping to reduce hundreds of million of tonnes of CO2e over the coming decades. Soil carbon is making up a large share of newly registered offset projects in Australia, but few credits have been issued to those programmes so far.

Clean deal – Mitsui has closed an investment deal with EKONA Power, which works on a methane pyrolysis process for making clean hydrogen from natural gas, H2 Bulletin reports. The EKONA methane pyrolysis process will enable the production of hydrogen and solid carbon from methane under high temperatures. This technology will lower CO2 emissions in the production process while curbing the production cost to the same level as other conventional hydrogen production technologies, such as steam methane reforming. Most carbon would be generated in solid form, eliminating the need for CCS.

China hydrogen – The world’s largest green hydrogen project, with a 150MW alkaline electrolyser, has been fully switched on in northwest China, powered by a 200MW solar array, Recharge reports. Ningxia Baofeng Energy Group, a coal-based chemicals manufacturer, actually completed the project in the autonomous region of Ningxia, central China, shortly before Christmas last year, but seems to have kept the news quiet.

Missed opportunity – India’s 2022 budget shows the government has missed a pressing opportunity to accelerate the energy transition, the think tank Institute for Energy Economics and Financial Analysis (IEEFA) writes. Finance Minister Nirmala Sitharaman’s budget speech delivered on Feb.1 referred to energy transition and climate action as two of the key priority areas of the budget. Despite this, the budget lacked support for some of the key areas of the transition. “The budget appears to have fallen short of promoting clean energy in an accelerated manner,” says IEEFA’s India lead, energy economist Vibhuti Garg.

AMERICAS

Three on a match – Nova Scotia is considering three options for its post-2022 carbon pricing mechanism, following the Canadian federal government’s updated benchmark as a guide. The province last year said it would evaluate its options for carbon pricing after this year, with the Maritime jurisdiction currently operating an independent cap-and-trade system. In addition to this option, the province is also considering either an economy-wide carbon tax or a hybrid model of a CO2 levy on fossil fuels and output-based pricing system (OBPS) for large emitters, modelled on the federal ‘backstop’ system. Nova Scotia’s Progressive Conservative government has two months to finalise its plan and submit the information to Ottawa. (CBC)

Mailbox arson – The White House and EPA both called on the US Postal Service to reconsider its decision to purchase gasoline powered vehicles for its new fleet on Wednesday. The USPS plan to spend $11.3 bln on as many as 165,000 new delivery vehicles over the next decade (just 10% of which would be electric) threatens to undermine President Joe Biden’s directive to electrify the federal fleet and is, according to EPA’s sharply worded letter, “underestimates greenhouse gas emissions, fails to consider more environmentally protective feasible alternatives and inadequately considers impacts on communities with environmental justice concerns.” White House CEQ chair Brenda Mallory also expressed “grave concerns” about the plans and warned Postmaster General Louis DeJoy, a Trump appointee and ally, the USPS could face legal challenges if its decisions are not “grounded on sound legal footing.” (Climate Nexus)

Solar shut out – Grid operator PJM Interconnection is so clogged with requests from energy developers seeking connections to its regional transmission network in the eastern US that it is proposing a two-year pause on reviewing more than 1,200 energy projects, most of them solar power, and new projects may have to wait even longer. The situation can be explained in part by the rapid increase in the economic competitiveness of solar power as state energy policies and corporate sustainability plans drive a booming renewable energy industry. But the logjam threatens to put some solar developers in a financial bind and is raising questions about the feasibility of the Biden administration’s goal of having a carbon-free electricity grid in just 13 years. (Inside Climate News)

Send transmission from the one-armed scissor – The California Independent System Operator (CAISO) on Monday issued a 20-year draft transmission outlook plan for the first time, detailing the long-term infrastructure required to achieve clean energy goals in the grid operator’s footprint. The draft outlook, developed along with the California Public Utilities Commission and California Energy Commission, assumes that the state will need to add around 120 GW of new resources – including utility-scale solar, energy storage, offshore wind, energy storage, and out-of-state clean energy – to the system by 2040, in order to meet the rising demand for electricity. California is aiming to supply 100% of its electric retail sales with renewable and zero-carbon resources by 2045. (Utility Dive)

EMEA

Sunny loan – The European Investment Bank (EIB) has signed an agreement under which it will grant unitranche loans for solar and onshore wind projects in Spain and Portugal from 2021 to 2024, it said in a press release. These projects will not need power purchase agreements (PPAs) to receive unitranche loans. The EIB will act as the lead lender to an investment fund, which will in turn lend the funds as bridging loans to final beneficiaries as senior debt. The project is expected to generate about 430 MW of new renewable energy and contribute to the national renewable energy targets set out in the national energy and climate plans of Spain and Portugal.

Partial support –  The UK’s finance minister Rishi Sunak has unveiled a support plan to provide £350 per household to help limit the impact of a looming rise to energy bills, which comes as people already face higher prices and rising taxes. Amid the massive rise in wholesale gas prices, UK energy regulator Ofgem was obliged to announce a rise in the cap that limits what companies can charge consumers from April. The higher cap means a typical household will pay £1,971 a year from April, 54% more than they pay now, with a further rise expected in October due to soaring gas and power prices. (BBC)

AND FINALLY…

Grab a brush and put a little makeup – After a year hiatus, US Sen. Sheldon Whitehouse resumed his “Time to Wake Up” addresses on climate change Wednesday, prompted by Democrats’ failure to advance their Build Back Better Act. Whitehouse focused much of his ire on fossil fuel groups for “climate delay,” corporate America for being “totally, utterly, completely MIA” on climate policy, and Republican lawmakers for “doing their bidding.” But he was notably careful not to name or blame Sen. Joe Manchin who tanked BBB last year. Like other Democrats, Whitehouse expressed confidence that Manchin would cut a deal on a smaller spending bill focused on clean energy tax credits, along with a methane fee with subsidies to help operators crack down on leaks. In his speech, Whitehouse continued to push his preferred climate policy as a carbon price paired with a border carbon adjustment. But in the interview, he seemed to acknowledge his efforts to pass those as part of Democrats’ reconciliation package won’t be successful. (Politico)

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