CP Daily: Monday February 7, 2022

Published 01:37 on February 8, 2022  /  Last updated at 02:10 on February 8, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

ANALYSIS: Trash talk – Adding waste incinerators to the EU carbon market

A senior EU lawmaker has broken with Brussels in wanting to put incinerators in the bloc’s ETS, but the potentially meagre climate benefits involved risk upsetting the delicate trade-offs inherent in cutting waste emissions.

VOLUNTARY

When net zero is not zero: green groups take aim at ‘misleading’ corporate goals

Net zero pledges made by 25 of the world’s largest companies will only cut emissions by less than 20% by their stated target years if taken at face value, according to a study published on Monday by environmental groups that identifies goals filled with loopholes, omissions, and exaggerations.

VCM Report: Nature-based VER prices slip following N-GEO eligibility announcement

Prices for standardised nature-based voluntary emissions reduction (VER) contracts fell for the second straight week last week, as traders said future adjustments to Xpansiv market CBL’s Nature-Based Global Emissions Offset (N-GEO) eligibility led participants to shed credits.

EMEA

EDF again downgrades 2022 nuclear generation outlook on reactor faults

EDF has downgraded its estimate for 2022 nuclear output for the second time this year, as the French utility expects longer outage periods resulting from the discovery of defects at selected generation units.

Euro Markets: EUAs close higher with energy after steady recovery erases early losses

European carbon drifted in moderate trade on Monday morning, as energy markets fell back in anticipation of a meeting between France’s President Macron and Russian President Putin.

AMERICAS

California power emissions rise over 7% in 2021 as state recovers from early pandemic

California electricity sector CO2 output bounced back in 2021 from a significant drop during the first year of the COVID-19 pandemic, with December data showing lower generation from renewables and more from imports.

ASIA PACIFIC

Sumitomo Chemical wins approval for first “climate transition finance” loans

Japan’s Sumitomo Chemical has successfully arranged for two loans that meet the Japanese government’s recently designed guidelines for climate transition finance, the first such loans that have been made available to players in the chemicals sector, the company announced.

INTERNATIONAL

Two Canadian-listed carbon ETFs to launch this month

Canada-based fund managers are launching two separate carbon ETFs this month, they announced Monday.

COMMENT

Why Verra Advocates Long-Term Reversal Monitoring for Nature-Based Carbon Projects

Nature-based carbon projects deliver immediate reductions and reliable removals, but some buyers perceive them as short on permanence. It’s a concern we can now alleviate with new technologies and modifications to the way we manage the VCS buffer pool, said experts at standard board Verra.

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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

CONFERENCE

North American Carbon World (NACW) 2022 – Apr. 6-8 in Anaheim, California – presented by the Climate Action Reserve: Learn, collaborate, and network on carbon markets and climate policy at NACW, North America’s largest carbon event. NACW features comprehensive and up-to-date information, key thought leaders advancing innovative climate solutions, and the best networking opportunities with colleagues in the business, government, nonprofit, and academic sectors. NACW will dive into the status and future of North American carbon markets, climate policies, innovative solutions, natural climate solutions, net zero pledges and beyond, transportation and LCFS markets. www.nacwconference.com

EMEA

Energy diplomacy – Brussels is examining how to shield consumers from a potential worsening energy crisis as part of plans to protect Europe’s households, businesses, and borders from the fallout of a Russian military escalation in Ukraine, the FT reported on Sunday. Diplomats said the EU is discussing contingency measures to deal with surging gas prices, a possible migratory crisis, and cyber security threats if Russia invades Ukraine. The priority of the EU’s emergency planning is to cope with any reduction in gas flows from Russia, which as Europe’s largest supplier accounts for about 40% of imports. As part of this bolstered diplomatic agenda, EU Energy Commissioner Kadri Simson met on Monday with US Secretary of State Antony Blinken, making clear that the EU will need a ramped-up energy supply to make up for the loss of Russian gas. “We have also reached out to our major energy suppliers in order to boost our preparedness and to ensure that energy supply remains reliable, affordable, and secure,” she said. “Not just for us, the European Union, for our neighbours too – Ukraine, Moldova and the Western Balkans.”

Flying ambitions – On Friday, 27 nations and 15 other stakeholders – including the US, UK, Canada, and Morocco – signed the ‘Toulouse Declaration’ along with several aviation organisations and companies after a two-day summit hosted by France.  The signatories called for UN aviation body ICAO to agree a Paris-aligned long-term climate goal at its Assembly later this year, adding to recent pressure to do so. Read Carbon Pulse’s reporting on the investors calling for ICAO to set a 2050 net zero aviation goal.

Ottanta’s plenty – Italy expects the EUA price to average around €80 per tonne this year compared to €69 in the fourth quarter of 2021, a document presented to parliament and seen by Reuters showed. The price, if confirmed, would allow Rome to raise almost €600 mln of additional resources to curb rising energy bills and offer relief to households and businesses. The government has so far budgeted around €2.8 bln of proceeds from carbon permit auctions, part of which will go to cut system-cost levies weighing on firms. But in the document, the Treasury now estimates it can raise €3.36 billion euros this year based on a “reliable and conservative estimate” of €80 for EUA prices. The document said an average price of €89, based on the “historical peak observed last December”, would raise €3.73 bln, while €69 would yield €2.9 bln. In all three scenarios, Rome assumes a sales estimate of 42 mln allowances. The government has allocated some €10 bln since July to cushion sharp rises in energy bills, but ruling parties are urging Prime Minister Mario Draghi to introduce a new extra borrowing package to help families and firms.

Le roi du petrole – France is keen to move to the next generation of cars, but still favour hybrid vehicles over fully electric ones, an EIB survey found. When asked about future car purchases, 61% of French car buyers say they will either purchase a hybrid or electric car. This figure is 22 points higher than the 39% of French people who said they would buy a diesel or petrol vehicle. More specifically, 38% of French respondents would purchase a hybrid vehicle and 23% would opt for an electric vehicle. Purchases of hybrid and electric cars may soon overtake those of petrol or diesel vehicles, the EIB said. In general, 39% of European car buyers tend to favour hybrid vehicles, while 33% prefer petrol or diesel vehicles, and electric vehicles come third with 28% stating they would next purchase an electric car.

Du(bai) the right thing – The Dubai Supreme Council of Energy has approved updated plans to reduce carbon emissions by 30% before the end of 2030, in a move aimed at supporting the UAE’s efforts to achieve the country’s net-zero ambitions by 2050, The National reports. In line with the emirate’s goals to increase the share of clean and renewable energy sources and achieve Dubai net zero carbon emissions by 2050, the council reviewed the plans and road map to implement the strategy using the latest technologies, the Dubai Media Office said in a statement on Sunday.

Waste not, want not – The Suez Canal Economic Zone has granted preliminary approval for a $3 bln waste-to-hydrogen plant by German developer H2-Industries, Cairo Scene reports. To be built at Egypt’s East Port Said, the plant would be able to convert four million tonnes of non-recyclable plastic and organic waste into 300,000 tonnes of green hydrogen per year.

ASIA PACIFIC

Iron and steel guidelines Three Chinese ministries on Monday released guiding opinions on the future development of the national iron and steel industry, banning the sector from adding new capacity this decade due to the existing overcapacity. The sector, however, will be allowed to replace production capacity that shuts down with mergers encouraged to consolidate the industry. The guidelines aimed for the sector to peak its GHG emissions by 2030, despite several media reports in China previously that said that steel will be asked to peak carbon as soon as 2025. A separate document on the industry’s carbon peak roadmap is due to be released soon, which could shed more light on how the sector will move forward. Producers of electrolytic aluminium are expected to soon be brought into the national ETS. Meanwhile, the ministries also sought to increase the share of scrap steel used in production, to 300 Mt by 2025, thought crucial to ease the impact of the EU’s CBAM on China’s steel industry.

Low carb steel – Diversified miner BHP on Monday announced plans to extend its partnership with the Centre for Ironmaking Materials Research (CIMR) at the University of Newcastle in Australia, funding a further A$10 million ($7.1 mln) to support ongoing research into decarbonising steelmaking, Mining Weekly reports. The expanded research programme will focus on low carbon iron and steelmaking using BHP’s iron-ore and metallurgical coal, including conventional blast furnace ironmaking with the addition of hydrogen, and emerging alternative low carbon ironmaking technologies.

Low carb steel (II) – ArcelorMittal, the world’s biggest steel maker is making a play for Sprng Energy, an Indian renewable platform of Actis, a private equity fund manager, as the steelmaker looks at cleaner energy sources to decarbonise production around the world and in India, Economic Times reports. This arguably is the first time in India a steel producer is looking at such large M&A opportunities in green energy.

AMERICAS

Rude and running – MP Pierre Poilievre announced Saturday his intention to bid for leader of Canada’s Conservative Party – the official opposition – a position up for grabs after former leader Erin O’Toole was ousted last week after only 17 months in the role. Poilievre, 42, is currently the Conservatives’ high-profile finance critic, and is well known for his aggressive opposition to the federal carbon pricing programme. Over the years since the CO2 pricing policy’s planned inception in 2018, he has repeatedly claimed that the revenue-neutral ‘backstop’ CO2 levy imposes an unacceptable level of costs on Canadian households, and was recently involved in a heated exchange on the credibility of sustainable finance with former central banker Mark Carney during a parliamentary committee hearing in May. Observers say O’Toole’s ousting was likely to mark the end of Canada’s multi-partisan support for some form of carbon pricing while a Poilievre victory would cement that fate. Poilievre has also thrown his support behind a convoy of truckers and other protesters who have been parked in downtown Ottawa for over one week to oppose vaccine mandates and other pandemic-related measures. His leadership bid announcement listed support for paying lower taxes, raising a family according to one’s own values, and “freedom to make your own health and vaccine choices.” (CBC, Bloomberg News)

Put up your Duke(s) – US Special Climate Envoy John Kerry has nominated one of his senior advisors, Richard (Rick) Duke, as his replacement deputy in place of Jonathan Pershing who resigned from the post last month. Duke will join fellow deputy special envoy on climate change Sue Biniaz to lead US international climate policy in 2022. As Kerry’s advisor, Duke played a lead role in forming last year’s Global Methane Pledge with the EU that aims to reduce the GHG by 30% globally by 2030 from 2020 levels. Duke previously served as a special adviser on climate change to former President Barack Obama and led efforts under the White House’ Office of Energy and Climate Change, including the 2017 Kigali Amendment on HFCs to the Montreal Protocol, the ICAO’s market based CORSIA scheme, and the US mid-century strategy for low-carbon development. (Reuters)

Offsetting the coins – KPMG Canada has purchased an undisclosed amount of Bitcoin and Ethereum crypto coins, its first involvement in crypto assets. Both coin types are associated with high energy consumption and carbon emissions, given their “Proof of Work” protocol in the minting process. To compensate for this, KPMG also purchased carbon credits to make it a net zero carbon transaction, it said, but declined to specify how many offsets it had bought, or which type of credits, type of projects, or location of those projects.

AND FINALLY…

Something else to worry about – More than a decade ago, Thomas Doherty and Susan Clayton published a paper describing the growing issues regarding anxiety about climate change, felt not just by those directly impacted but also those who followed research and news on the crisis. The idea was met with skepticism, the New York Times reports, but has since become widely accepted. “Eco-” or “climate anxiety” is now just another part of youth activists’ lexicon — it’s “a reflection that we’re awake but also that we’re not conditioned to the status quo, that we’re capable of thinking outside of the system,” 22-year-old Clover Hogan told Glamour UK. The concept has also gone mainstream. Last Friday, none other than Good Housekeeping offered tips on how to address “another pot of worry” that’s “moving off the back burner for many of us: anxiety about climate change.” (Climate Nexus)

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