CP Daily: Tuesday February 8, 2022

Published 00:40 on February 9, 2022  /  Last updated at 00:40 on February 9, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

China seen backtracking on emissions target for steel producers

China’s announcement this week that its steel sector will peak its carbon emissions by 2030, and not 2025 as previously reported, is a major setback and indicates a lack of ambition, according to observers.

INTERNATIONAL

BP sets higher-ambition emissions targets, boosts low carbon capex share

Oil major BP has upgraded its climate targets for 2030 and 2050 and pledged a larger slice of capex for its “transition growth” businesses as the company announced on Tuesday bumper profits of $12.8 billion for 2021, its highest level in eight years due to the surge in oil and gas prices.

Researchers open up modelling used to help investors assess corporate climate plans

An investor-led group unveiled on Wednesday the methodology behind its set of benchmarks widely used by financiers to assess whether corporate climate pledges align with Paris Agreement goals.

VOLUNTARY

Crypto group opts for 10-year rolling eligibility under new nature-based token

Blockchain infrastructure provider Toucan Protocol has released the criteria for offsets to qualify for its soon-to-be-launched Nature-based Carbon Token (NCT), with up to 95% of nature-based Verra credits set to be eligible.

CME Group to launch CBL Core GEO futures contract in March

US-headquartered bourse CME Group on Tuesday announced it will inaugurate a futures contract for CBL’s Core Global Emissions Offset (C-GEO) next month, adding the standardised renewables and tech-based offering to its growing suite of carbon credit products.

Oil company signs deal with Shell to offset emissions from Brazilian oil fields

An Australia-headquartered company has signed a long-term, fixed price offset deal with Shell to cover the majority of carbon emissions from two of its oil fields off the shore of Brazil.

EMEA

Euro Markets: Late sell-off unwinds carbon’s gains after early record

European carbon prices reached their third record high in the last five sessions on Tuesday on news that French utility EDF had downgraded its 2022 nuclear generation estimates, putting more pressure on fossil generation to pick up the shortfall.

SSE reports 14% fall in fossil generation and increase in 2030 climate ambition

British utility SSE reported 14% year-on-year drop in ETS-covered gas-fired power generation for the final nine months of 2021, it said in quarterly results on Tuesday, while renewables output fell by almost a fifth as unfavourable market conditions and low summer winds hampered production.

ASIA PACIFIC

NZ Market: NZUs extend record high again with all eyes on auction

New Zealand carbon allowances rose to record high levels again on Tuesday, as buyers keep lifting available offers ahead of what is expected to be a highly competitive quarterly auction next month.

Australia’s Santos books 100 MtCO2 CCS capacity after merger

Australian oil and gas company Santos has “booked” 100 million tonnes worth of CO2 storage capacity in South Australia’s Cooper Basin, in a move the company claimed on Tuesday is the first such action taken by an operator that complies with established global industry guidelines for CO2 storage management and resource assessments.

AMERICAS

LCFS Market: California prices come off following utility sale announcements, Q3 data

California Low Carbon Fuel Standard (LCFS) prices fell off this week after two utilities announced credit solicitations and traders continued to digest the impact of bearish programme data from the third quarter of 2021.

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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

Anti-taxonomy coalition shapes up – EU environment ministers from Austria and Luxembourg, along with three MEPs from across the political spectrum, held a press conference late Tuesday at which they vowed to fight towards building enough support to block the EU’s taxonomy rulebook that counts some gas and nuclear as sustainable investments. The lawmakers have an uphill task, having just four months to build a majority of either the Council of member states or the European Parliament to overturn the delegated act published on Feb. 2 (read Carbon Pulse’s report). Luxembourg Environment Minister Carole Dieschbourg said a lawsuit was not yet filed, “nor it will occur tomorrow,” saying that the first step is to build enough consensus to stop the act via the legislative process. The webstreamed event, organised by NGO Europe Calling, was attended by over 2,000 people, the organisers said. Separately, Germany’s Vice-Chancellor Robert Habeck said on Monday that Berlin would examine the contentious proposal before considering a potential lawsuit.

Risky business – European banks are concerned that their top regulator will use its upcoming climate stress test to raise the bar for capital. The mass of data banks must soon submit to the European Central Bank could be used to justify higher capital requirements as soon as next year, lobbyists representing the industry told Bloomberg. Efforts to get clarity from the ECB have been met with a degree of evasiveness, which adds to the level of anxiety, the people said, asking not to be identified discussing private talks. In its public statements, the ECB has made clear that the tests are a chance for the banks and the regulator to learn about how vulnerable they are to extreme weather and to tougher climate-related laws. Individual test results won’t be made public, and the ECB has sought to reassure the industry that it will take a nuanced approach to drawing any conclusions for capital. But it has also made clear that climate change will ultimately be treated like any other risk.

Bad bank, bad bank, whatcha gonna do – RWE is backing a coal-exit plan that would see the German energy giant transfer some of its lignite assets and liabilities to a government-led firm, people familiar with the matter told Bloomberg. Hiving off some assets and the burden of cleaning up open-cast mines after they shut could facilitate an agreement to speed up the coal phaseout in Germany, said the people, who asked not to be named because the information is private. The model, if agreed on, follows the blueprint of the nuclear exit, where a state-run fund was set up to handle the disposal of atomic waste. Germany’s new coalition wants to phase out coal by 2030, but bringing plans forward by eight years would require a new round of negotiations. Deliberations are in early stages, but mark a step forward for RWE, which has shied away from making statements on offloading lignite assets. RWE said talks with the government haven’t started, but added it supported an early coal exit.

Carbon removals – The European Commission has opened a public consultation into carbon removals regulation, inviting stakeholders to submit proposals for rules “to monitor, report and verify the authenticity” of removals. The aim of the consultation is to expand sustainable carbon removals and encourage the use of innovative solutions to capture, recycle, and store CO2 by farmers, foresters, and industries. This represents a necessary and significant step towards integrating carbon removals into EU climate policies, the Commission said. A wide range of potential stakeholders on both the supply and demand side, as well as regulators, are invited to submit feedback. The consultation is open until May 2. Read Carbon Pulse’s latest reporting on EU carbon removals policy.

Dublin does – Ireland will seek to retrofit one-third of the country’s housing stock by 2030 as a key part of the government’s plans to cut emissions. Some €8 bln has been set aside to fund up to 50% of the cost of installing insulation and heat pumps, up from 30-35% currently. More than half of the funding – €202 mln this year – will come from revenues from its annually-rising carbon tax on fossil fuels mainly used in transport and heating sectors. The government aims to use part of its EU COVID-19 recovery funding to launch a loan guarantee scheme to help cover the remaining costs. Read Carbon Pulse’s report on Ireland’s climate plan.

Poultry excuse – British farmers must reduce their production of meat and dairy by one third in the next 10 years if scientific advice on limiting GHG emissions is to be met, a report from the conservation charity WWF said. Even greater cuts may be needed to the UK’s pig herds and poultry flocks, because of the imported feed they eat. Overall, people will need to eat much less meat than they do today, the charity warned. But the result would be lower emissions, a countryside with more wildlife and flourishing nature, and better health, according to the report. Farmers defended British livestock production as lower carbon than overseas alternatives. Stuart Roberts of the UK National Farmers’ Union said that “more than 90% of UK households still want to buy high quality red meat and dairy and British products are often the most sustainable options.” (Guardian)

More like ME-NO Climate Week – The first ever Middle East and North Africa Climate Week (MENACW 2022) conference has been postponed due to concerns around COVID-19. The UN-backed event was originally due to take place between Feb. 28 and Mar. 3 in Dubai, but the recent surge in cases of the Omicron variant forced officials to delay the event. New dates will be announced soon, according to a press release. MENACW 2022 will host discussions around building resilience against climate risks, the transition to a low-emission economy, and collaboration to solve pressing climate challenges. Public, private, and non-profit sectors are all invited to attend. The event is part of a regional series scheduled to take place in 2022, with meetings in Latin America and the Caribbean, Asia-Pacific, and Africa.

AMERICAS

Utility futility? – US President Joe Biden is set to meet Wednesday with the leaders of some of the nation’s largest utilities, as the White House mounts a renewed push to get its climate-spending laden reconciliation package back on track. The meeting comes as Democrats and the White House work to find a way to advance a new version of the so-called Build Back Better Act with its $550 bln in energy and climate spending. Included in that is more than $300 bln in new and expanded tax credits for wind and solar power, nuclear plants, and other items that have drawn utilities’ support. The effort stalled amid objections to the broader measure from conservative Democratic Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, pivotal votes in the evenly divided chamber. (Bloomberg)

Climate-friendly cash – The US Department of Agriculture (USDA) plans to spend up to $1 bln to foster the creation of climate-friendly agricultural and forestry products by offering grants to facilitate their production and the markets to sell them. The new Partnerships for Climate-Smart Commodities programme announced Monday will provide up to $100 mln for individual pilot projects to plan and implement emission-reducing practices, create new markets to sell the products that result from those practices, and quantify the effectiveness of the practices. The department has set an Apr. 8 deadline for proposals that range from $5 mln to $100 mln and a May 27 deadline for those that would cost less than $5 mln. (Iowa Capital Dispatch)

ASIA PACIFIC

LNG fuel – BHP Group unveiled the world’s first LNG-fuelled bulk carrier vessel in Singapore on Monday, Channel News Asia reports, one of five vessels that the mining giant will take delivery of in 2022 as part of its efforts to curb supply chain GHG emissions. The 299m-long Mt Tourmaline Newcastlemax ore carrier was built by Eastern Pacific Shipping in China and stopped off in Singapore to take on LNG fuel. It will next head to Port Hedland in Western Australia to load iron ore that will then be shipped to customers in China.

Rapid transition – Australia’s Clean Energy Council launched its Roadmap for a Renewable Energy Future: Federal Election Policy Recommendations, which urges Australia’s political leaders to commit to meeting the country’s domestic electricity demand with clean energy by 2030 (Clean Energy Council).

VOLUNTARY

VCS updates – Offset standard manager and developer Verra on Monday announced a public consultation for proposed changes to the VCS programme. Among the proposals are updates to the non-permanence risk tool for nature-based projects, updates to uncertainty requirements, and the introduction of tonne-year accounting. Verra will hold a webinar on Feb. 16 at 1000 Eastern time (18000 GMT) to go over the proposed updates, and comments are due by Apr. 8.

SCIENCE & TECH

Ice light – There is 20% less water contained in the world’s glaciers than previously estimated, scientists have said, with the finding lowering the potential impacts of sea level rise due to the climate crisis. A new atlas – in which more than 250,000 glaciers around the planet are mapped with measurements recording their velocity and depth has revised earlier estimates of glacial ice volume, with a fifth less ice available to contribute to sea level rise. The researchers said their findings also have implications for the availability of drinking water, as well as supplies of water for power generation, agriculture, industry and other uses. Existing projections for climate-driven sea level rise will need to factor in the new data, so scientists can more accurately assess the risks to coastal-dwelling populations around the world. (Independent)

AND FINALLY…

Guten Morgan – German Foreign Minister Annalena Baerbock has recruited the chief of Greenpeace International, American Jennifer Morgan, to be her special envoy for international climate policy to help prepare for annual global climate conferences, Reuters reported, citing government sources. International climate policy has moved to the foreign ministry from the environment ministry under Germany’s new ruling coalition, made up of the Social Democrats, and liberal Free Democrats, and Baerbock’s Greens. The government’s top official in the new administration’s beefed-up economy and climate ministry, Robert Habeck, was previously head of environmental think-tank Agora Energiewende.

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