CP Daily: Wednesday February 9, 2022

Published 01:46 on February 10, 2022  /  Last updated at 01:46 on February 10, 2022  / Carbon Pulse /  Newsletters

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

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EU lawmaker weighs major changes to ETS price intervention rules

The lawmaker steering carbon market reforms through the European Parliament is planning to propose changes to the EU ETS mechanism meant to prevent price spikes.


Euro Markets: EUAs tumble on lawmaker price control threat

EU carbon allowances suffered their biggest one-day loss since Dec. 17 as traders sold aggressively on reports that EU lawmakers are considering more ambitious price control mechanisms for the EU ETS, while the UK’s latest auction triggered additional selling as British utilities swapped EUAs for UKAs.

Campaigners fear EU’s gas-backing taxonomy may prompt weakening of standards

Campaigners fear EU plans to allow some gas facilities to get a green investment label may have wider repercussions, notably a watering down of climate standards deployed by the bloc’s investment bank.

Equinor couples record-high earnings with 2030 climate pledge

Norwegian energy company Equinor record-high annual earnings and flagged plans to drill for more oil in its annual results on Wednesday, despite also announcing a new 2030 emissions reduction target that restricts the role of offsets.


SK Market: Korean monthly CO2 auction attracts just three bidders as interest fades

Only three companies submitted bids at South Korea’s monthly carbon allowance auction on Wednesday, as market oversupply and the several months left to annual compliance keep interest at bay.

NZ Market: NZUs break into the NZ$80s as demand holds firm

New Zealand carbon allowances broke the NZ$80 barrier for the first time ever in Wednesday trade, as a mix of compliance and speculative demand continues to push the permits into new record territory.

Inpex lays out 10-year plan to boost lower-carbon businesses

Japanese oil and gas operator Inpex released a long-term plan on Wednesday in which it will focus on five key “net zero businesses” the company has identified to help meet its emissions targets for 2030 and 2050.


Market caution causes 50% quarterly drop in “carbon neutral” fuel shipments

Carbon neutral fuel shipments fell by 50% quarter-on-quarter in Q4, analysts said in a report on Wednesday, with a market source citing industry caution over how such claims should be structured.

South Pole targets US, Asia expansion after adding new minority investors

Offset developer and consultancy South Pole has secured funding from two new minority investors to help maintain its rapid expansion and strengthen its presence in the US and across Asia.


California compliance offset issuances maintain slow start to 2022

California regulator ARB has awarded less than half the number of compliance offsets through the first three issuances of 2022 than the same period last year, according to agency data published Wednesday.


Mining industry would be wise to advocate for global carbon tax -report

The mining industry should be a vocal advocate of a global carbon tax, where any policy costs associated with a CO2 price would be significantly overshadowed by the resulting low-carbon economy demand boom for metals and minerals, according to research published this month.


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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


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


Rock solid – A federal appeals court yesterday agreed to keep a Colorado lawsuit before a state bench, delivering a victory to local governments suing fossil fuel companies for climate impacts. The ruling by the 10th US Circuit Court of Appeals is the first test of a Supreme Court decision last May that sent a host of climate liability cases back to appellate judges with instructions to consider a broader range of factors when deciding whether the challenges should be heard in state or federal court. Judges of the 10th Circuit rejected all six of the oil firms’ claims to move the case to federal court, where industry may face better odds. Boulder and two counties suing Suncor Energy and Exxon Mobil, Judge Carolyn McHugh wrote, “do not allege any federal claims.” Instead, McHugh, joined by Judge Jerome Holmes and Senior Judge Carlos Lucero, said the claims represent a variety of state-based actions, including public nuisance, unjust enrichment, and violation of the state’s Consumer Protection Act. The question of which courts should hear climate liability cases has stymied action on nearly a dozen lawsuits by municipalities looking to force the oil and gas industry to pay for producing planet-warming emissions. The suits were filed in state courts, but industry lawyers have sought to move the cases to federal benches, where judges could find that the municipalities’ claims are pre-empted by the Clean Air Act. (E&E News)

It’s official – Canada’s Conservative party is jettisoning an election promise to put a price on carbon, with its interim leader telling MPs the issue must be dealt with in their upcoming leadership race. Multiple sources told the Toronto Star that Candice Bergen informed her caucus of the approach at a meeting on Wednesday morning. The meeting came exactly a week after the Conservative MPs voted to remove Erin O’Toole as party leader, a move many of them explicitly linked to his embrace of carbon pricing almost a year ago. That decision had marked a major shift in party policy — the Conservatives have long opposed carbon levies and O’Toole had run for the party’s leadership opposing them as well. But in a bid to put forward a climate change plan that would be seen as credible, he pivoted and promised that an elected Conservative government would introduce a consumer price on carbon. That announcement in the spring of 2021 came as a surprise to his caucus, and just a month after the party’s grassroots rejected inserting a statement that “climate change is real” in their official policy book. It is that book which must form the basis of the party’s policies over the coming months, Bergen told the MPs on Wednesday. So far, Ottawa-area MP and carbon tax critic Pierre Poilievre is the only person to formally declared their intention to seek leadership of the party.

XL file – The Canadian province of Alberta on Wednesday formally initiated a trade challenge to recover its investment in the Keystone XL oil pipeline, which was scrapped in 2021 after the US cancelled a key permit. Alberta, Canada’s largest oil-producing province, had invested C$1.3 bln in the project and is seeking compensation from the US through a legacy North American Free Trade Agreement claim, under the new Canada-United States-Mexico Agreement. Keystone XL would have carried 830,000 barrels per day of oil from Alberta to the US Midwest, but was held up for a more than a decade by environmental opposition and regulatory hurdles, before President Joe Biden finally scuttled the project by revoking a presidential permit last year.

Military mitigation – The US Army released the military’s first climate strategy on Tuesday, along with announced goals to cut GHG pollution in half by 2035, transition its non-tactical fleet to all electric by 2035, and reach net zero emissions (including from procurement) by 2050. The “roadmap of actions” includes a renewed focus on assessing and mitigating climate-exacerbated risks to soldiers in the field as well as Army bases and other operations. The military is a major GHG emitter – in 2017 alone it released 59 Mt of GHGs, more than industrialised nations including as Denmark and Sweden. (Climate Nexus)

Shale sale – New York’s state pension fund will sell $238 mln worth of stock and debt it holds across 21 shale oil and gas companies including Chesapeake Energy, Hess, and Pioneer Natural Resources, saying they have not shown they are ready to move to a low-emissions economy. However, the fund will keep another 21 shale companies including CNX Resources and EQT, according to material reviewed by Reuters from New York Comptroller Thomas DiNapoli, who oversees retirement assets. The $280 bln New York State fund is not a major holder of shale companies, but as the third-largest US state pension fund its decisions are closely followed as other institutions weigh whether to move away from fossil fuel stocks. (Reuters)


Under the hammer – Britain will hold yearly auctions to support new renewable projects from 2023 as it seeks to boost low carbon power production to meet its climate goals, Reuters reports. Britain has a target to reach net zero emissions by 2050 and plans to generate 40 GW of electricity from offshore wind by 2030 – up from around 10 GW currently. The move also comes amid spiralling energy costs, with a cap on prices for around 22 mln British households due to rise 54% from April because of record wholesale gas prices. “The more clean, cheap, and secure power we generate at home, the less exposed we will be to expensive gas prices set by international markets,” UK minister Kwasi Kwarteng said.

Eni way in – Italian energy group Eni said it had signed 19 agreements with companies to capture and store their emissions as part of its HyNet North West project in the UK. Eni said six of the deals had been signed in January and included energy intensive companies. (Reuters)


CO2 shipping – Malaysia’s state energy firm Petronas said on Wednesday it has signed an agreement with Japanese shipping company Mitsui O.S.K Lines to explore opportunities in liquefied CO2 shipping in the Asia Pacific and Oceania regions, Reuters reports. Both parties will jointly study liquefied CO2 transportation for the carbon capture utilisation and storage value chain, Petronas said in a statement.

Banking on lower emissions The Commonwealth Bank of Australia on Wednesday announced it will join the Net-Zero Banking Alliance (NZBA), convened by the UN. As part of its commitments under that initiative, CBA will set interim sector-level targets for power generation, thermal coal, and upstream oil and gas later this year, it said. At the same time, the bank held a presentation for investors, unveiling a number of new products and services, including an app it will launch in October with tech firm Cogo that will help calculate the personal carbon footprint of users and offer an emissions offsetting option.


Early asks – Carbon project certifier Gold Standard has launched an RFP through Mar. 8 for its Article 6 Early Movers Programme, seeking an implementation partner to support work with 2-4 developers and host countries towards authorising Article 6 emissions reductions and to produce a report on the lessons learned. Read Carbon Pulse’s latest on how Gold Standard is a major backer of Paris-adjusted crediting.

Betting the farm – Farm management startup Estonia-based eAgronom has closed a $7.4 mln Series A round led by Yolo Investments and ZGI Capital. Also participating was Trind VC, Iron Wolf Capital, and United Angels VC. EAgronom is also the recipient of a $600,000 EU grant, and had previously raised $12 mln in backing from investors. With this funding, eAgronom says it aims to create a farming-based carbon credits platform. It will also expand to new markets (including outside of the EU), and improve its carbon tracking technologies. It will also launch a web3-based DAO called Solid World to help farmers and other carbon projects finance CO2 sequestration. It currently has as clients 1,500 agribusinesses that cover more than a million hectares of arable land across Europe. (TechCrunch)

Betting la ferme – The EU has set itself the ambitious target of achieving climate neutrality by 2050, and the agriculture sector has a key role to play in meeting this target. At a meeting this week, European ministers responsible for agriculture were able to see first-hand the practices used by farmers and the structures helping them implement low-carbon systems. For example, France’s proposed approach makes use of two tools: a carbon diagnosis scheme and the low-carbon label. This helped paint a clear picture of the changes to agricultural models required at farm level and the need to support farmers in these transitions. At the working meeting on Tuesday, participants were able to achieve a political consensus at European level concerning the role of farmers and forestry professionals in the fight against climate change. The ministers shared their experience regarding climate-friendly agricultural practices, such as planting hedgerows and ground cover, diversifying and rotating crops while integrating pulses, and implementing agroforestry and sustainable grassland management, which are associated with many environmental benefits. They also focused on specific systems such as wetlands and peatlands. The participants also shared initiatives already in place in certain member states and identified the conditions needed to expand these efforts. In addition to the mobilisation of public funding and in particular the CAP, a common certification framework at European level emerged as a promising avenue, provided that it reconciles robust science, ease of implementation and sufficient financial incentive. The ministers also highlighted the importance of research and experimentation, and mobilising agricultural training and advice networks to share knowledge and best practices. (French government)


NFT 180 – Less than 48 hours after they were launched, WWF-UK has quietly cancelled the sale of non-fungible tokens (NFTs) to raise funds for its conservation work. Following a huge backlash, in a brief statement published on its website Friday evening, the charity said it had agreed to bring the trial to a close and thanked those who had purchased the tokens. “We recognise that NFTs are a much debated issue and we all have lots to learn about this new market, which is why we will now fully assess the impact of this trial and reflect on how we can best continue to innovate to engage our supporters,” it said. The U-turn followed an outpouring of criticism on Twitter when the green group announced it was planning to mint NFTs representing 13 of the world’s most endangered animals and sell them on an “eco-friendly” blockchain. Traditional conservation supporters reacted furiously, citing the emissions associated with generating NFTs. Many said they had cancelled their monthly donations. But WWF-UK’s sudden halt of the NFT sale has now drawn criticism from the crypto community who backed the project. “I’m still impressed [at] how they manage[d] to piss off environmentalist[s] and NFT enthusiast[s] at the same time,” one of the artists who designed NFTs wrote on Twitter. (Climate Home)


That don’t impress me much – Governments around the world may have issued lofty promises about combating climate change at COP26 last year, but their citizens don’t seem to be too impressed, according to a new Politico/Morning Consult poll that surveyed respondents in 13 countries around the world on a host of climate-related subjects. US President Biden’s base is largely unimpressed with his performance on climate change, with 80% of left-leaning respondents saying he isn’t doing enough and only 10% saying he is doing the right amount. Meanwhile, 26% of right-leaning US respondents offered a positive assessment of Biden on climate change. Respondents around the world also aren’t buying China’s argument that it’s a developing country and should be given some slack on cutting emissions. At least 60% of respondents in all countries surveyed other than China thought the country should set the same targets and timelines as the developed world. As for who should pay up to combat climate change, majorities in every country surveyed except India said the burden should lie on private companies. Nearly 70% of respondents said the private sector should pay “a lot” or “some,” far outpacing taxpayers, the government, and consumers. Only 5% of US respondents felt corporations were stepping up to address climate change and only 4% said Wall Street was doing all it could.

*** Tuesday’s newsletter mistook Germany’s economy minister Robert Habeck for his state secretary Patrick Graichen, thanks to the readers that flagged this. ***

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