CP Daily: Thursday February 10, 2022

Published 00:57 on February 11, 2022  /  Last updated at 00:57 on February 11, 2022  /  Newsletters  /  No Comments

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

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TOP STORIES

Key EU lawmaker plans “careful” ETS price intervention amendment

German MEP Peter Liese said on Thursday that he plans to make a “careful” amendment to the EU ETS mechanism meant to prevent price spikes that wouldn’t “exaggerate the issue”.

MEPs far from compromise on EU ETS reforms amid free allocation spat

EU lawmakers remain at odds over how best to shape the bloc’s carbon market nearly a month after the release of a draft report, the bloc’s parliament heard on Thursday as key MEPs looked unwilling to compromise on core elements.

EMEA

Euro Markets: EUAs claw back early losses amid nervous market

EUAs clawed back early losses on Thursday as some traders continued to react to media reports that EU lawmakers are considering changes to the market’s little-used price management mechanism.

European steelmakers report strong post-pandemic output recovery

European steelmakers upped their output over 2021 as demand picked up following the worst of the pandemic restrictions, though two of the biggest players have been advancing their climate ambitions in preparation for tougher emissions obligations, according to financial results published on Thursday.

EU has the right to pass on new carbon price to oil majors -report

The EU has the legal means to ensure oil majors bear the brunt of costs from a new ETS for buildings and road transport, according to an NGO-commissioned report published on Thursday that seeks to avoid unfairly hitting poorer households.

VOLUNTARY

Broker-linked crypto startup eyes ties with Klima DAO as on-chain competition intensifies

A crypto startup has partnered with a European carbon brokerage to bring on-chain voluntary offsets and aims to become a branch of Klima DAO, increasing competition in the space and raising questions about the fate of a new nature-based token that launches on Thursday.

Crypto carbon prices drop as Toucan Protocol launches nature-based token

Blockchain infrastructure provider Toucan Protocol on Thursday launched its long-awaited Nature-based Carbon Token (NCT), causing prices for both its new and existing carbon credit-backed offerings to drop in the aftermath.

VER platform steadfast on early Q2 auction launch, building on pilot round

Singapore carbon exchange and marketplace Climate Impact X (CIX) remains committed to launching its auctions in Q2, noting lessons learned from the October pilot auction, its CEO said on Thursday.

AMERICAS

NA Markets: California carbon retraces before quarterly auction, RGGI slides to CCR

California Carbon Allowance (CCA) prices declined this week as traders readied for the first quarterly WCI auction of the year, while RGGI Allowances (RGAs) inched down as the market remains glued to the Cost Containment Reserve (CCR) trigger price amid other regulatory uncertainty.

Oregon Clean Fuels Program records third straight deficit during Q3

The Oregon Clean Fuels Program (OCFP) saw deficit generation outpace credits once again in the third quarter of 2021, shrinking the credit bank of the low-carbon fuel standard to its lowest level in two years, according to government data published this week.

Brokers Evolution Markets launch structured transactions group to help clients with energy transition

Brokerage Evolution Markets has announced the launch of a structured transactions group to help its clients navigate the energy transition, manage climate risk, and meet sustainability goals through market-based offtake and risk transfer solutions.

ASIA PACIFIC

Australia Market Roundup: Landfill operators claim large offset batches, as spot ACCU price continues south

Landfill gas operators LGI and LMS secured the largest batches of newly minted Australian carbon offsets, while the spot price in the secondary market has continued to soften throughout this week but holds well above A$50/t for now.

Chinese carbon sink projects struggle to break even at current prices, study shows

China will rely heavily on carbon sink projects to meet its climate commitments, but one study has found that foresters need a bump from current domestic offset prices for projects to become viable.

Australia’s AGL brings forward coal plant closures, sets 2040 net zero target for clean energy arm

AGL, Australia’s largest owner of power generation assets, will bring forward the closure dates of two coal power plants and commit to net zero emissions by 2040 for its new low carbon business, it said Thursday.

IN MEMORIAM

Environmental markets trading firm co-founder passes away

A partner and co-founder at one of Europe’s largest provider of market-based sustainability solutions has died.

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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

Nuclear renaissance – President Macron has announced that France will build up to 14 new reactors as part of a “renaissance” for the French nuclear industry, the Independent reports. The new nuclear reactors are part of the country’s strategy to reduce GHG emissions and will be built and operated by state-controlled energy provider EDF. Tens of billions of euros in public financing will be mobilised to fund the projects. President Macron also provided a roadmap for the building of third-generation EPR reactors, a newer model of reactor developed in Europe. Macron also announced he wanted to extend the lifespan of older nuclear plants to 50 years or more, from 40 years currently, provided it was safe. Nuclear energy currently provides about 70% of French electricity, more than in any other country. The move comes amid concerns about spikes in energy prices and France’s dependence on global gas and oil producers.

Never zero – Poland’s plans for a new generation of gas-fired power plants would make it impossible for it to meet net zero emissions by 2050 and cost taxpayers $4.4 bln, research by think-tank Carbon Tracker showed on Thursday. Poland, mainly reliant on coal, plans to more than double its existing gas-fired power generation capacity to over 8 GW by 2030, viewing gas as a transition fuel before switching to nuclear and renewables. Carbon Tracker analysed the financial viability of five planned gas plants with combined capacity of 3.7 GW due to begin operation between 2023 and 2027, which would more than double Poland’s current gas-fired capacity. It calculated the levelised cost of energy – the average cost of each unit of energy generated over the lifetime of each plant – for new renewables and for the five gas projects. The report said that all five projects will be more costly investments than either new onshore wind, offshore wind or solar farms. If the gas plants run for a 30-year lifespan it would be impossible for Poland to reach an EU-wide goal of net zero emissions by 2050. To meet that goal, they would have to close after an average seven years, costing developers more than $200 million, the report said. (Reuters)

Hoff in a huff – The state premier of east German coal mining state Saxony Anhalt has said that the federal government’s targeted earlier coal phaseout date of 2030 is unlikely to be achieved. Speaking during an online event, Reiner Haseloff, a member of the conservative Christian Democrats (CDU), said licensing procedures need to be accelerated and more financial resources must be made available, among other challenges. “Within the current framework, this is not possible,” he said. Haseloff added that a 2038 date – the goal set by the previous government that included the CDU and the Social Democrats (SPD) – would be more realistic and avoid putting German industry at a competitive disadvantage, as well as lessen the risk of destabilising democracy in severely affected regions. (Clean Energy Wire)

Dutch courage – GHG emissions have fallen by more than 25% in the Netherlands relative to 1990. This means that the so-called Urgenda target – a reduction in GHG emissions of at least 25% by 2020 – was achieved, the country’s national statistics agency reports. Between 2015 and 2020, emissions from coal-fired power stations were reduced by 80%. In 2020, road transport emissions were 15% lower than in 2019, including through the result of coronavirus-related shutdowns and other restrictions. In addition, 2020 was a relatively warm year and therefore less gas was needed for heating than in 2019.

AMERICAS

Tsk tsk on risk – Democratic Senator Elizabeth Warren criticised the US Securities and Exchange Commission (SEC) on Thursday for delays to its landmark climate change risk disclosure rules and called for “quick action” on the issue. Last year, the SEC began working on a new rule requiring US-listed companies to provide investors with detailed disclosures on how climate change could affect their business. The SEC initially said it would publish a draft in October, but Chair Gary Gensler subsequently pushed that deadline to January. Reuters reported last month that the agency was trying to decide whether it should require companies to disclose not only their own GHG emissions, but those generated by their suppliers and other partners. Bloomberg reported this week that the agency’s commissioners are divided over how far to go. Warren’s letter will increase pressure on Gensler to deliver a game-changing rule that would reveal all the emissions for which a company is responsible.

Put it on your charge card – The White House unveiled a framework on Thursday to dole out $5 bln to states to expand their electric vehicle charging networks. A senior administration official called it a “significant down payment” on US President Joe Biden’s promise to build out 500,000 charging stations by the end of the decade. States will have to lay out their plans to the federal government before receiving the money, and Thursday’s framework calls on states to prioritise building charging infrastructure on interstate highways under the Transportation Department’s “alternative fuel corridors.” Funds will be sent out over the next five years. (Politico)

Methane miss – The US EPA dramatically underestimates the impact of methane emissions, a study published Wednesday in Environmental Research Letters, finds. The agency’s current method for evaluating methane’s heat-trapping impact fails to account for its near-term impact, the research report says, by using an “arbitrary and unjustified” 100-year timeline despite the fact that methane only stays in the atmosphere for about 12 years. The 100-year time frame was used because Kyoto Protocol negotiators settled on it as a compromise between 20- and 500-year time frames and has massive implications for assessing the climate impact of methane pollution. As a heat-trapping gas in the atmosphere, methane is 81 times more potent than CO2 over a 20-year period, but just 28 times more potent over a 100-year period. (Climate Nexus)

Mine undermined – On February 9, a federal court in Brazil’s Rio Grande do Sul state revoked the environmental licensing process of the Guaiba coal mine, planned to be built in the Porto Alegre Region. The decision is a victory of the Brazilian socio-environmental movement that fought against the project, according to 350.org. Two reasons guided the court’s decision: The absence of a section in the mine’s environmental impact study regarding the Indigenous peoples, and the non-compliance by coal company Copelmi in promoting a public, prior, and informed hearing with the Indigenous communities living under direct or indirect influence of the project. The coal mine would occupy a 45 square km area in two cities in the Porto Alegre Region. Experts have been warning for three years that more than 4.3 mln people living in the region would suffer from impacts such as water contamination and air pollution caused by the coal mine.

Duke drop – US power generator Duke Energy on Wednesday said that it targets energy generated from coal to be just 5% of total energy generation by 2030, and aims at a full exit from coal by 2035. Currently, the company’s coal fuel represents about 27% of its total energy generation. The electric utility said the targets are part of an expansion of its clean energy action plan, in which its 2050 net zero goals now include Scope 2 and Scope 3 emissions. (MarketWatch)

Shiver me Kinders – Oil and gas infrastructure company Kinder Morgan this week announced the receipt of the necessary commercial commitments to proceed with the permitting and construction of a renewable diesel hub in Southern California. Once constructed, the Southern California renewable diesel hub will enable customers to aggregate renewable diesel batches (R99) in the Los Angeles area and move them on SFPP LP’s pipeline system to the high demand markets in Colton and Mission Valley California, creating up to 20,000 bpd of blended diesel throughput capacity at its truck racks with the ability to expand in the future. Upon completion in Q1 2021, the Southern California hub will be the first of its kind in the US to transport batches of R99 by pipeline with no resulting loss of product to transmix – a process designed to enable customers to avoid the loss of the valuable California renewable tax credits, including Low Carbon Fuel Standard (LCFS) credits. (North American Energy Pipelines)

ASIA PACIFIC

That’s a no – The Australian High Court has refused to hear an appeal sought by the proponents of the Bylong coal mine project who wanted to overturn state planning refusal, potentially killing off the project for good. Korean electricity utility Kepco had applied for planning approvals to build the Bylong coal mine, around 160km north-west of Newcastle, which would have delivered up to 120 million tonnes of thermal coal over a 25-year operating life. The coal was destined for coal generators in South Korea. (RenewEconomy)

You Kathmandu it – The Architecture for REDD+ Transactions (ART) programme on Thursday announced it has approved a TREES concept from Nepal’s REDD Implementation Centre government agency. The jurisdictional REDD concept would utilise a 2017-21 reference period and 2022-26 crediting period for emissions reductions in Nepal’s Bagmati, Gandaki, and Lumbini provinces, covering 48% of national forest area. Nepal noted some of the area in these provinces is already under an Emissions Reduction Payment Agreement (ERPA) with the World Bank’s Forest Carbon Partnership Facility, and therefore will not be counted for ART reductions until after 2024. Nepal said it will count the GHG mitigation from the eventual credits towards its Paris Agreement NDC, though it said members of the LEAF coalition are also expected to buy units.

Go west – The West Australian (WA) government plans to create hydrogen hubs and vast areas of solar panels along 500 km of Pilbara coastline by 2030 – with federal funds for initial infrastructure the first step towards the ambitious dream, WA Today reports. A confidential presentation from the WA Department of Jobs, Tourism, Science and Innovation obtained by WAtoday outlines a vision of WA’s iron ore region becoming a “global centre of hydrogen production, use and export at scale” with a zero-emissions (“green”) iron ore and steel industry.

Shanghai sustainability – German chemicals firm Covestro is likely to deploy sustainably sourced hydrogen at its Shanghai plant, its first facility globally, putting it on track to reach its decarbonisation goal, the South China Morning Post reports. Covestro last month signed a memorandum of understanding to procure up to 100,000 tonnes of green hydrogen per year from Fortescue Future Industries (FFI), which will allow it to reduce GHG emissions by 900,000 tonnes a year. The Leverkusen-based firm reported 5.45 mln tonnes of GHG emissions in 2020 from energy use. It had previously targeted to cut its emissions from energy sources by 50% by 2025 from 2005 levels. Covestro is expected to provide an update on its climate goals by next month.

VOLUNTARY

Just Google it – Google.org’s charitable division has announced a $1 mln grant to certifier Gold Standard Thursday, to develop an open, global collaboration on digital solutions for voluntary carbon market monitoring, reporting, and verification (MRV). The initiative will kick off in the coming months, Gold Standard said, with core contributions from clean tech companies ClimateCHECK and Cosmos Partners as well as the IOTA Foundation. The initiative will help track projects’ GHG emissions reductions but also other indicators related to the Sustainable Development Goals. “We aim to leverage technology to accurately and efficiently measure climate and development outcomes,” said Margaret Kim, CEO of Gold Standard. “The goal is to maximise the impact of every dollar, euro, or peso toward climate security and meaningful sustainable development, and put more power in the hands of those delivering this impact.”

Where the Wild Carbon things are – Quebec-based investment vehicle Inlandsis Fund, offset project developer Bluesource, and conservation non-profit Northeast Wilderness Trust (NWT) on Thursday announced they have entered into a long-term agreement to develop the 2,400-ha Woodbury Mountain Wilderness Preserve forest carbon project in Vermont. The project will be listed with the American Carbon Registry and generate “Wild Carbon” credits, a programme of NWT that generates and markets offsets derived only from recently protected wildlands and that are permanently conserved with a legally binding Forever-Wild Conservation Easement. Inlandsis told Carbon Pulse that offset generation is expected to start in 2023, and that the project will generate several hundred thousand credits over its first decade.

SCIENCE & TECH

This is a Carbon Call – A new initiative led by Microsoft and the ClimateWorks Foundation aims to improve methods for tracking how much GHG companies and countries are emitting. The Carbon Call initiative launched Thursday with more than 20 organisations is an effort to develop common, reliable, and interoperable carbon emissions accounting systems. The Carbon Call aims to focus on four key areas: methane, indirect emissions, carbon removal, and the land-use sector. (Axios)

AND FINALLY…

Billboard brouhaha – Polish state-owned utilities have launched an advertising campaign blaming Brussels and the EU ETS for Poland’s high energy prices. On billboards and newspapers across Poland, the TGPE trade association attacked climate policies using a figure widely criticised by experts as misleading. The message reads: “The European Union’s climate tax is as much as 60% of energy production costs. EU climate politics = expensive energy/high prices.” It has been amplified by the nationalist government and many of its anti-EU supporters, provoking a rebuttal from the European Commission climate chief Frans Timmermans. He wrote an article for Polish website Onet which opened (in Polish): “Let’s be clear: EU policy is NOT responsible for 60% of your energy bill. Some people use such a number, distorting the meaning of the discussion.”  Other Poles also chimed in, including energy expert Bernard Swoczyna: “This is not true, the fees for CO2 emissions constituted only about 30% of the electricity exchange price for December. Polish power plants take advantage of electricity shortages caused mainly by the lack of gas in Western Europe and they make great money on it … And let’s remember that the revenues from the sale of CO2 emission allowances go to Polish public finances, and only last year the tax office earned PLN 25 bln on this.” As a result, he added, the Polish government can afford its planned VAT reduction. (Climate Home, Biznes Alert)

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