CP Daily: Monday February 14, 2022

Published 22:49 on February 14, 2022  /  Last updated at 22:49 on February 14, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

Carbon offsets should come under US climate risk disclosure rules  -green groups

Environmental organisations have urged the US Securities and Exchange Commission (SEC) to include mandatory reporting on carbon offset use as part of new climate-related financial risk disclosure requirements, with draft rules expected in March after repeated delays.

VOLUNTARY

VER price rally to persist as developers struggle to keep pace -report

Voluntary emissions reduction (VER) prices are likely to continue rising for up to five more years as supply struggles to keep up with increasing demand, analysts said in a report published Monday.

VCM Report: Nature-based VERs continue slide, with CORSIA units firmer

Exchange-traded prices for standardised nature-based voluntary emissions reduction (VER) contracts fell for the third consecutive week, while CORSIA-eligible contracts retained greater resilience with talk of a major deal propping up prices.

ASIA PACIFIC

Japan’s misplaced focus on advanced coal technologies not cost-effective, frustrates climate goals, report says

Japan needs to reevaluate its reliance on advanced coal technologies if it is to meet its climate objectives in the most cost-effective way, according to a report released Monday.

Lawyers file lawsuit against New Zealand commission over offset reliance in NDC

An activist group of hundreds of New Zealand lawyers has filed a lawsuit against the independent Climate Change Commission over the reliance on buying international carbon credits to meet the nation’s Paris Agreement commitments.

AMERICAS

RGGI compliance holdings trail emissions at close of 2021 -report

Entities regulated by the power sector RGGI cap-and-trade programme were not holding enough allowances to cover their CO2 obligations after the fourth quarter of 2021, according to a report published Friday.

Financial entities dial back California carbon net length, emitters shrink net short

Speculators decreased their net length in California Carbon Allowances (CCAs) last week, as compliance entities added permits to their holdings, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

EMEA

Euro Markets: EUAs recover from dip below €90 amid energy consolidation

EUA and energy prices slipped back from early highs on Monday after a weak auction but staged a late consolidation to limit the losses, while energy also recovered after weekend concerns over rising tensions in Ukraine eased amid conciliatory statements from a Ukrainian official.

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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

Bank expansion – Europe’s biggest banks have provided £24 bln to oil and gas companies that are expanding production less than a year after announcing net zero pledges, according to analysis by campaign group ShareAction. It found that that banks such as HSBC, Barclays, and BNP Paribas have offered loans and other financing to 50 companies with large oil and gas expansion plans since signing up to the Net-Zero Banking Alliance (NZBA) last April, contradicting IEA projections that no such new fossil fuel expansion plans should be made to align with a 1.5C global warming scenario. (The Guardian)

Frack’s back – More than 30 UK lawmakers from the ruling Conservative party have called on the prime minister to lift the ban on fracking, labelling the 2019 ban on fracking as “unconservative.” Former Brexit negotiator Lord Frost said: “If we don’t produce it here, as we have seen, all we do is import gas from elsewhere, and push up overall carbon emissions too.” Most of the 30 signatories refused to reveal their identities. (Sunday Telegraph)

MENA week – The UN has announced new dates for its first-ever Middle East and North Africa Climate Week, MENACW 2022. Originally planned to begin in February, the in-person meeting was delayed due to the recent surge in Omicron coronavirus variant cases. MENACW 2022 is now scheduled to be held from March 28-31 in Dubai.

Terminal issue – The construction of Germany’s first LNG terminal remains uncertain as the project continues to face delays, Clean Energy Wire reports. There is still no permit for the planned facility and no date has been set for a final investment decision, according to the company responsible for the project. Construction applications for the terminal were only submitted in June last year despite the project company having been set up in 2018. The state’s minister of economics said that “not all the documents have been properly submitted yet.” He added that a permit won’t be granted until autumn 2023 at the earliest. Given construction times, the terminal is expect to open in 2026 at the earliest. As well as delays with the permit, potential lawsuits from environmental NGOs over safety concerns could also slow down the construction process.

AMERICAS

January joiners – The Brazilian Amazon rainforest saw record deforestation in January, five times larger this year than in 2021 and higher than in any January since records began in 2015, according to data from Brazil’s government space research agency Inpe. Deforestation totalled 430 square km in January – an area more than seven times the size of Manhattan. Environmental researchers said they were not surprised to see destruction still rising and pointed to President Jair Bolsonaro’s weakening of environmental protections since he took office in 2019, where he argued that the government should exploit the area to reduce poverty. (BBC)

Thirty-five by 32 – The California Public Utilities Commission (CPUC) on Thursday adopted a 2032 GHG target of 35 Mt for the state’s electric sector, marking an almost 25% cut to the previous 46 Mt target. Utilities will need to procure approximately 25.5 GW of new renewables and 15 GW of storage and demand response resources by 2032. Regulators say the new plan includes more solar and battery storage than the one adopted in 2019, and also includes long-duration storage, out-of-state wind, and offshore wind resources. (Utility Dive)

It’s not a sprint, it’s a… – Marathon Petroleum aims to reduce emissions from the burning of the fossil fuels it produces by 15% from 2019 levels through the end of the decade, the company said in a statement. The largest US crude-oil refiner said the new Scope 3 emissions target improves the company’s GHG disclosures, though the fuel maker didn’t elaborate on how it plans to achieve the goal. The Ohio-based company said its pipeline unit has also established a new 2030 target to cut methane emissions intensity from its natural gas gathering and processing operations by 75% from 2016 levels, expanding on an existing goal of a 50% cut by 2025. (Bloomberg)

Dirty money – Canadian Minister of Environment and Climate Change Steven Guilbeault launched a new fund Monday designed to support initiatives that reduce industrial GHG emissions. The fund will use proceeds from the Output-Based Pricing System (OBPS), the federally managed carbon pricing programme for industry, applied in Manitoba, New Brunswick, Ontario, and Saskatchewan. Approximately C$161 mln from the 2019 compliance period will go towards projects and technological applications that reduce carbon pollution for utilities and heavy industry.

ASIA PACIFIC

Blue before green – Reliance Industries, helmed by Asia’s richest man Mukesh Ambani, aims to be among the largest producers of blue hydrogen at “competitive cost” in its ambitious green-energy transition plan, Economic Times reports. The Mumbai-based company will re-purpose a $4 bln plant that currently converts petroleum coke into synthesis gas to produce blue hydrogen for $1.2-$1.5/kg, according to a presentation. So-called blue hydrogen is made using fossil fuels but captures the CO2 formed during its production, and Reliance sees the conversion as a temporary measure until the cost of green hydrogen, produced from the electrolysis of water using renewable energy, becomes competitive.

Work that one out – Executives from Australia’s Snowy Hydro corporation, owned by the Australian government, have told the Australian Senate estimates committee that the 660 MW Kurri Kurri gas plant that it will build from taxpayer funds will have negative emissions – despite its reliance on fossil fuels, Renew Economy reports. The claim was made by Snowy Hydro’s chief commercial officer, Gordon Wymer, who had been asked by Greens Senator Larissa Waters what the emissions intensity of the gas-fired peaking Kurri Kurri plant would be. But rather than suggesting the plant may be paired with a carbon reduction measure like carbon capture and storage, or being switched to run on renewable hydrogen, Wymer suggested the Kurri Kurri project could take credit for additional investments in wind and solar projects.

Carbon (not so much) capture – Chevron’s CCS facility at its Gorgon LNG plant in Australia underperformed in the 2020-21 financial year with 2.26 Mt CO2 injected underground, well below its annual capacity of 4 Mt CO2, Upstream reports. Chevron’s CCS project has been working well below its annual capacity since it was launched in August 2019, three years after the Gorgon LNG project began operations, as the company grappled with new technology and technical problems.

AND FINALLY…

Strut your stuff In Australia, the Morrison government is spending more than A$31 mln on an advertising campaign claiming Australia is “making positive energy” under its leadership and cutting GHG emissions, the Guardian reports. A Senate estimates hearing on Monday was told a second stage of the advertising campaign, which began in December and runs until April, will cost A$17.9 mln (plus GST). It follows A$12.9 mln spent on the first stage which started last September. The campaign, which includes advertisements across the web, billboards and broadcast, print, and social media, says “it’s a fact” that “we’ve made good progress in reducing emissions and switching to renewable energy” and “we’ve got big plans for the future.” However, several of the campaign’s claims are disputed.

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