CP Daily: Tuesday February 15, 2022

Published 23:25 on February 15, 2022  /  Last updated at 23:25 on February 15, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

PREVIEW: After Q4 shocker, traders say February WCI auction primed for normality

WCI carbon market participants believe the Q1 sale on Wednesday will clear much more in line with historical levels after a massive discount in November, though they are less sure if the current vintage auction will settle at a premium or discount to the secondary market price.

EMEA

EU business groups warn against ‘hurried’ carbon market intervention

The EU should hold off on proposing any EU ETS intervention until the bloc’s financial watchdog ESMA publishes a report on market behaviour, ten lobby groups urged on Tuesday, while Poland reiterated its call for Brussels to step in.

Euro Markets: Carbon dips amid volatile energy markets as intervention calls grow

Carbon prices were volatile on Tuesday as gas and power markets plunged on reports that some Russian troops were moving away from the border with Ukraine, while calls for and against intervention in the EU ETS grew ahead of the publication of European Parliament proposals to reform to the market.

Engie reports 8% drop in EU fossil generation for 2021, as renewables output jumps 50%

French utility Engie reported an 8% slump in EU ETS-covered coal and gas generation in 2021, it said in full-year results released on Tuesday that flagged new hydro capacity and high nuclear availability.

One of the most bullish EU ETS analysts parts ways with German bank

One of the most bullish EU ETS analysts has resigned from a German investment bank to increase his focus on carbon, Carbon Pulse has learned.

ASIA PACIFIC

Mitsui teams up with Gazprom Neft for CCS collobaration, explores framework for carbon credits

Japanese conglomerate Mitsui has teamed up with Gazprom Neft, the oil-producing, refining and retail fuel arm of Gazprom, in an agreement to promote the use of CCS in Russia and other countries where the two companies can collaborate, it was announced on Tuesday.

Steelmaker Nippon eyes offshore CCS hub project in Australia

Japanese industrial giant Nippon Steel has signed an agreement to evaluate the feasibility of capturing and transporting up to 5 million tonnes of CO2 per year to an Australian offshore floating CCS project, Japan’s biggest steelmaker announced.

VOLUNTARY

Global banks join voluntary carbon trading platform venture

Three large banks have joined a venture launched by a group of regional financial institutions last year to launch a global voluntary carbon trading platform before the end of the year.

South Pole buys Swedish consultancy to add to its European acquisitions

Offset developer and consultancy South Pole has bought a Swedish consultancy, it said on Tuesday, the latest of its acquisitions as it aims to keep pace with the rapid growth in corporate climate action.

AMERICAS

BC LCFS ekes out credit surplus in 2020 amid pandemic, renewable diesel flow

The British Columbia Low Carbon Fuel Standard (BC-LCFS) recorded its first credit surplus in four years during 2020 amid a drop in petroleum-based fuel consumption and spike in renewable diesel supply, according to provincial data released Monday.

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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

AMERICAS

Oil change – The Alberta government will toughen its industry production benchmarks for oil sands mines, closing a loophole that rewarded some of Canada’s highest-emitting facilities with millions of dollars’ worth of tradable credits, the province’s environment ministry told Reuters. Mines and upgraders collectively generated 2.4 million emissions performance credits in 2020 but were only required to pay for 700,000 tonnes of emissions, coinciding with Alberta Premier Jason Kenney’s government weakening industry production benchmarks under the first year of its market-based Technology Innovation and Emissions Reduction (TIER) regime, according to public government figures. Alberta’s changes will mean that mines and upgraders will no longer financially benefit from their emissions when they account later this year for their 2021 performance, the sources said. Ottawa has deemed TIER equivalent to the federal ‘backstop’ output-based pricing system, but is strengthening national criteria starting in 2023 and expects provinces to propose changes to their systems soon to comply, said a spokesperson for Canadian environment minister Steven Guilbeault.

Clean collection, part I – US President Joe Biden’s administration announced a series of measures on Tuesday to support American leadership on clean manufacturing. The Department of Energy announced major clean hydrogen initiatives from the 2021 bipartisan infrastructure law, including $8 bln for Regional Clean Hydrogen Hubs and $1 bln for a Clean Hydrogen Electrolysis Program. The White House Council on Environmental Quality issued new guidance on responsible deployment of CCUS to protect communities from pollution impacts and factor in environmental justice considerations. The Council on Environmental Quality and White House Office of Domestic Climate Policy also announced they are establishing the first-ever Buy Clean Task Force, which will utilise the federal government’s purchasing power to support low-carbon materials made in US factories.

Clean collection, part II – The US clean energy sector installed nearly 28 GW of new utility-scale wind, solar and energy storage capacity last year, according to a new quarterly market report from the American Clean Power Association released Tuesday. While that marks the second-largest year on record for those combined installations, ACP said it is just 45% of what’s needed annually to achieve a zero-emissions grid by 2035. The US now has more than 200 GW of clean power capacity, the report found, or enough to power 56 mln homes. But there was also a 3% decline for clean energy installations in 2021 when compared to the previous year. More than 11.4 GW of projects that were originally expected to come online in 2021 have slipped to this year or 2023 due to issues related to trade policies and a lack of regulatory or policy certainty. (Politico)

CBAM centre – The Climate Leadership Council, a GOP-backed group supporting a carbon tax, on Tuesday announced it is launching a new research centre to explore how the US could impose a carbon border adjustment mechanism (CBAM) or other policy to punish imports of high-polluting goods. The Council is bringing a trio of experts focused on the nexus of climate and trade to be co-chairs of the centre: Charlene Barshefsky, former US trade representative under President Bill Clinton; Jim Connaughton, who led the White House CEQ during the Bush administration; and Jennifer Hillman, former member of the US International Trade Commission. (Politico)

ASIA PACIFIC

Gaslighting climate – Australian LNG exports are not clean, not cheap, and are not materially displacing coal in Australia’s largest export markets, according to a report from the Australasian Centre for Corporate Responsibility (ACCR). The report’s findings are in direct contrast to the Australian LNG industry’s spurious claims that gas has a role to play in the transition to a low carbon economy, according to ACCR. “The lack of transparency, including the deliberate use of out-of-date International Energy Agency data in scenario analyses, and lip service to the objectives of the Paris Agreement, make it very difficult for shareholders to assess the future earnings and value of companies such as Origin Energy, Santos, and Woodside. This report helps arm investors with reliable information to challenge the pervasive greenwashing of gas,” ACCR stated.

A great way to fly – Singapore’s Changi Airport could be a regional hub for hydrogen fuel by 2035, following a 2-year feasibility study inked on Tuesday, Business Times reports. The agreement to jointly study the potential for a future hydrogen hub was signed by European plane maker Airbus, the Civil Aviation Authority of Singapore (CAAS), Changi Airport Group (CAG) and industrial gases group Linde at the Singapore Airshow 2022. This follows a similar agreement Airbus signed last week with Incheon International Airport and other parties to explore the use of hydrogen in South Korea’s airport. Noting that the technology of hydrogen fuel is ready, Airbus’ Sabine Klauke, the company’s chief technical officer, said it is critical to get the necessary infrastructure and ecosystem in place so that the first zero-emission aircraft based on hydrogen can be deployed by 2035.

Flawed figures – The Indian government is using flawed forest data to falsely claim that it is making progress towards its climate goals and curbing deforestation, experts have warned. According to India’s latest State of the Forest report, India’s overall forest cover increased by 1,540 square kilometres between 2019 and 2021, while its tree cover increased by 721 sq km. But plantations, orchards, and urban green areas are misleadingly counted as forest, while mature forests are being cleared for industrial use. (Climate Home)

EMEA

Finnish fidelity – The expert climate change panel advising the Finland government has published its assessment of climate actions in non-ETS sectors, which is set to be negotiated among political parties over the next month. It remains confident that the government can achieve carbon neutrality by 2035, though said the government should introduce or prepare measures that reduce emissions by roughly 1 MtCO2e to guarantee the target is met. If emissions don’t start declining, a transport ETS should be launched by 2026, it added. The panel also expressed its concern about the preservation of carbon sinks, reflecting market-based fluctuations in logging activity. (Helsingin Sanomat/Helsinki Times)

Woodwinked – Wood burners emit more particle pollution than traffic, according to UK data, the Guardian reports. Wood burning in homes produces more small particle pollution than all road traffic in the UK, according to revised government information. The new data significantly cuts the estimated proportion of small particle pollution that comes from wood burners from 38% to 17%, but wood burning remains a “major contributor” to particle pollution, another government report said. Road transport is responsible for 13% of all particle pollution. The data shows tiny particle pollution produced by wood burning rose by a third from 2010 to 2020, when it reached 13,900 tonnes a year. This all comes from the 8% of homes that have wood burners, 95% of which have other sources of heating. The data revision was made after a survey of 50,000 homes provided updated information on the use of wood stoves.

SCIENCE & TECH

High and driest – The American West’s mega-drought deepened so much last year that it is now the driest in at least 1,200 years and is a worst-case climate change scenario playing out live, a new study found. A dramatic drying in 2021 – about as dry as 2002 and one of the driest years ever recorded for the region – pushed the 22-year drought past the previous record-holder for mega-droughts in the late 1500s and shows no signs of easing in the near future, according to a study Monday in the journal Nature Climate Change. The study calculated that 42% of this mega-drought can be attributed to human-caused climate change. (AP)

Forlorn about corn – Corn-based ethanol is likely a much bigger contributor to global warming than straight gasoline, according to a study published Monday. The study, published in the Proceedings of the National Academy of Sciences, contradicts previous research commissioned by the US Department of Agriculture showing ethanol and other biofuels to be relatively green. The research, which was funded in part by the National Wildlife Federation and US Department of Energy, found that ethanol is likely at least 24% more carbon-intensive than gasoline due to emissions resulting from land use changes to grow corn, along with processing and combustion. (Reuters)

AND FINALLY…

That’s rich – Eradicating extreme poverty would raise global emissions by less than 1%, according to research published in the journal Nature Sustainability. The study highlights the global inequality in emissions between people in rich and poor countries. For example, it finds that the average carbon footprint of a person living in sub-Saharan Africa is 0.6 tCO2 a year, while the average US citizen produces 14.5 tCO2. The authors found that the average carbon footprint in the top 1% of emitters was more than 75-times higher than that in the bottom 50% and emphasises the need to reduce emissions from the super-rich to mitigate climate change. (Carbon Brief)

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