CP Daily: Tuesday February 22, 2022

Published 02:31 on February 23, 2022  /  Last updated at 02:31 on February 23, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

Experts fear carbon finance stand-off amid vague UN Article 6 guidance

Investments in carbon-cutting projects worldwide risk being delayed amid a lack of guidance on how countries should adjust for carbon credits generated on their territories, experts told an online panel on Tuesday.

EMEA

EU seeks to force large companies to check suppliers’ climate credentials -leaked draft

The European Commission aims to oblige big companies to align their supply chains with 1.5C global warming limits, according to a draft bill set to be unveiled on Wednesday that could have an impact far beyond the bloc’s borders and even spur corporate demand for carbon credits.

Euro Markets: EUAs recoup early losses as Russia war fears send energy soaring

EUA prices clawed back an early drop amid wider strength across the energy complex on Tuesday after Russia paved the way for military forces to enter Ukraine, prompting Germany in response to halt work on approving the Nord Stream 2 gas pipeline.

ASIA PACIFIC

Chinese investors, financials likely to be introduced to country’s ETS in H2 -exchange official

Some Chinese institutional investors and financials might be given access to trade in China’s national emissions trading scheme in the second half of the year, an official with the Shanghai Environment and Energy Exchange said this week, though it remains unclear exactly when such firms would be able to open their trading accounts.

Shanghai to roll out regional offset scheme, complement CCERs

Shanghai will establish its own regional carbon offsetting scheme that over time will be linked to the city’s emissions trading scheme, the municipal government has announced.

NZU holdings rise by 6.6 mln in Q4 with speculator positions steady

The total number of NZUs held in the national registry rose to 157.7 million in the fourth quarter of 2021, an increase in the number of overall holdings of around 6.6 mln, according to data released by the New Zealand Environmental Protection Agency.

AMERICAS

California November gasoline usage stays beneath pre-pandemic levels, diesel hits monthly high

California gasoline consumption in November remained in the same range below pre-COVID levels that has persisted since the spring, while diesel usage accelerated to an all-time record for the month, according to recent state data.

VOLUNTARY

IncubEx, Trayport set Mar. 25 launch for spot VER marketplace

Environmental products development firm IncubEx and energy trading platform Trayport will launch their new voluntary emissions reduction (VER) marketplace on Mar. 25, the companies said Tuesday.

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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

Lending leverage – HSBC aims to cut absolute emissions associated with loans made to its oil and gas clients by 34% this decade, the bank’s sustainability chief Celine Herweijer told Reuters, marking the first time that Britain’s biggest lender with a major presence in Asia has committed to such a target. More than 100 banks have pledged to reach net zero carbon emissions by 2050 and are under pressure to provide details on the deep shorter-term cuts to “financed emissions” that are needed if banks are to have any chance of meeting their goal.

Rosneft capture – Rosneft plans to build three ССS hubs by 2030 as part of a strategy that will see Russia’s largest oil producer become carbon-neutral by 2050, its first vice president Didier Casimiro told reporters on Monday before Russia’s ramping up of aggression against Ukraine. Casimiro added that the company was aiming to reach its target for the share of the natural gas in overall production “regardless of export potential.” Rosneft approved a new strategy targeting net zero emissions by 2050 in December. Under the strategy, the share of natural gas in total hydrocarbon production will grow to 25% by 2025. (Reuters)

Oil expansion – Britain sees a “good, solid” future for the North Sea’s oil and gas industry and will issue new licences to expand output in the future, the country’s “clean growth” minister Greg Hands told a conference. The British government will hold new licencing rounds to explore for more oil and gas resources and ensure that they are “compatible” with the country’s climate obligations to cut GHG emissions, he added. (Reuters)

Portugal posse – An industry consortium led by power company Rega Energy and cement firm Cimpor aims to deploy by 2023 infrastructure for its upcoming NGHV green hydrogen plant in Portugal, including a dedicated 40 MW solar-powered electricity grid. It will commission its first green hydrogen plant by 2026, creating 140 new jobs, it said. The consortium aims subsequently to scale up the plant to a renewable power consumption of 600 MW. It hopes that, when fully commissioned, the NGHV plant will be a reference project for green hydrogen production. (Global Cement)

AMERICAS

Access denied – The US Supreme Court has rejected a case by the Dakota Access oil pipeline operator to avoid a legally mandated environmental review, in a major victory for tribes and environmentalists campaigning to permanently shut down the polluting energy project. Energy Transfer, the pipeline operator, had sought to overturn a legal victory won by the Standing Rock Sioux Tribe in 2020 that struck down a key federal permit that violated the National Environmental Policy Act (NEPA). On Tuesday the US supreme court rejected the company’s bid to challenge the 2020 ruling, which required the US army corps of engineers to conduct a comprehensive environmental impact statement. As a result, the lower court’s decision remains intact and the army corps must complete a review of the pipeline’s route underneath Lake Oahe, which straddles the border of North Dakota and South Dakota, that complies with NEPA. The ruling signals the end of the litigation road for the Texan energy company, but the pipeline, known as DAPL and open since 2017, will continue to operate as the review is carried out. (Guardian)

Let the SCC be – The Biden administration isn’t happy about a federal court’s injunction that blocked its social cost of carbon, warning the judge in a petition that it’s already messing up a massive array of agency projects and regulations – including oil and gas operations on federal lands. As Politico reports, the Feb. 11 ruling by Judge James Cain called the administration’s draft tool used to gauge the GHG implications in rulemakings an overreach, and it halted it from further employing the tool. Already, the administration wrote in a request to stay the ruling, the court’s move has disrupted pending regulations at DOE, EPA, DOT and DOI, froze billions of dollars in grants, and disrupted an international collaboration with Canada to harmonise the two countries’ SCCs. The administration is also saying that the ruling, which was intended to curb environmental reach, will force it to once again put a pause on oil and gas lease sales. And a DOI spokesperson said Saturday the injunction would have an even deeper impact, causing a slowdown in issuing permits to drill given that the department had been incorporating the social cost of carbon into its process per a Bureau of Land Management notice in October. According to Politico, this is sure to anger industry officials and Republicans, who had been irked with the department’s previous moratorium on lease sales that was ended by a federal court. The sector had also benefited from the speedy drilling permit approvals the Biden Interior Department had been issuing, which may now be threatened. It will even take time to discern whether the administration is bluffing, given that the administration plans to appeal Cain’s decision.

Not so green gables – The Canadian province of Prince Edward Island (PEI) will table a bill this spring outlining an increase to its carbon price applied to fuels such as gasoline, Saltwire reports. The previous Liberal government negotiated a carbon pricing equivalency agreement with the federal government in 2018, where PEI was able to offset much of the carbon tax by lowering provincial gas excise taxes. This meant that PEI drivers saw only a one-cent-per-litre increase in gas prices in 2019 and another one-cent-per-litre increase in 2020. This agreement expired in March 2021, and with negotiations delayed and the policy stalled, the province is facing pressure to bolster their policy or risk the federal government imposing their backstop $50/tonne price as of April, an outcome that would remove provincial spending power for generated revenues.

ASIA PACIFIC

Tasmanian deal – Rio Tinto has signed a deal with the Tasmanian state government in Australia that secures the long-term future of the Bell Bay aluminium smelter, Renew Economy reports, and will look to onsite electrolysers for hydrogen production to boost the demand for new renewables in the island state. Under the MoU with the state government, Rio Tinto has committed to continue running the Bell Bay smelter until at least 2030, while it looks to longer term arrangements, including a potential expansion of its smelting operations. Rio Tinto has agreed to prepare a business case for the production of hydrogen onsite, using electrolysis, with the aim of replacing existing supplies of fossil gas – and will prepare similar plans for incorporating the smelter in a potential demand response mechanism.

Coal crisis – Australian billionaire Mike Cannon-Brookes has hit back at a veiled threat by Prime Minister Scott Morrison to potentially block his proposed $3.6 bln joint takeover with Brookfield Asset Management of the big utility AGL Energy, arguing a faster switch from coal to renewables would cut power prices and not destabilise the grid, the Australian Financial Review reports. The Morrison government has reserved the right to invoke energy supply concerns under a national interest test to potentially stop the bidders who have pledged to shut down coal-fired power about a decade earlier than planned. In a speech last year to the Business Council of Australia, however, Morrison stated that meeting climate change ambitions can be done with the commercialisation of low emissions technology. Australia would meet its ambitions, he said in April 2021, “with the smartest minds, the best technology, and the animal spirits of capitalism.”

Map flap – A prison, a group of mansions, a missile manufacturer and a naval base are among the urban areas categorised as ‘forest’ by the Indian government, a Climate Home analysis of satellite imagery reveals. The UN Food and Agriculture Organisation (FAO) guidelines say forests are defined by the “presence of trees and the absence of other predominant land uses”. It adds: “It does not include land that is predominantly under agricultural or urban land use”. Indian forestry experts have accused successive governments of exaggerating the extent of India’s forest cover in order to make it easier to meet climate targets and access more climate finance for protecting forests. For the first time, the government’s latest bi-annual ‘State of the Forests report’ (ISFR) maps what it regards as forestry cover in India’s seven biggest cities. An area of land over one hectare with as little as 10% canopy density is included in the tally. According to the ISFR report, 5% of the city of Hyderabad is now covered with forest. This is more than double the level recorded of 2011. This rise drew praise from within India and abroad. “Congrats Hyderabad!”, tweeted the president of the Green Belt and Road Institute Erik Solheim. But comparing the ISFR’s map of Hyderabad with satellite imagery from Google Earth shows that among the areas counted as medium density forests are the campus of Osmania University and the area known as “lab quarters” centred around headquarters of Indian missile manufacturer Bharat Dynamics.

VOLUNTARY

Hello Tullow – Tullow Oil has signed a Memorandum of Understanding with Ghana’s Forestry Commission to identify and develop carbon offset projects that will support both the realisation of Tullow’s 2030 net zero plans and the government of Ghana’s Nationally Determined Contributions under the Paris Agreement. Pursuant of the MOU signed, the two organisations will collaborate to develop projects which will enhance the conservation of existing forest and increase forest stocks in line with Ghana’s REDD+ strategy. In addition to the company’s commitment to decarbonise operational assets and eliminate flaring by 2025, the identified carbon offset project will form part of Tullow’s strategy to attain net zero on its scope 1 and 2 emissions by 2030. The carbon offsets will compensate for the residual, hard to abate emission,” Tullow said in a press release. With this programme, Tullow is aiming to offset a minimum 600,000 tonnes per annum, eventually rising to 1.2 Mt per year. Tullow Ghana’s Deputy Managing Director Cynthia Lumor said the company was committing $37 mln to decarbonise the company’s gas capacity in Ghana’s Jubilee and Ten fields. (Ghanaweb)

That’s Rad – Calgary-based Radicle Group has entered into a long-term offtake agreement with Everland LLC for carbon credits from Wildlife Works’ Kasigau Corridor REDD+ project. Radicle said revenue from the sale of offsets will enable “sustainable development opportunities for the local community while protecting the area from deforestation”. “Radicle is a significant financial contributor to this project. Offset purchases provide the local community with a guaranteed revenue stream that flows directly into project operations and enables Radicle to provide their clients with impactful, high-quality credits.” Located in Kenya, the Kasigau Corridor project protects over 200,000 hectares of dryland forest and over 11,000 wild elephants that live in the ecosystem. The project avoids 1.7 Mt of CO2 per year. The project also provides social programs that benefit over 116,000 local people.

AND FINALLY…

That’s some good news – Japan’s Toho Gas and Masahide Seisakusho have cooperated to develop a high-efficiency burner for commercial kitchen noodle cookers that can cut CO2 emissions by 5%, they announced Tuesday. Its first customer will be Hanamaru Udon, a noddle chain with around 460 establishments across Japan. Hanamaru will introduce the new cooker gradually and expects to save 3,000 tCO2/year.

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