CP Daily: Monday February 28, 2022

Published 01:37 on March 1, 2022  /  Last updated at 01:37 on March 1, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

US Supreme Court wrestles with EPA’s ability to regulate power sector CO2 output

Republican-led states and coal companies argued before the US’ highest court on Monday that the EPA cannot implement regulations to stimulate a grid-wide shift to low-carbon generation from fossil fuels, while President Joe Biden’s (D) administration and power generators contended the federal government has this authority and should include emissions trading as a key mechanism to achieve this end.

INTERNATIONAL

ANALYSIS: Green hydrogen set for bullish capacity growth, but carbon pricing needed to boost demand

Green hydrogen has the potential to emerge as a key contributor to decarbonisation if expectations for growth in electrolyser capacity and falling costs are met, although accelerated use by industry would still need to be pushed with the broader use of carbon pricing, research analysed by Carbon Pulse has found.

IPCC scientists outline need for world to adapt now to warming

Nearly half the world is highly vulnerable to severe climate risks that in some cases are irreversible, the UN-backed IPCC scientific panel said in a landmark report published on Monday.

EMEA

Euro Markets: EUAs record 7% fall in February amid speculation sanctions may hit Russian gas supply

EUAs closed February with a 7% loss as prices fell sharply on Monday on reports Germany may extend the life of some coal and nuclear power plants, while gas prices spiked by up to 43% as nations extended sanctions against Russia to include some financial networks that may interrupt gas supplies.

EU makes plans for Russian gas cut-off, upholds climate goals

The EU should prepare for a substantial loss of gas supply from Russia in retaliation for the bloc’s sanctions, Energy Commissioner Kadri Simson said on Monday, insisting member states had the means to cope should flows be disrupted.

Germany considering delay to remaining nuke closures amid Russian invasion

Germany is considering delaying the closure of its remaining nuclear plants, economy and climate minister Robert Habeck said Sunday, as the country seeks to bolster its energy supply amid a possible halt in Russian gas imports.

VOLUNTARY

VCM Report: VERs continue slide as Ukraine crisis compounds already-weak market

Voluntary emissions reduction (VER) prices on standardised, exchange-traded contracts continued to slump this week, with nature-tech and tech-based units extending multi-month lows, as an already-weak market came under further pressure amid the uncertainty created by Russia’s invasion of Ukraine.

Broker-linked crypto start-up to go live on Mar. 1, launch fundraiser for offset purchases

A start-up blockchain venture will on Mar. 1 launch a bridge to tokenise carbon offsets from Verra and the Gold Standard, followed by a three-day fundraising event that will go towards initial purchases of real-world carbon credits.

ASIA PACIFIC

China’s emissions intensity drops in 2021 even as coal consumption increases

China took a further step towards meeting its Paris Agreement carbon intensity target last year, despite a bump in coal consumption.

AU Market: ACCUs dip below A$50 on improved supply

Australian carbon credits fell below the A$50 ($35.91) level in Monday trade for the first time since Dec. 22 as an increase in available supply amid some profit-taking continued to weigh on prices.

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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

Germany gets bold – Against the backdrop of the Russian invasion of Ukraine, the German climate and energy ministry has proposed a faster expansion of renewable energy capacity, in order to reach a near 100% renewable power supply by 2035. According to the plans, the country’s renewable energy law (EEG), which had been targeting full renewable supply “before 2050”, will be amended to the new 2035 goal. The law will target a total of 110 GW of onshore wind capacity by 2030 – more than double the amount running at present, 30 GW of offshore wind – almost four times more than the capacity at present, and 200 GW of solar PV capacity – also almost four times the currently-installed total, by the same year. Renewable tender volumes under the EEG will now have to be adjusted to reflect the higher target capacities. With these changes, “Germany is thus consistently aligning the expansion of renewable energies with the 1.5C climate protection path”, said the ministry paper. Government auctions that reward the lowest bid by giving them a guaranteed feed in payment will remain in place. But for ground-mounted solar PV installations, the ministry proposed a gradual phase-in of CfDs for installations. (Clean Energy Wire)

Saudi raising – Saudi Arabia’s sovereign wealth fund (PIF) has laid out plans for raising green debt as the world’s top oil exporter strives to reach net zero carbon emissions by 2060. PIF published its green finance framework that aims to allow it tap world markets to issue debt linked to environmentally friendly goals, including through the sale of green bonds. (Reuters)

Limpopo-a-gogo – South Africa’s Limpopo province has given environmental authorisation to a China-backed proposal to spend more than $10 bln building a 4,600 MW coal-fired power plant, a coking facility and ferroalloy and steel plants. The authorisation backed the establishment of the Musina-Makhado Special Economic Zone. The project  is not factored into the country’s emissions targets and may still be opposed by the government at a national level. (Bloomberg)

AMERICAS

Sale fail – California regulator ARB on Monday posted a notice of a reserve sale to take place at 1000 Pacific time (1700 GMT) on Mar. 30 for the WCI-linked cap-and-trade programme. The ARB is offering the 156.3 Mt sale, limited to participation from California covered and opt-in entities, because the November California-Quebec auction resulted in a settlement price ($28.26) equal to or greater than 60% of the lowest Reserve tier price from the state’s Allowance Containment Price Reserve (APCR), which is set at $46.05 in 2022. Reserve sale applications are accepted through Mar. 10. However, the WCI Q1 current vintage auction this month settled well below the APCR tier at $29.15, and current secondary market prices around this level in the days since the results were published on Thursday suggest the reserve sale may not attract any applicants.

Mighty Bight – The US Bureau of Ocean Energy Management’s (BOEM) largest leasing auction for rights to offshore wind development attracted $4.37 bln in bids over Feb. 23-25 for six areas with an estimated potential for 5,600 to 7,000 MW of development, depending on the efficiency of the turbines. A joint venture of National Grid and RWE Renewables, Bight Wind Holdings, secured the largest of the six sites off the coast of New York for $1.1 bln. Securing other leases were Atlantic Shores Offshore Wind Bight, owned by EDF Renewables and Shell; Invenergy Wind Offshore; OW Ocean Winds East, a joint venture between Engie and EDP Renewables; Attentive Energy, a joint venture between EnBW and TotalEnergies; and Copenhagen Infrastructure Partners’ Mid-Atlantic Offshore Wind. (Utility Dive)

LaBarge and in charge – ExxonMobil has made a final investment decision to expand CCS at its LaBarge, Wyoming, facility, which has captured more CO2 than any other facility in the world to date, the company said Friday. The expansion project will capture up to 1.2 MtCO2, in addition to the 6-7 Mt captured at LaBarge each year. Exxon completed front-end engineering and design work for the project in December and expects to issue the engineering, procurement, and construction contract in March. Pending regulatory approvals, startup is estimated in 2025.

ASIA PACIFIC

Origin(al) idea – Australian energy company Origin unveiled plans on Monday for a potential hydrogen hub in the Hunter Valley, in the Australian state of New South Wales, aimed at delivering a commercial scale green hydrogen supply chain in the Newcastle industrial and port zone, Upstream reports. The port of Newcastle is the world’s largest coal export port. The proposed hydrogen hub would initially produce green hydrogen from a 55 MW electrolyser powered by renewable energy from Origin’s own portfolio, while the design will allow the facility to be scaled up, offering further expansion opportunities.

CCS agreement – Santos, SK E&S, K-CCUS Association, CO2CRC, and Korea Trade Insurance Corporation have signed a memorandum of understanding to support and collaborate in the development of CO2 storage facilities, Offshore Energy reports. The parties agreed to jointly develop CCS projects in Australia and the region, including Bayu-Undan in Timor Leste. CCS at Bayu-Undan would have the potential capacity to store approximately 10 million tonnes of CO2 a year. Santos CEO Kevin Gallagher said the deal highlights growing momentum and action to reduce carbon emissions in the Asia Pacific. “Increased deployment of CCS is critical to achieve the world’s climate goals.”

AND FINALLY…

What’s in a name? – New legislation in California hopes to reduce heat-related deaths by ranking heat waves similarly to hurricanes, by using categories and names. The new legislation proposed in California is in the form of two separate bills with one goal, to create a statewide heat ranking system, similar to the Saffir-Simpson scale used for hurricanes, to better prepare the public. The bills would establish a Chief Heat Officer role, create an inter-agency heat task force and an extreme heat advisory council, and also potentially name heat waves. Naming extreme temperature events could begin as early as this summer. (CNN)

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