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TOP STORY

Euro Markets: EUAs suffer largest-ever one-day fall amid widespread liquidations

EUAs suffered their biggest ever one-day fall in absolute terms as investors rushed for the exit amid suspected selling by Russian investors, a spare of triggered stop-losses, and concerns that the ETS may not be a priority for the EU in the coming months as efforts to end the conflict in Ukraine and tackle soaring energy prices take precedence.

EMEA

EU lawmaker rift widens over carbon border plans

European parliamentarians remain deeply at odds over a planned carbon border adjustment mechanism (CBAM), as a key cross-party group failed to agree a united line this week.

Brussels revises energy plan amid tougher stance towards windfall profits

A strategic document on how the EU could tackle surging energy prices and increase carbon market oversight has been delayed by a week, as Brussels officials craft bolder plans in light of the heightened risk of disrupted gas supply from Russia.

Italian business lobby calls for temporary suspension of EU ETS

Italy’s main business lobby Confindustria on Tuesday called for a temporary suspension of the EU carbon market and for climate policy proposals to be revised, a sign of increasing pressure on business amid surging energy costs and the heightened risk of gas supply cuts from Russia.

AMERICAS

NA Markets: CCAs crash 10% as Ukraine crisis routs EU carbon, equities

California Carbon Allowance (CCA) prices fell by as much as 10% on Tuesday morning, as the financial impacts from Russia’s invasion of Ukraine caused a precipitous fall in EU carbon and global equity prices and spread into the North American programme.

ASIA PACIFIC

Japan’s domestic offset prices spike as voluntary market start draws nearer

Japan’s latest auction of domestic carbon credits cleared at record high prices this week, as government plans to set up a voluntary carbon market and businesses looking to offset their emissions footprint are pushing market prices up.

Australian power and upstream gas players make up top ten emitters list

Big utilities that own coal generators and upstream oil and gas players with LNG facilities form the top ten list of Australia’s largest corporate greenhouse gas emitters, data released from a federal government agency has shown.

INTERNATIONAL

Carbon loss from deforestation estimated to have doubled over the last two decades, research finds

The annual level of carbon loss caused by the conversion of tropical forests to other land uses, such as agriculture, has doubled over the last 20 years, highlighting the need to implement strategies at a global scale to prevent further deforestation, a study has concluded.

VOLUNTARY

Canada-based VER investor signs deal targeting 70 mln blue carbon offsets

A Canadian alternative ESG investor announced a streaming agreement with a mangrove restoration developer on Tuesday that could generate over 70 million voluntary emissions reductions (VERs) over the life of the projects.

COMMENT

Higher carbon prices – is speculation truly to blame?

The higher EU ETS carbon prices of the last three months have caused cross-sectoral concern. Many are placing unsubstantiated blame on speculative trading. But with speculation a minor problem at best, Agnese Ruggiero of Carbon Market Watch asks whether flooding the market with more carbon allowances is a solution or a dangerously reckless move.

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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

INTERNATIONAL

Exxon’s exit – Exxon Mobil says it will shut down its Russian oil production after Vladimir Putin’s unprovoked attack on Ukraine. The Texas-based energy company announced that it would end its involvement in developing the gas-rich Sakhalin project along with state-controlled company Rosneft, as well as partners from India and Japan. The move follows similar decisions made by BP and Shell. Exxon had operated in Russia for more than 25 years, but began to withdraw from the country following the 2014 invasion of Ukraine. The company said that although it will not be able to quit Russia immediately, it will make no new investments there. Recent developments could also put at risk Russia’s plans to pilot a regional carbon market at Sakhalin. The first units from the programme had been scheduled to be traded from mid-2022, with the aim to support the island’s objective to become carbon neutral by as early as 2025. (Independent)

EMEA

Calling for divestments – Deputy minister of environmental protection of Ukraine Roman Shakhmatenko called for divestment from fossil fuels in his official speech at the UN environment assembly on Tuesday. “Today, every country in the world must make an effort to stop Russia’s invasion of Ukraine, which has the potential to lead to a global catastrophe,” Shakhmatenko said. “We call for an immediate global withdrawal of assets from all companies involved in the extraction, supply, processing and distribution of Russian fossil fuels, which direct billions of dollars to escalate two potentially deadly threats to the planet – Putin’s military machine and exacerbate the climate crisis.” Norway’s $1.3 trillion sovereign wealth fund and oil majors BP, Equinor, and Shell have decided to quit their Russian operations, while others may follow suit in the coming days.

Taxing the spike – The European Commission will propose that EU countries tax profits made from recent gas price spikes and use the cash to invest in renewable energy and energy-saving renovations, Euractiv reports. European gas prices soared to record highs last year and have stayed high since, spiking again on Monday amid concerns that there would be supply disruptions after Russia – Europe’s top gas supplier – invaded Ukraine. Next week, the EU executive will publish proposals to reduce Europe’s reliance on imported gas and make countries’ energy systems more resilient in the face of supply shocks or price spikes. The proposals would encourage national governments to tax the windfall profits some energy companies have made from high gas prices and invest the proceeds in expanding renewable energy or measures to curb energy use, such as insulating homes, sources familiar with the plans said. Countries could also use the proceeds to support consumers and industries hit by high electricity prices, so long as such compensation does not distort the EU market. The proposal, which could change before publication, would not introduce an EU-wide tax. Instead, it would tell governments they can raise such levies on a national level without falling foul of EU rules. Governments in nearly all of the EU’s 27 member countries are already using emergency measures like tax breaks and subsidies to shield households from higher energy bills, mainly driven by soaring gas prices. Last year, Spain’s government tried to tax profits from energy companies it deemed to have benefited from higher gas prices but scaled back the measure, which faced resistance from utilities.

ASIA PACIFIC

Viva hydrogen – With the help of the Australian Renewable Energy Agency – refiner Viva Energy will open one of Australia’s first hydrogen refuelling stations dedicated to serving heavy vehicle fleets, as part of a planned ‘New Energies Service Station,’ The Driven reports. But while the measure is being touted as an effort to reduce transport emissions, the hydrogen refuelling station will, at least in part, be used in the transport of petrol from Viva Energy’s Geelong refinery to a network of Shell petrol stations. Australia currently lacks large scale and publicly available hydrogen refuelling infrastructure, but Viva Energy’s A$43.3 million project will involve the installation of a 2 MW electrolyser, hydrogen compression, storage, and dispensing equipment.

Setting up shop – Japan’s Jera announced that is has established a full-scale operations base in Vietnam as it considers developing several LNG-to-power projects in the country, Energy Voice reports. Significantly, Japan is making a concerted effort to penetrate the emerging Asian markets for LNG as demand booms, such as Vietnam, particularly within the power sector. Jera, a 50-50 joint venture between Tokyo Electric Power Company and Chubu Electric Power, is reportedly partnering with ExxonMobil for a large LNG-to-power project in Vietnam.

Hydrogen trio – Yamanashi Prefecture, TEPCO, and Toray Industries, have established Japan’s first power to gas business company, the Yamanashi Hydrogen Company (YHC). YHC will engage in the technological development, production, and sale of hydrogen, with operations to begin in April 2022 (TEPCO).

Woodside win – The Conservation Council of Western Australia has lost a bid to overturn environmental approvals vital to Woodside’s Scarborough natural gas project, in part because of a delay in commencing the legal action, WA Today reports. WA Supreme Court Justice Jeremy Allanson on Tuesday said in his published decision that in his opinion “the delay in this case is properly characterised as excessive and unwarrantable”.

In principle – China will in principle not build any more new coal power projects that are for power generation purposes only, the National Energy Administration has said. However, the ban does not apply to power plants that serve the purpose of guaranteeing energy security or helping integrate renewables, leaving some uncertainty as to how effective it will be. China approved new coal-fired power plants with a total capacity of 7.3 GW in the first six weeks of the year.

Seed money – The Clean Energy Finance Corporation – a green investment vehicle operated by the Australian government – has invested A$1.6 mln ($1.16 mln) in UK-based Downforce Technologies, it said Tuesday. Downforce is working on a product that it says can measure soil organic carbon with extremely high levels of accuracy. That’s a good fit Australia’s ambitious soil carbon plans, which it has identified as one of five key technologies to help decarbonise the economy over the next decades. Australia has approved over 200 soil carbon offset projects, but hardly issued any credits, with accurate measurements one of the key obstacles.

Acquisition – Global sustainable advisory firm ERM has acquired Australia’s Point Advisory, it announced on Tuesday. The Australian outfit is offering a wide range of climate change-related services, and is the latest in a growing number of climate companies in the country being bought by overseas entities. However, NatureCo, an offset project developer established last year by Point Advisory and Biodiverse Carbon, was not included in the acquisition, and will continue to operate independently.

AMERICAS

Last gasp effort – US President Joe Biden will call on Congress to revive stalled climate legislation in Tuesday’s night’s State of the Union address, pitching a package of tax credits and climate spending as a way to battle inflation and save the average American family $500 per year. Biden is not expected to explicitly lay out an alternative legislative vision, according a senior administration official who requested anonymity to discuss the preparations told Bloomberg. Instead, he’ll describe fighting climate change as integral to boosting middle class finances. The proposal comes after Biden’s sweeping Build Back Better economic package – which included tax credits for renewable power and clean energy manufacturing – that coal-state Senator Joe Manchin (D) blocked last year.

Scoping Plan pathways – California regulator ARB on Monday announced it will hold a virtual public workshop Mar. 15 at 830 Pacific time (1530 GMT) to present initial modelling results for the state’s 2022 Scoping Plan. The ARB in December said it would model four scenarios to illustrate the effectiveness of deployment of different technologies and clean energy in achieving the state’s climate goals, including California’s existing economy-wide CO2 neutrality by 2045 and an even more ambitious 2030 carbon neutrality target. In a parallel effort, the ARB developed and is modelling various land management scenarios to help develop targets for California’s Natural and Working Lands (NWLs), the initial modelling results of which will also be presented at the workshop.

Give it to Guyana – The Guyanese government has released a request for proposals for transactions of national-scale deforestation reduction credits generated under the Architecture for REDD+ Transactions (ART) programme. The ART secretariat in October approved The REDD+ Environmental Excellency Standard (TREES) documents submitted by Guyana, and verification and validation of processes are currently underway. Proposals are accepted until Mar. 14.

VOLUNTARY

Cash to spend – Nori, a blockchain-based company funding carbon offset projects and selling the resulting credits on-chain, has raised $7 mln in a Series A funding round led by investor M13 and joined by the Toyota Ventures Climate Fund. Nori is one of a number of blockchain-based carbon firms to have announced similar funding results recently. So far, around 75,000 of its credits – NRTs – have been retired, though the company has been criticised for not applying additionality tests for the land-based projects it backs.

AND FINALLY…

Small potatoes – US oil refiner Phillips 66 on Monday announced that it intends to reduce its Scope 1-2 emissions by 50% below 2019 levels by 2050, building on the company’s existing 2030 target. However, the Houston-based company does not have a GHG reduction target for its Scope 3 emissions from the products it sells. Phillips 66’s Scope 1-2 emissions totalled 35.7 MtCO2e in 2019, less than a tenth of its Scope 3 footprint of 372 Mt, according to a company presentation. The firm last year set “impactful, attainable and measurable targets” for 2030, including a 30% cut to scope 1 and scope 2 emissions intensity from operations and a 15% cut to scope 3 emissions intensity of its energy products, all compared to 2019 levels.

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