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TOP STORY

ANALYSIS: Bearish EUA fundamentals to prevail in event of Russian supply cut

EUAs are likely to continue to face bearish pressure as prospects for industry slowdowns outweigh any increased coal and oil burn to cover Russian gas supply disruptions, analysts told Carbon Pulse.

EMEA

Euro Markets: EUAs claw back 20% price plunge to end slightly lower as energy markets rocket

EU carbon prices rallied to close just 0.5% lower on the day after crashing by as much as 20% for a second session as investors and traders continued to liquidate positions, while energy prices extended their gains amid fears that sanctions will cut off Russian energy supplies to western countries.

Brussels poised to extend indirect ETS compensation provision -leaked draft

The European Commission is making plans to expand the number of industries eligible to receive indirect ETS cost compensation under state aid guidelines, according to a leaked draft seen by Carbon Pulse on Wednesday that signals an apparent U-turn in policy.

Major business group urges UK govt for climate policy certainty to unlock new investment

Businesses involved in the UK Emissions Trading Scheme have criticised the British government over a lack of visibility regarding potentially significant climate policy changes, which they say is hindering post-Brexit investment.

ASIA PACIFIC

Papua New Guinea to put moratorium on REDD+ projects for voluntary market

Papua New Guinea will impose a moratorium on all new REDD+ projects for the voluntary carbon market, its climate change minister said Wednesday, potentially scuppering investor plans to launch projects that may have created millions of credits each year for decades.

Australia Market Roundup: Usher, Rio Tinto claim large offset volumes as supply outlook brightens further

Agricultural firm Usher Pastoral and miner Rio Tinto received large batches of Australian offsets this week, adding to a trend of improved supply that continues to put downward pressure on prices.

AMERICAS

More bearish California LCFS signals ahead as Neste, Marathon announce joint RD venture

Finnish biofuel company Neste Corporation on Tuesday announced a joint venture to produce renewable diesel (RD) at Marathon Petroleum Company’s forthcoming facility, which traders said could weigh even more on California Low Carbon Fuel Standard (LCFS) credit prices that are already sitting at four-year lows.

New York biomass facility misses fifth straight RGGI compliance deadline

A biomass-fired power facility in New York did not surrender any allowances for the RGGI programme’s 2021 interim compliance deadline, marking the fifth straight year in which it has failed to comply, according to CO2 Allowance Tracking System (COATS) data published Wednesday.

Massachusetts power generators meet GWSA cap-and-trade compliance obligations

All generators regulated under Massachusetts’ Global Warming Solutions Act (GWSA) power sector carbon market complied by the Mar. 1 deadline for 2021 emissions, according to a state agency.

ExxonMobil to build hydrogen, CCS facility at Texas downstream complex

US oil major ExxonMobil plans to develop hydrogen production and CCS operations at its integrated refining and petrochemical project in Baytown, Texas, the company has announced.

ESG marketplace operator Xpansiv to acquire offset registry administrator APX

ESG commodity marketplace operator Xpansiv has agreed to acquire US-based carbon offset registry administrator APX, the companies announced Wednesday.

US forestry VER marketplace closes $50 mln capital raise as it targets international expansion

A San Francisco-based climate tech company on Wednesday announced a $50 mln fundraise that will grow its forestry-based voluntary emissions reduction (VER) marketplace, though the firm has drawn criticism from researchers over its alternative approach for measuring temporary CO2 storage.

ICIS pulls plug on US carbon analytics service

Market intelligence firm ICIS has pulled the plug on its US carbon analytics service, Carbon Pulse understands.

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Premium job listings

• *Climate Change and Energy Advisor, Mineral Products Association – London
• Manager, Market Development, Family Forest Carbon Program, American Forest Foundation – Washington DC
• Northeast Director, Family Forest Carbon Program, American Forest Foundation – Northeast US
• Legal Director, Verra – Remote
• European Policy Director, International Emissions Trading Association (IETA) – Brussels
• Investment Analyst, Environmental Commodity Partners (ECP) – Mill Valley, California
• Managing Director, Verra – Remote
• Chief Communications Officer, Verra – Remote
• VP/MD, Carbon and Environmental Product Strategist, Macro Commodities Research, Goldman Sachs – London
• Carbon Offset Project Development Manager, Carbon Royalty Corp. – Flexible Location
• Product Manager, SustainCERT – Ideally Luxembourg/Amsterdam
• Senior Business Development and Key Account Manager, SustainCERT – Amsterdam
• Business Development Manager Environmental Markets, SustainCERT – Ideally Amsterdam/Europe
• Innovation Manager, SustainCERT – Luxembourg/Amsterdam/Remote
• Director of Value Change Initiative Partnerships, SustainCERT – Netherlands
• Certification Officer Value Chain, SustainCERT – Flexible (Ideally America)
• Certification Officer, SustainCERT – Asia (Preferably India)
• Sales Support Officer, SustainCERT – New York City
• Communications Manager, SustainCERT – Flexible (Ideally Amsterdam)
• Manager, Asia-Pacific, Verra – Remote
• Director, Financial Innovations, Verra – Remote
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CONFERENCES

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

City Week 2022: Resetting Priorities for a Better Future – Apr. 25-27 at London Guildhall: Now in its 12th year, City Week is the premier gathering of the international financial services community. Organised in partnership with the UK Government and leading City institutions, City Week brings together industry leaders and policy makers from around the globe to consider the future of global financial markets. Each day will address a specific theme, with Day 1 focussing on “Meeting the climate change challenge – the role of financial services in achieving net zero”. www.cityweekuk.com

Reuters Events: Global Energy Transition 2022 – June 14-15 in New York City: The conference unites CEOs and changemakers from the energy, industrial, and government ecosystems to shed light on the defining issue of our time, and help companies meet a uniquely difficult challenge. Over two days and five critical themes, we will define the future of energy, inspire a decade of action, and prepare the sector for challenges still to come, with diverse voices from around the world bringing passion and expertise to deliver a new path forward. Find out more by visiting the website today: https://bit.ly/35H7cgb

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

EMEA

Do svidaniya – Europe needs to build up its renewable energy capacity and diversify its gas supply to end its dependency on Russian gas, according to a leaked draft of the EU’s communication on energy prices seen by EURACTIV. Europe is in the throes of an energy crisis, mostly driven by high gas prices. The outbreak of war in Ukraine has only worsened this, highlighting Europe’s reliance on imports for 90% of its gas, 40% of which Russia controls. The communication, originally due to be published on Mar. 2, was meant to look at alleviating the impact of continued high energy prices in Europe and how to prevent this in the future. However, the Russian invasion of Ukraine meant the European Commission had to delay and redraft the communication. It is now expected next week and a leaked draft shows the perspective has shifted to decreasing Europe’s energy dependency on Russia. It lays out several “actions” to break away from Russian energy, including diversifying Europe’s gas supplies and a “new energy compact” that would boost renewable energy across the bloc. While Europe will be able to make it through this winter thanks to gas in storage and LNG deliveries, it needs to continue looking for alternatives to Russian gas, according to the Commission. In the short term, this diversification will be in the form of more LNG, shipped from countries like the US and Qatar. Europe has been working hard to increase its supply of LNG alternatives to Russian gas. Each EU region now has a direct or indirect connection with an LNG terminal and supplies reached their highest ever level in January. Commission will continue international talks and build on the current EU share of the global market, which is currently around 15%. The draft also calls for Europe’s average storage to be at least 80% by Sep. 30, 2022 and could impose a legal requirement for countries to meet that in an attempt to avoid the low inventory levels seen last year. In the long term, the Commission aims to increase the amount of alternative gases, like biogas and hydrogen. The draft suggests an ambition to produce 35 billion cubic metres of biogas by 2030. More investments in renewables can also come from multiple areas, but the draft suggests using additional revenues from the EU ETS and windfall profits of companies that have profited from the crisis. As well, countries should tackle “overly complex administrative procedures”, like permitting processes, that delay investment in renewable energy.

Recalibrating Europe’s growth model – The European Commission has put forward a Communication on the European Growth Model. It acknowledges that the bloc’s economy is undergoing unprecedented transformations in the context of major uncertainties linked to the global and security outlook. The Communication aims to provide input to the discussions on the European economic growth model, which will take place at next week’s informal European Council meeting of heads of state for Mar. 10-11. Meanwhile, the European inflation soared by a record 5.8% in February, the European Central Bank (ECB) said on Wednesday.

Undeniable consequences – Germany might struggle to keep pace with emission reduction targets in the energy sector due to the knock-on effects of Russia’s assault on Ukraine, an influential German industry group has said (BDEW). In an analysis of the war’s implications for Germany’s energy supply security, the BDEW said the industry will “assess all options available in the short, medium and long run to make energy supply more independent and resilient.” This might have “temporary effects on short-term emissions reduction targets,” the lobby group added. The BDEW also said the Russian invasion will cause already high energy prices to increase further, meaning there will be “undeniable consequences” for energy companies’ procurement practices. Even though Germany will remain an energy importer in the future, the “fast and massive expansion of renewable energy sources” is now needed more than ever in order to maximise energy autonomy. Even before Russia started invading Ukraine, the German government had prepared a thorough overhaul of the country’s renewable support policies against the backdrop of volatile gas prices and its 2045 climate neutral goal. This week, the economy and climate ministry send first proposals for a massively increased roll-out of wind and solar power to other ministries for review. A first legal package on faster renewables expansion is expected to be ready by Easter. (Clean Energy Wire)

CCS is no myth – UK-based Independent oil and gas company Neptune Energy announced its aim to go beyond net zero and store more carbon than is emitted from its operations and the use of its sold products by 2030, World Oil reports. The company is currently progressing two CCS developments in the Dutch and UK sectors of the North Sea that could see it store more than 9 MtCO2 emissions per year for third parties by the end of this decade. That would exceed its projected direct emissions (Scope 1) and emissions from the use of its sold products (Scope 3).

INTERNATIONAL

Nature aid – As much-postponed COP15 UN biodiversity talks on a new global pact to protect nature ramp up this month, international green groups have called on the world’s richest nations to commit at least $60 bln a year to protect and restore biodiversity in developing countries. A two-part UN summit is due to conclude in May in the Chinese city of Kunming. The draft pact only includes a goal to boost funding for nature conservation in developing nations by $10 bln per year – in addition to the $5-10 bln now flowing. (Reuters)

Life is plastic – The UN is to start work on blueprint for treaty on plastic pollution hailed as ‘most significant multilateral deal’ since the Paris Agreement on climate change in 2015. A total of 175 countries from around the world have agreed to draw up an international treaty to tackle the devastating impacts of plastic pollution that could lead to legally-binding international commitments. The treaty aims to slash plastic waste levels and engineer a more circular economy. Heads of state, environment ministers, and diplomats endorsed the landmark agreement at a meeting of the UN Environment Assembly in Nairobi on Wednesday. The deal will kick-start work towards a legally-binding treaty by 2024 covering the full lifecycle of plastics, including their production, design, use, disposal, and pollution of land and oceans. Plastic production has risen exponentially in recent decades, having doubled worldwide since 2000 to 400 mln tonnes a year, a figure which is expected to double again by 2040 unless urgent action is taken. (Business Green)

ASIA PACIFIC

Let the work begin – Construction has begun on iron-ore billionaire Andrew “Twiggy” Forrest’s 2 GW electrolyser factory in the Australian state of Queensland — which will be the largest in the world upon completion in early 2023, Recharge reports. The A$114 million ($83 mln) facility — a 50/50 joint venture between US electrolyser maker Plug Power and Forrest’s company Fortescue Future Industries (FFI) — is the first part of the Green Energy Manufacturing Centre, where FFI plans to eventually produce wind turbines, solar panels, batteries, and electrical cables.

AMERICAS

SOTU – In a speech that led with the Russian invasion of Ukraine, President Biden also touted his administration’s efforts to address climate change in his first State of the Union address Tuesday night by focusing primarily on its immediate financial benefits for US families. Biden said the bipartisan infrastructure law passed last year will create good jobs modernising infrastructure to “withstand the devastating effects of the climate crisis and promote environmental justice,” and offered his plan to build a national EV charging network as an example. Biden also said his plan to cut inflation by passing pieces of the now-defunct Build Back Better Act would help save families $500 per year through a combination of tax credits for efficiency and weatherisation, as well as clean energy production and reducing the cost of EVs that save families money at the pump. Biden did not mention the dire IPCC report issued the day before nor the impacts of climate change the report concluded are hitting the world harder and sooner than previously thought. Climate groups and progressive lawmakers raised alarm over what they say is the administration’s insufficient action on climate change and other progressive priorities such as immigration reform and voting rights. (Climate Nexus)

King of the Castle – French oil major TotalEnergies on Wednesday announced it has joined Trident Winds in the Castle Wind joint venture for the development of a 1 GW offshore wind project off the coast of Central California Coast. The Company entered the joint venture and acquired the shares previously held by EnBW North America. Castle Wind is poised to participate in the anticipated US Bureau of Ocean Energy Management lease sale in late 2022

VOLUNTARY

VER fundraise – Canada-based voluntary emissions reduction (VER) investment firm Global Carbon Credit Corp. on Tuesday announced a C$35 mln ($27.7 mln) private placement. The net proceeds from the offering will be used by the company to acquire carbon credits to build out its VER portfolio. The Offering is expected to close on or about Mar. 30 and is subject to certain closing conditions.

AND FINALLY…

Rocks off – The Guardian profiles carbon mineralisation: a chemical reaction where the carbon from carbon dioxide is locked into a mineral. Carbon mineralisation happens naturally during rock weathering and stores carbon safely for thousands of years, but until now its potential was thought to be limited because mineralisation clogs up the pores in a rock, blocking entry and preventing further reactions. However, recent experiments indicate that in some rocks (such as olivine) the crystals created during the process of mineralisation expand the rock and force new cracks to appear, which create fresh surfaces and enhance the rock’s carbon storage capacity.

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