CP Daily: Monday March 14, 2022

Published 01:27 on March 15, 2022  /  Last updated at 01:27 on March 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

Microsoft laments high-quality carbon removal issues in 1.5 Mt procurement

Tech giant Microsoft last week documented the challenges in buying carbon removals as part of its new 1.5 Mt procurement, outlining difficulties that range from a lack of high-quality credits and common standards to a previously-contracted forest offset project burning down.

ASIA PACIFIC

China vows to root out fake ETS data

Chinese regulators on Monday named verifiers guilty of faking data under the national emissions trading scheme, and pledged to take action to ensure similar cheating will not take place in the future.

Shenzhen to consolidate allowance vintages in ETS

Shenzhen has begun the process of consolidating all carbon allowance vintages in its emissions trading scheme into a single contract, a move likely to boost market liquidity and eliminate market manipulation.

EMEA

UK govt doesn’t envisage lifting current fracking ban -minister

The British government is holding firm on its current ban on shale gas fracking, despite growing support from the ruling party to reverse the position in light of spiking energy costs, a minister told a conference on Monday.

Speculator-led EU carbon market too volatile, unpredictable to offer reliable investment signal -utility boss

The EU carbon market is too volatile and unpredictable to offer stable investment signals, and is overrun by speculators, as is evidenced by the recent price crash, the head of a major European utility has said.

Euro Markets: EUAs rise for a fifth day in thin trading as energy markets fall on ceasefire talks

EUA prices rose for a fifth day on Monday while energy markets relaxed as Russia and Ukraine held a fourth round of talks aimed at ending the conflict in Ukraine.

Two more EU carbon market veterans part ways with employers

Two more EU carbon market veterans have parted ways with their respective employers, Carbon Pulse has learned.

VOLUNTARY

VCM Report: Nature-based VERs crash below $8 before rapid rebound

Prices for exchange-traded, standardised voluntary emissions reduction (VER) contracts continued to unravel over the early part of the week as nature-based units dropped well into the single digits, though credit values shot back up in recent days alongside a rebound in global carbon allowance prices.

Ninety more financial institutions put name to environmental standards disclosure campaign

A total of 680 financial institutions have asked the boards of thousands of companies to disclose data on their environmental impact, with dozens more signing letters of request sent out on Monday to further pressure firms to report their climate impact this year.

INTERNATIONAL

Experts concerned that energy crisis will drive renewed investment in fossil fuels

The energy crisis and Russia’s invasion of Ukraine may redivert investment from low-carbon technologies to fossil fuels due to security of supply fears and more supportive economic conditions, a conference heard Monday.

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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

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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

INTERNATIONAL

Lobbying balance – An investor group launched a new standard on lobbying on Monday, affirming the importance of lobbying efforts to align with the 1.5C global temperature target. The Global Standard on Responsible Climate Lobbying urges companies to commit to applying responsible climate lobbying as well as to disclose support for business groups lobbying on their behalf. The standard was developed by the Swedish Pension Scheme AP7, BNP Paribas Asset Management, and the Church of England Pensions Board, and is backed by investor groups leading on climate talks with companies whose members manage a collective $130 trillion. It includes 14 indicators to guide responsible lobbying as well as an investor statement of intent that asset managers can sign up to. “Investors will no longer tolerate a stark gap between the company’s words and actions on climate,” said AP7 sustainability strategist Charlotte Dawedowski Seidstrand. (Reuters)

Vote proposal – Shareholders at four US oil companies will vote in the coming quarter on proposals for the firms to meet emissions targets set out in the Paris Agreement, said the climate activist group of shareholders Follow This, and reported by Reuters. The votes will test shareholder willingness to impose new CO2 restrictions amid high energy prices and new energy security fears following Russia’s invasion of Ukraine. Exxon Mobil Corp, Chevron Corp, ConocoPhillips, and Phillips 66 have said that they will consider the feedback and input from the group of shareholders, while Occidental Petroleum has sought to bar the group’s proposal.

EMEA

Negative carbon tax France is to introduce a rebate of €0.15 per litre of transport fuel to help drivers cope with soaring fuel prices, PM Jean Castex said in an interview. The measure will apply for four months from the start of April and is expected to cost the government just over €2 bln. Retail gasoline and diesel prices have soared to record highs in many countries across the world following Russia’s invasion of Ukraine. A gesture of support for French motorists had been flagged by President Emmanuel Macron as part of a campaign for a second term in elections that take place next month. (Reuters)

Consumer relief – The German government is planning a new relief package to help consumers cope with rising energy prices. Economy and climate minister Robert Habeck said that the extremely high heating costs, electricity prices, and other fuel prices are a burden on households. He noted that the relief package must also provide incentives for energy efficiency. The ministry estimates that an average family living in an unrenovated house would face additional costs of around €2,000 for gas alone this year. “The government will now put together the overall package quickly and constructively,” Habeck said. Finance minister Christian Lindner also wants to launch a fuel subsidy. The measure would lower petrol prices by about €0.20 per litre or even more, corresponding to about 10% of the current price at the pump. (Clean Energy Wire)

No mas – Spain plans to set temporary limits on power prices in the coming weeks, in one of the boldest attempts in Europe to stem a surge in energy costs that has forced industries to shut operations and furlough workers, Bloomberg reports. Ecological Transition Minister Teresa Ribera said she is confident the European Council will give the green light to limits at a Mar. 24-25 meeting and allow her government to enact a “shock package” of measures. If not, Spain will likely move ahead with them anyway. “If there is no European solution, we would have to consider challenging the European system,” Ribera, who is in charge of energy policy, said in an interview. “We are not going to allow the Spanish economy, Spanish families and industries to adjust by not consuming and closing down.” She stressed though that the government’s main aim is to have a common EU policy.

Wind barrier – Poland’s restrictive laws block it from deploying half of the onshore wind that is necessary for Europe’s 2030 climate goals, according to analysis from climate think-tank Ember. In the report, Ember assessed onshore wind distancing rules in all EU member states, showing that Poland’s current policy is among the most strict. The current Polish minimum distance law excludes 99.72% of all land from wind investments and limits the total installed capacity at the maximum of around 10 GW. In comparison, Germany plans to add 10 GW of wind capacity every single year to 2030. Most EU countries assume a 0.5-1 km minimum distance between wind turbines and houses but in Poland this exceeds 2 km.

Innovation fund Almost 150 projects have applied to the EU Innovation Fund’s second call for large-scale projects. The 138 project proposals come from almost all EU member states as well as Norway and Iceland. The total funding requested amounts to €12.1 bln. Of the applications received, around 15 are cross-sectoral, and over 50 projects produce at least two different products, such as e-fuels, chemicals, hydrogen, biofuels, electricity, or bio-based products. The proposed projects promise to reduce around 712 mln tonnes of CO2 during their operating period under the Innovation Fund. “We are very happy with the number of projects applying for the second Innovation Fund call. This shows that innovative European companies’ interest in investing in cleantech remains strong,” Mauro Petriccione, director-general for DG Climate Action said. (European Commission).

Investors welcomeThe Investors Dialogue on Energy is a new initiative launched by the European Commission’s Directorate-General for Energy. Its objective is to facilitate investments in energy projects that can contribute to achieving the ambitious climate and energy goals of the European Green Deal. The Investors Dialogue on Energy aims to establish a forum of energy and financial experts who are dedicated to discuss and find solutions to investment barriers for energy projects, making practical recommendations on how to address them. The dialogue will be structured around 5 different segments of the energy value chain. A Working Group will be dedicated for each one of these topics, as listed below:

  • energy production
  • transmission and distribution
  • energy storage
  • heating and cooling
  • services and prosumers

Stakeholders who are interested in joining one or more of these Working Groups are welcome to apply by completing the online application form by Apr. 10. Once established, the Investors Dialogue on Energy will help assess existing energy financing schemes and propose upgrades for them. Where feasible and needed, it will also develop proposals for pilot financial instruments, programmes or investment products, steer technical assistance and prepare suggestions for modifications to financial or other rules affecting investment in energy at EU and national level.

Mergers allowed The European Commission has approved, under the EU Merger Regulation, the acquisition of joint control over Emerge Limited (‘Emerge’) of the United Arab Emirates (UAE) by EDF International (‘EDFI’) of France and Abu Dhabi Future Energy Company PJSC – Masdar of the UAE. The proposed transaction will transform Emerge, an existing non full-function joint venture jointly controlled by EDFI and Masdar, into a full-function joint venture. Emerge will be active in the field of building energy efficiency, on-site solar power generation, and public street lighting projects in the UAE and Saudi Arabia. EDFI is a subsidiary of Electricite de France SA, an integrated energy company active in the generation, transmission, distribution, supply, and trading of energy internationally. Masdar is an international renewable energy company that provides solutions in energy, water, urban development, and clean technologies. The Commission concluded that the proposed acquisition would raise no competition concerns, given that Emerge has no actual or foreseen activities in the European Economic Area. The transaction was examined under the simplified merger review procedure. (European Commission)

AMERICAS

A lesson in futility – A suite of House Democrats are urging President Joe Biden to revive efforts to salvage major clean energy investment legislation by resuming talks on his stalled domestic spending and tax package. “The more than $555 billion in climate investments in the House-passed Build Back Better Act can serve as the building block to restart negotiations,” over 80 House members told Biden a letter Monday morning. The letter, led by Reps. Sean Casten, Jamaal Bowman, and Nikema Williams, includes signatures from the progressive and moderate sides of the House Democratic ranks. It signals wide-ranging interest in moving clean energy legislation this year amid strong chances Republicans will retake the House and perhaps the Senate in the midterm elections. The more critical action remains in the Senate, where it’s unclear if there is anything approaching decent prospects for the White House to reach a deal with Sen. Joe Manchin, a pivotal vote in the evenly divided chamber and who last week dismissed the chances of reviving the stalled Build Back Better Act. (Axios)

…case in point – Manchin said Monday that he opposes Biden’s nomination to the Federal Reserve, Sarah Bloom Raskin, wielding once again his oversized power to overturn his own party’s slim voting majority. Manchin’s formal opposition throws serious doubt on Raskin’s bid to be the central bank’s next vice chair for supervision, and would now require at least one Republican senator’s vote, an unlikely outcome. Raskin is known for her views seeking to increase the Fed’s role in addressing climate change through financial regulation, as well as her outspoken opposition to emergency aid for the oil and gas industry during the pandemic. Meanwhile Manchin has repeatedly blocked climate-related legislation and has argued for government support to increase domestic oil and gas production in the context of Russia’s invasion of Ukraine. Many of Manchin’s top donors include executives in the coal, oil, and gas industries. Economists note that the partisan dispute comes at a precarious time for the Fed, which is expected to raise interest rates later this week. (CNBC)

Carbon consideration – The US Federal Energy Regulatory Commission must revise its environmental assessment of a Kinder Morgan subsidiary’s upgrades to a natural gas pipeline in Massachusetts, a federal appeals court held. In a partial win for environmental advocacy group Food & Water Watch, the US Court of Appeals for the District of Columbia Circuit said Friday FERC “failed to account for the reasonably foreseeable indirect effects of the project—specifically, the greenhouse gas emissions attributable to burning the gas to be carried in the pipeline.” The court rejected Food & Water Watch’s other challenges to the project, which added a compressor station and another 3.4 km of pipe to Tennessee Gas Pipeline Co’s system near Agawam, Massachusetts. The upgrades are operating, and Friday’s ruling does not require Tennessee Gas to shut them down during FERC’s re-evaluation (Reuters)

Paddy’s day – Patrick Brown, who was forced to resign as Ontario’s Progressive Conservative (PC) leader in 2018 and later returned as the city of Brampton’s mayor, announced Sunday his bid for the federal Conservative party leadership race. The role was left vacant by Erin O’Toole who was ousted for his balanced views on several issues including carbon pricing, a policy that is rejected by the majority of the party. Brown has said in the past that supporting carbon pricing would be controversial within the conservative movement, but he believed it to be “the right thing to do.” After holding the role from 2015-18, Brown resigned as Ontario’s PC party leader after allegations of sexual misconduct and was subsequently expelled from the party caucus. Brown had denied all related allegations as reported by CTV news, with the media outlet recently posting an apology stating that key details of their reporting were factually incorrect. Brown will be the fifth candidate to enter the Conservative leadership race, with the vote slated for Sep. 10. (National Observer)

The reserve sale that wasn’t – California regulator ARB announced Friday that there were no applicants for the Mar. 30 cap-and-trade allowance reserve sale, and therefore no auction will be held. The ARB sent out a sale notice last month after the November auction cleared at $28.26, a price greater than or equal to 60% of the lowest Allowance Price Containment Reserve (APCR) price tier – $46.05 – this year under the programme. With the February California-Quebec current vintage auction clearing at $29.15, the ARB will offer another reserve sale in June, though California Carbon Allowance (CCA) prices on the secondary market are currently well below APCR levels.

ASIA PACIFIC

Can’t get enough China’s top economic planning agency, the National Development and Reform Commission, is planning to increase annual domestic coal production capacity by 300 Mt, further cutting China’s coal dependence on foreign importers, Bloomberg reports, citing unnamed sources. China produced 4.1 bln tonnes of coal in 2021.

Getting in the way – South Korea won’t be able to meet its 2030 emissions target or its 2050 net zero goal unless it does something to cut carbon in its large steel producing sector, according to a report released Monday by non-profit Solutions for Our Climate and the Korea Advanced Institute of Science in Technology. Under current policies, Korean steel producers will emit over 90 MtCO2e by mid-century, they found.

Fastest in class Mumbai announced detailed plans to zero out carbon emissions by 2050, a target that puts it two decades ahead of India’s national goal and makes it the first city in South Asia to set such a timeline, according to Bloomberg. In the plan announced on Sunday, India’s financial centre, home to south Asia’s biggest corporations, stock bourses, and the central bank, has proposed exhaustive changes to the way it manages energy, water, air, waste, green spaces, and transport for its 19 mln residents. Via Straits Times.

AND FINALLY…

More than money – Carbon Collective, a San Francisco-based investment advisory, is launching a 401(k) service to give workers at small US companies a way to fund climate solutions via their retirement savings, Axios reports. The Carbon Collective aims to expand the relatively limited environmental, social and governance (ESG) options available to many employees at small companies of fewer than 300 people. Carbon Collective aims to avoid the greenwashing of the ESG world in part by publishing an annual climate index detailing companies it views as advancing climate solutions. The latest version has 169 companies and takes inspiration from climate solutions listed by the non-profit Project Drawdown and a comprehensive International Energy Agency report. The index’s top five companies by market capitalisation are Tesla, NextEra Energy, Applied Materials, Zoom Communications, and ABB, according to a statement.

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