CP Daily: Thursday March 31, 2022

Published 22:57 on March 31, 2022  /  Last updated at 22:57 on March 31, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

UN chief launches expert group to help limit greenwashing in net zero pledges

UN Secretary General Antonio Guterres launched a high-level expert group aimed at dissecting net zero commitments from non-state actors on Thursday, citing the need for greater transparency and consistency to weed out greenwashing, including any overreliance on carbon offsets.

ASIA PACIFIC

China plans significant cuts in ETS allocation, draft govt document shows

China’s environment ministry is planning to make significant reductions in the number of CO2 allowances it will hand out for 2021 and 2022, according to a draft seen by Carbon Pulse on Thursday.

Hong Kong regulators back voluntary carbon market push with ties to mainland China

Hong Kong will move to establish itself as a major voluntary carbon trading hub, providing a bridge between international traders and the mainland China market.

Qantas signs carbon credit deal including sustainable fuels output, sets 2030 emissions target

Australian airline Qantas has signed an agreement with ANZ bank and Japanese oil and gas firm Inpex to evaluate a large-scale integrated reforestation and carbon farming programme that will generate offsets to help meet the airline’s emissions targets and provide a source of renewable biofuels production, the company announced on Thursday.

VOLUNTARY

MENA regional VCM viewed as a distant prospect despite momentum

A Middle East and North Africa (MENA) voluntary carbon market is several years away from gaining traction despite burgeoning interest and a string of net zero pledges by countries and corporates, according to multiple stakeholders.

Verra sets out major revamp of REDD project designs

Project standard manager Verra is seeking a major revamp to its VCS forest protection projects by streamlining data collection requirements, the body said on Wednesday in a move that could have varied impacts for the credit-earning abilities of each activity.

Netflix favours nature-based offsets among 1.5 mln units bought for 2021

US streaming service Netflix sourced 1.5 mln mainly nature-based carbon credits to offset its 2021 full-scope emissions, the company said this week, detailing a five-step screening RFP-based procurement.

EMEA

EU ETS stakeholders urge lawmakers to rethink plans to strengthen MSR

A bolder reform of the EU ETS Market Stability Reserve (MSR) could be essential to tackle high volatility, industry and research experts said on Thursday even as lawmakers appear to be eyeing softer changes.

Euro Markets: EUAs weaken as gas surges after Russia confirms gas payment in rubles

EUAs rose by around 1% on Thursday morning in quiet trading as the market recovered from the previous session’s 4% drop, while energy markets were mixed after news emerged that EU competition officials had raided the offices of German gas companies.

Britain’s GHG emissions rebound 4.7% in 2021 after pandemic-induced drop

The UK’s greenhouse gas emissions rose 4.7% in 2021, according to provisional government data released Thursday that suggested a somewhat smaller increase for ETS-covered sectors as most of the big gains came from homes and road transport.

AMERICAS

NA Markets: CCA bull run devolves into mass volatility, RGAs trend up before Pennsylvania-fuelled downturn

California Carbon Allowance (CCA) prices rocketed to a 2.5-month high this week before cooling off amid erratic screen trading, while RGGI Allowance (RGA) values increased until Pennsylvania RGGI opponents made new moves to try and block the state’s entrance to the market.

CORRECTION – Speculators continue flocking to California-registered WCI accounts during Q1

*Corrects to add the new account opened by AC Carbon*

The number of California-registered Compliance Instrument Tracking System Service (CITSS) accounts ticked up during the first quarter of 2022, as a steady influx of speculators counteracted a number of covered entities closing their accounts, according to data from state regulator ARB.

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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

That’s a yes The Green Climate Fund (GCF) held its 31st board meeting this week, with an unusually small amount of projects up for approval. Only two schemes were voted on, both getting the board’s blessing. They were both so-called cross-cutting projects, meaning they address both mitigation and adaptation. One project, brought by the International Fund for Agricultural Development (IFAD), was a green finance initiative across the 13 African countries making up the Great Green Wall, that will receive $114.4 mln in GCF funding and is expected to cut emissions by 5.6 MtCO2e. The other will address sustainability in prioritised agricultural production systems in Colombia. Backed by CAF, the project will receive $73.3 mln from the GCF.

Ignored investments – The world’s top banks provided $742 bln in finance to the fossil fuel industry in 2021, little changed on the prior year, a report on Wednesday showed, despite growing calls to rein in lending to help tackle global warming. Last year, $185.5 bln was provided to the 100 companies doing the most to expand production, the Banking on Climate Chaos report, authored by NGOs including Rainforest Action Network, BankTrack, and Oil Change International, said. Overall lending to the fossil fuel sector remained dominated by North American banks including JPMorgan, Wells Fargo, Scotiabank, and RBC, all of which increased their financing over 2021, the report said. For tar sands, which require high levels of energy to extract oil, financing rose 51% to $23.3 bln, the report said, led by Canadian banks including TD. (Reuters)

The name’s Bond… – Green finance remains heavily dominated by green bond issuance, according to a report released on Thursday by CityUK, a UK finance industry body. Green bonds accounted for 93.1% of the total global green finance as defined in the report between 2012-21. Global green bond issuance increased to $511.5 bln in 2021 from $2.3 bln in 2012. Global green lending has grown rapidly since 2017, nevertheless, green loan activity remains limited and is concentrated in the syndicated loan market. Global green IPO activity has been volatile in both volume and value terms over the past decade. Meanwhile, green private equity market activity was stronger in the second half of the decade under consideration than in the first half, and was dominated by pure venture capital activity. Overall however, traditional finance completely dominated over the past decade relative to climate finance, and green bonds remain a minuscule part of the overall bond market, accounting for around 1.7% of total bond issuance over 2012-21, the report said.

AMERICAS

Strategic release – The US White House on Thursday announced plans for the largest-ever release of oil from the US strategic reserves, with a plan to release 1 mln barrels per day for 6 months, resulting in a total release of about 180 mln barrels. The move comes as Russia’s invasion of Ukraine causes oil, and thus gasoline, prices to continue their upward trend, causing headaches for President Joe Biden’s administration. In November, the Administration released 50 mln barrels of oil from the US strategic reserves in an attempt to ease price pressures — even as some energy experts argued that the move went in the opposite direction to what’s needed to address climate change. (The Hill)

Bringing the intensity – The Canadian Imperial Bank of Commerce (CIBC) on Thursday announced 2030 targets for the financed emissions of its oil and gas portfolio. These include a 35% reduction in Scope 1-2 emissions intensity and 27% for Scope 3 emissions intensity, compared to 2020 levels. The Toronto-headquartered bank said it aims to set an additional target before year-end.

Sending out an SaaS+ – Toronto-based intelligence software as a service (SaaS+) platform Manifest Climate on Thursday announced it has completed a C$30 mln Series A fundraise. The company said the round was co-led by BDC Capital Women in Technology Venture Fund and Climate Innovation Capital, with participation from the slate of investors that backed the company’s Seed Round in February 2021, including OMERS Ventures, Golden Ventures, Garage Capital, Active Impact Investments, Klass Capital, and Bryker Capital, and influential angel investors. Manifest Climate said its AI-powered SaaS+ platform provides alignment with the Task Force for Climate-Related Financial Disclosure (TCFD), helping organisations to identify, engage on, confidently meet disclosure obligations, and build capacity to manage climate-related risks and opportunities.

Station solutions – ESG tech company mCloud Technologies on Thursday announced an agreement with climate finance firm Carbon Royalty Corp. to fund the installation of advanced solar and battery storage solutions for EV charging stations at 30 US auto dealerships. Carbon Royalty will receive 50% of the tax incentives, carbon credits, and other accretive financial benefits mCloud would be eligible to receive in the US resulting from the implementation of these solutions. These benefits would be split between mCloud and Carbon Royalty over the expected 20-year contract terms of AssetCare arrangements.

EMEA

Dutch reversal – The Netherlands has said Riverstone Holdings’ Onyx Power had decided to keep its coal-fired power plant in Rotterdam open longer than previously planned even though current regulations cap production of the coal-fired plants at 35% of their capacity. The government said Onyx had changed its mind over a deal announced in November, in which it would close the plant within a few months in return for a subsidy of €212.5 mln ($235.7 mln). The Rotterdam site is one of four coal-fired plants in the Netherlands, all of which are due to be shut down by the country’s coal exit date of 2030. (Reuters)

Bye bye lignite – Utility RWE continues to implement the country’s official coal exit timetable by switching off a unit of one of Europe’s most polluting power stations, but will ensure the facility can be restarted in case of a gas supply emergency, Clean Energy Wire reports. RWE said it will decommission the 300MW unit A of its lignite power plant in Neurath on Apr. 1. “Against the background of the current debate about a possible reduction in gas consumption in power generation, RWE will conserve the unit for a short time,” the company said, adding it will “initially refrain from taking any measures that could jeopardise recommissioning in the event that the German government decides the plant is still needed temporarily to ensure security of supply.

ASIA PACIFIC

Supply chain – Six Japanese companies across various industries and the city of Kawasaki have agreed to explore development of a hydrogen supply chain in the coastal area of Kawasaki city on the back of their decarbonisation goals, Argus reports. Refiner Eneos, petrochemical producers Asahi Kasei and Showa Denko, engineering company Toshiba Energy Systems and Solutions, infrastructure firm East Japan Railway, amino acid and healthcare provider Ajinomoto, and Kawasaki city plan to investigate potential hydrogen demand and the possibility of building a supply chain within the area in east Japan’s Kanagawa prefecture.

Blend it in – The Australian Energy Market Commission has taken a critical first step towards developing a national hydrogen industry with the publication of draft recommendations for updates to the national gas and energy retail regulatory framework to include hydrogen and renewable gases, Renew Economy reports. Given the massive uptick in renewable hydrogen projects proposed around Australia, the federal government last year tasked the AEMC and the Australian Energy Market Operator and state government officials to review the national gas regulatory framework in preparation for bringing bio-methane and other renewable gas blends within its scope.

VOLUNTARY

CMS set – Multi-utility CMS Energy on Wednesday announced it aims to achieve Scope 1-3 net zero emissions across its entire gas production and delivery system by 2050. As an interim step, CMS is exploring ways to reduce customer emissions 20% by 2030, including carbon offsets, using renewable natural gas made from agricultural waste, using hydrogen to produce energy, and encouraging the use of hybrid natural gas and electric heat pump systems to heat homes and businesses. The Michigan-based company is also modernising its natural gas system in a bid to eliminate methane emissions from its own operations by 2030 through accelerated infrastructure replacement and improved leak detection. (S&P Global Platts)

Driving the change – Carmaker Jaguar Land Rover said on Thursday it has committed to cut GHG emissions by 46% across its operations by 2030 relative to a 2019 baseline. In addition, the Tata Motors-owned automaker will reduce average vehicle emissions across its value chains by 54%, including a 60% reduction in the use phase of its vehicles. The goals, which are approved by the Science Based Targets initiative (SBTi), are aimed at ensuring the company’s emissions reduction is in line with a 1.5C warming scenario as per the Paris Agreement. These targets form part of Jaguar Land Rover’s commitment to 2030, followed by a second-decade ambition for net zero emissions across the supply chain, product, and operations by 2039.

AND FINALLY…

The Green Monster – The Boston Red Sox on Wednesday announced a partnership with climate platform Aspiration for games at Fenway Park to become the first carbon neutral game experience in Major League Baseball. In a press release, the club said it will contribute a portion of the sale of each ticket to the Aspiration Planet Protection Fund for the purchase of verified carbon credits and to provide other sustainability services that help counter fans’ individual climate impact. The team said verified carbon credits would be issued by standards such as the VCS, Gold Standard, ACR, and CAR.

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