CP Daily: Wednesday April 6, 2022

Published 00:46 on April 7, 2022  /  Last updated at 00:50 on April 7, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

ANALYSIS: Scientific support for carbon removals has its limits

The Intergovernmental Panel on Climate Change (IPCC)’s pathways to maintaining a liveable planet rely on carbon removals, but the experts’ caution on how these technical and nature-based methods should be deployed suggest that governments are unlikely to give untrammelled backing.

EMEA

EU industry warns of shutdown risk due to energy costs, lack of support

The EU ETS-covered ceramic industry, a key supplier to bigger emitting steel and cement producers, is in ‘survival’ mode as soaring energy costs significantly hamper its output and ability to transition to a cleaner economy, an event heard on Wednesday.

Euro Markets: EUAs edge lower as UK auction triggers selling pressure amid mixed energy markets

EU carbon prices ended Wednesday moderately weaker in light trading as the UK auction generated some selling pressure, while energy markets were mixed as traders absorbed the implications of an EU ban on Russian coal supplies.

Four high-emitting airlines receive surplus of free EU carbon allocations in 2021 -NGO

Four European airlines received more free allowances than they needed to cover their EU ETS obligations in 2021, according to a green group’s analysis of ETS data for a period when the carriers’ emissions were still greatly impacted by coronavirus restrictions.

ASIA PACIFIC

China’s oil industry might lose race to peak CO2 by 2030 as emissions set to rise quickly -govt research

China’s oil industry might not be able to meet the nation’s overall target to peak its carbon emissions by 2030, and is likely to add a vast amount of CO2 before it reaches this high point, according to a government-led study.

NZ Market: NZUs dip slightly as exotics ban expected to have muted effect on prices

The New Zealand Unit (NZU) spot price fell slightly on Wednesday, as market players weighed in on the effect the government’s recently proposed ban on exotic plants would have on market prices.

VOLUNTARY

Tech firm pays up to $45/t to scoop up entire US urban forest credit portfolio

A technology company has purchased the entire portfolio of urban forestry carbon credits in circulation in the US for between $34 and $45 per unit with the aim of digitising the credits for resale through the firm’s blockchain platform in the coming months, the firm said on Wednesday.

Washington state to generate nearly 1 mln VERs from forest carbon project

The Washington Department of Natural Resources (DNR) on Wednesday announced a forest carbon project on state-owned lands that will generate hundreds of thousands of voluntary emissions reductions (VERs) over the next decade.

Avoidance-based carbon offsets could become outdated within 5 years

Carbon offset projects that avoid emissions could lose buyers’ interest in the next few years as companies shift towards removal-based purchases, an analyst said Wednesday.

Forest-based offsets do not represent reductions, carbon analyst contends

Forest-based offsets should not be marketed as emissions reductions, according to a veteran compliance carbon market analyst, who said on Wednesday that trees must be continually planted to compensate for lost forest stock while project proponents enjoy high returns from their original investment.

Voluntary offset provider Climate Impact Partners hires forestry, ESG investment specialists

Voluntary carbon offset provider Climate Impact Partners has hired two experts – a forestry professional and an ESG investment specialist – to bolster its offering.

SHIPPING

Liquefied CO2 transport moves a step closer with in-principle approval

Classification society DNV has given a world-first in-principle approval of a tank system for liquefied CO2 transport, seen as a key step towards being able to ship large quantities of carbon dioxide to storage sites, a service some large companies aim to earn offset credits for.

Mining giants join shippers to develop Australia-Asia green shipping corridor

A consortium including BHP, Rio Tinto and two shipping firms has agreed to assess the development of an iron ore green shipping corridor between Australia and East Asia, it was announced on Wednesday.

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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

The future is hydrogen – The global market for low carbon hydrogen will require a bare minimum of $600 billion of investment and policy support by 2050, according to the latest hydrogen strategic planning outlook report by energy consultants Wood Mackenzie. Global demand for low carbon hydrogen will grow massively, from below 1 Mt today to 223 Mt by 2050, according to the report. Furthermore, with electrolyser capital expenditure falling 35-65% in the next decade, sub-$2/kg green hydrogen is achievable in most markets around the world at source by 2040. In terms of hydrogen supply, the market will see a new wave of project announcements, with 50 Mt of hydrogen capacity already announced to date and the total pipeline expected to reach approximately 80 Mt this year. “Green hydrogen is expected to dominate the pipeline, with Australia leading in green hydrogen supply, holding 47% of supply by 2029. Post-2030, we expect to see supply quickly ramp up worldwide, and China becomes the largest supplier in the late 2040s,” Bridget van Dorsten, a research analyst at Wood Mackenzie, said in a press release.

Pole position – E.ON, Iberdrola, and EDF beat other utilities when it comes to managing climate risk and are thus best poised to take advantage of opportunities arising from the energy transition, according to a new report by BloombergNEF. BNEF’s Utility Transition Scores compare 98 major power companies on their preparedness for a low-carbon world. Eight of the top 10 scorers are based in Europe, boosted by a policy ecosystem that prioritises climate transition. In contrast, expansion of coal operations is the common denominator among laggards. Seven of the bottom 10 companies have plans to grow coal-fired power generation. Many are located in Asian countries that don’t have government-mandated coal phase-out policies. For utilities, the ability to generate relatively low-carbon power from renewables, hydro, or even nuclear is a major determinant of transition risk exposure. Leading companies already fare well on this metric. The top 10 scorers produce on average 0.16 tonnes of CO2 per MWh of power, but this rises to 0.67 tonnes for companies in the bottom 10. Leaders are also seeding low-carbon business lines, for instance by developing projects across hydrogen, carbon capture, renewable power purchase contracts, and electric vehicle charging.

More bang for you buck – Investment in renewable energy can create three times as many jobs as investing in fossil fuels, a new report has found. Renewable energy has the potential to create three times as many jobs per £1 mln invested compared to gas or coal power, while investment in energy efficiency can create five times as many, according to a report by the UK Energy Research Centre (UKERC). The new research comes at a time when the price of oil and gas has soared in the wake of Russia’s invasion of Ukraine, exacerbating already rising energy prices and prompting calls for the UK to bolster its energy security. (Independent)

Decarbing crude carriers – Lloyd’s Register, Samsung Heavy Industries, and MISC have signed a Memorandum of Understanding (MOU) for the development and construction of two very large crude carriers (VLCCs) which can be operated on zero emission fuel, Hellenic Shipping News reports. The three companies, all founding members of The Castor Initiative, are taking the lead to encourage the use of green ammonia as a propulsion fuel, with the first of these dual-fuel tankers entering into service in late 2025 and the second in early 2026. The Castor Initiative, a multinational coalition committed to make zero emissions in shipping a reality, includes MISC, Lloyd’s Register, and Samsung, as well as MAN Energy Solutions, the Maritime and Port Authority of Singapore, Yara International, and Singapore’s Jurong Port. Following the inking of this MOU, The Castor Initiative members will focus on identifying green shipping corridors to facilitate the bunkering of these zero-emission VLCCs. BHP and Rio Tinto have also signed a letter of intent with two shipping companies to develop an iron ore green shipping corridor between Australia and Asia.

EMEA

Homegrown power – Britain will set out a plan to expand nuclear and offshore wind power on Thursday in a drive to bolster its energy independence at a time of surging prices and Russia’s invasion of Ukraine, Reuters reported, citing a government statement. The strategy will increase wind, nuclear, and solar generation, whilst supporting production of domestic oil and gas in the near term, adding that 95% of electricity by 2030 could be low-carbon. Nuclear is central to the plan, with an ambition to increase capacity to 24GW by 2050 to boost its share to around 25% of power demand, up from 14% today. The government said up to eight reactors could be delivered by 2030 – accelerating the pace from one a decade to one a year – as the UK looks to move away from oil and gas and protect itself from price volatility.

Grid 2.0 – Britain will launch a publicly-owned system operator to take over some of the responsibilities of its national grid operator and help the country meet its net zero emissions target. The entity is to oversee the integration of technologies such as hydrogen and CCS into existing gas and electricity systems. (Reuters)

Easter gift – Germany wants to fight the climate crisis and its heavy dependence on fossil fuel imports by speeding up the rollout of renewables with a massive overhaul of key energy legislation. In the what the government has called the biggest energy policy reform in decades, the coalition proposes to lift the rollout of wind and solar power to a much higher level in a draft law. The legislation aims to free up new land for green power production, speed up permit procedures, and massively increase wind and solar additions to achieve a nearly 100% renewable power supply by 2035. The coalition partners SPD, Green Party and FDP say the more than 500-page so-called “Easter Package” of reform proposals will tackle not only the climate crisis, but helps the country in its efforts to become independent of Russian fossil fuels. (Clean Energy Wire)

ASIA PACIFIC

Scarborough fair – Australia’s Woodside Petroleum has announced it has received key federal approvals to go ahead with its $12 billion Scarborough gas project in the country’s north west coast. The project will see gas from the Scarborough field be sent to the Pluto LNG Train 2 facility – boosting Australia’s overall LNG export capacity by 8 million tonnes per annum when it comes online in 2026. Woodside has claimed the project will be one of the lowest carbon intensity sources of LNG in the market, however environmental and climate groups have argued that the project is a bet against Australia meetings its Paris Agreement targets. The company is set to merge with BHP’s petroleum business which holds a 26.5% interest in the project, following a shareholder vote later this year.

Down-under COP – Australia’s Labor Party has vowed it will make a concerted effort to host a COP summit if it wins the upcoming election next month, in a bid to show off its stronger climate credentials on the world stage. The Sydney Morning Herald reports that the summit would be held in partnership with other Pacific nations, with opposition climate and energy spokesman Chris Bowen saying it would send a clear message that Australia is under new management. Both political parties have formally committed to net-zero emissions by 2050, however the Morrison government’s 26-28% target by 2030 compares with Labor’s 43% target. The opposition party has not put a timeline on when it would like to host COP and it would be subject to negotiation with other countries.

Charge it up – China’s largest electric vehicle producer, BYD, said over the weekend that it had stopped producing fossil-fuelled vehicles since March to focus on electric and hybrid cars, in response to the government promotion of greener automobiles, Bloomberg reported, citing the company’s release on the Hong Kong exchange. The company said on Twitter that it has become the first automotive manufacturer in the world that has stopped manufacturing combusting vehicles.

AMERICAS

Pura vida, with gas? – Costa Rica’s new president may abandon the nation’s policy of not producing oil and gas, undermining efforts by the previous administration to lead a global movement, Climate Home reports. Conservative economist Rodrigo Chaves Robles was elected president of the central American nation on Sunday, defeating Jose Maria Figueres. Asked about oil and gas production during the campaign, Chaves told La Republica he was against oil exploration but “regarding gas, it is a technical question”. He continued: “I do not see a contradiction between the environment and the rational management of natural resources. Norway has done it and has done it super well.” Norway is Europe’s largest producer of gas while also leading on electric vehicle adoption and on contributing money to combat climate change internationally. Under the outgoing president Carlos Alvarado Quesada and environment minister Andrea Meza, Costa Rica co-founded the Beyond Oil and Gas Alliance with Denmark. This alliance promised to set an end date for oil and gas extraction and end new concessions, licensing or leasing rounds.

Pure life, with gas – Canadian environment minister Steven Guilbeault on Wednesday announced plans to develop guidance that will require proponents of new oil and gas production projects subject to a federal impact assessment to demonstrate that they will have “best-in-class” low-emissions performance The new guidance will explain how proponents of new oil and gas projects subject to a federal impact assessment should use the analysis required by the Canadian government’s strategic assessment of climate change to demonstrate that the project will be “best in class”. These include demonstrating that the project will integrate advanced technologies and best environmental practices, including emerging technologies, to minimise emissions, comparing the project’s emissions with high-performing projects in the world, and developing a plan to achieve net zero emissions by 2050 if the project will continue to operate after that date. The government said the development of the guidance will be informed by consultations with industry, provinces, territories, Indigenous Peoples, and other stakeholders.

The Chronicles of Sarnia – Canadian energy infrastructure company Enbridge is looking at CCS opportunities in the US Gulf Coast and Sarnia, Ontario, chief executive Al Monaco said on Wednesday. Last week the Alberta government picked Enbridge’s plans for a carbon storage hub near Edmonton as one of six open-access hub proposals to move forward in the Canadian province. (Reuters)

VOLUNTARY

Brilliant result – Brilliant Planet, a London-based carbon capture and storage company, announced the closing of its oversubscribed $12 mln series A funding round co-led by Union Square Ventures and Toyota Ventures. Additional and follow-on investors include Future Positive Capital, AiiM Partners, S2G Ventures, Hatch and Pegasus Tech Ventures. Brilliant Planet is “unlocking the power of algae” as an affordable method of permanently and quantifiably sequestering carbon at the ‘gigatonne scale’. The company’s innovative processes enable vast quantities of microalgae to grow in open-air pond-based systems on coastal desert land. Following four years of trials at its three-hectare research facility in Morocco, Brilliant Planet will use the proceeds of the Series A round to prepare for construction of a 30-hectare commercial demonstration facility while continuing its fundamental R&D programme based in London. Brilliant Planet is supported by partners including UK Research & Innovation, Scottish Association of Marine Science and Southampton University across a range of research initiatives such as remote sensing, oceanography, sensor development and fluid dynamics. (Bdaily)

Aloha abatement – Hawaiian Airlines on Wednesday said it will match all guest carbon credits purchased during April – in recognition of Earth Day later this month – and committed to offsetting all future employee business travel on Hawaiian’s flights. Effective today, Hawaiian’s guests booking travel within the Hawaiian Islands and between Hawai’i and the continental United States, as well as Japan, South Korea, Australia, Auckland, Tahiti, or American Samoa, can enter their origin and destination on a carbon calculator – adding multiple legs and travellers, if necessary –  and determine the emissions of their itinerary. Travelers can then choose to balance out their impact by contributing to forest carbon projects that reduce deforestation, the second leading cause of climate change. Resulting donations will directly fund projects led by Conservation International that generate high-quality, independently verified carbon credits that protect forests and support local communities.

SOC it to me – Offset standard manager and developer Verra on Wednesday announced an RFP for the development of a VCS Tool for Soil Sampling, Processing, and Analysis to Determine Soil Organic Carbon (SOC) Stock Changes in agricultural land management (ALM) methodologies. ALM methodologies include procedures for assessing changes in the amount of soil organic carbon that result from project activities. The RFP deadline is Apr. 29.

SCIENCE & TECH

You dig? – A new statistical study by scientists shows large mismatches in models predicting how carbon moves in and out of soil. The study, published in the peer-reviewed journal Nature Communications, attempted to reconcile different measurements of the two main movers of carbon through the soil. To understand the atmosphere, scientists treat soil carbon like a bank account. Carbon is deposited by plants in the soil in the form of organic carbon matter. The study refers to the process by the term gross primary productivity (GPP). Bacteria, roots, and other denizens of the soil biome withdraw CO2 into the atmosphere via soil respiration (Rs). Other, smaller sources of CO2 like fire and dissolving organic carbon in water, also make up ways in which carbon moves out of soil. Understanding how carbon moves through the soil and how long it stays there could have huge implications for estimating the true environmental value of carbon credits. (No-Till Farmer)

AND FINALLY…

DO look up – Orsted, the world’s largest developer of offshore wind farms, is asking authorities to seal off parts of the sea after blades from one of its turbines fell off. Shares of the unit’s manufacturer, Siemens Gamesa Renewable Energy, plummeted as much as 8.1%. The rotor and three blades fell off a turbine that’s part of the Anholt Offshore Wind Farm on Denmark’s east coast, Orsted said in a statement. There were no injuries. It’s not unheard of for wind turbines to fall over, though it is rare. A giant machine from Vestas Wind Systems toppled over in Sweden in late 2020, and late last year a Nordex turbine collapsed at a wind park in Germany. While there’s no indication that the issue with the Siemens Gamesa turbine is more than a fluke, Orsted is calling for a to stop maritime traffic near all of its sites that use the machine. That includes another Danish wind park, a handful of sites off the coast of the UK, and a wind farm in German waters. In Germany, offshore wind farms are already no-sail zones, an Orsted spokesperson told Bloomberg.

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