CP Daily: Thursday April 7, 2022

Published 03:31 on April 8, 2022  /  Last updated at 03:31 on April 8, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

Major challenges ahead for RGGI carbon market, expert warns

The northeastern US RGGI carbon market faces a number of challenging headwinds in the next few years that could potentially weaken the scheme or depress permit prices, an expert has warned.

AMERICAS

Pennsylvania DEP appeals RGGI regulation pause to state’s highest court

The Pennsylvania Department of Environmental Protection (DEP) on Thursday filed a notice of appeal to the state Supreme Court after a lower court this week stayed the publication of the agency’s final RGGI-modelled cap-and-trade regulation.

NA Markets: RGAs spike to $14 amid Pennsylvania uncertainty, CCAs rise on light volume

RGGI Allowance (RGA) prices leapt to a 1.5-mth high on Thursday after fluctuating for much of the week on news regarding Pennsylvania’s possible programme entrance, while California Carbon Allowance (CCA) values ticked up as traders maintained a bullish outlook.

Demand simmers for Canada’s new federal carbon offsets as oil and gas searches for zero

Canada’s forthcoming oil and gas emissions cap could offer an avenue to carbon offset demand, as the government leaves all options on the table, including both domestic and internationally-sourced credits, a panel heard Thursday.

Canada budget sets out CCUS, clean technology tax credits

Canadian Prime Minister Justin Trudeau’s administration on Thursday included investment tax credits for carbon capture, utilisation, and storage (CCUS) and clean technologies among its budget measures to get to net zero emissions by 2050.

Oregon makes first compliance instrument allocation in new climate programme

The Oregon Department of Environmental Quality (DEQ) on Thursday announced it has made the first distribution of compliance instruments in its new market-based emissions reduction system.

US EPA foregoes credit surrender requirement in overturning biofuel waivers

The US EPA on Thursday reversed three dozen Renewable Fuel Standard (RFS) compliance waivers at the subject of a federal court order, though regulated parties won’t have to retroactively turn in credits (RINs) as part of the decision.

EMEA

Eleven EU nations urge bloc to speed up climate action to help quit Russian fuels

EU nations should accelerate the passage of the Fit for 55 climate policy package and increase its ambition, eleven EU nations said in a statement on Thursday, adding that doing so would help end the bloc’s reliance on Russian energy.

UK energy strategy confirms extension of industry’s carbon compensation

The UK has extended its carbon compensation package for heavy industry for another three years, it outlined in an energy strategy released on Thursday, seeking to protect carbon leakage-exposed firms from indirect costs arising from the country’s carbon pricing policies.

Euro Markets: EUAs boosted by strong auction amid mixed energy signals as Europe debates coal, gas bans

EUAs turned upwards after one of the strongest sales of the year early on Thursday, defying a largely weaker energy complex as Italy appeared to play down prospects of an EU ban on Russian gas and progress on a coal ban was delayed.

Sweden becomes first nation to adopt consumption-based emissions goal

Sweden has become the first country in the world to adopt a target to reduce consumption-based emissions generated abroad, the government said on Thursday after a deal struck across political parties to include the goal along with international aviation and shipping.

EU should match German cost relief mechanisms in transport and building ETS design -report

Germany’s national ETS for heating and transport fuels (nEHS) includes cost relief measures for households that should be mirrored by the EU in the design of their new carbon market the same sectors, according to a position paper from a network of environmental organisations.

ASIA PACIFIC

Australia set to move slowly in developing its Indo-Pacific carbon market

The Australian government is taking a slow and steady approach to developing its Indo-Pacific Carbon Offset Scheme (IPCOS), prioritising its established partnerships with Papua New Guinea and Fiji before looking further afield, a conference heard Thursday.

Australian Greens flag price floor for voluntary carbon credits

The Australian Greens party on Thursday announced they would call for a A$50 ($37.40) minimum price for Australian Carbon Credit Units (ACCUs), should they win the balance of power in the upcoming federal election.

VOLUNTARY

Microsoft’s climate fund takes stake in African offset developer

US tech giant Microsoft’s climate innovation fund has made an equity investment in an Africa-based carbon credit developer, alongside a group of venture capital and family office investors.

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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

EMEA

CO2 farming – EU agriculture ministers today adopted conclusions on carbon farming, based on the parts of the European Commission’s ‘sustainable carbon cycles’ communication that deal with the sector and aim to encourage agricultural practices that help to capture and store carbon, the Council of member states announced. These practices may include, on the farming side, planting hedges or trees, growing legumes, using catch crops and cover crops, practising conservation agriculture and maintaining peatlands, and on the forestry side, afforestation and reforestation. The conclusions included the setting up of an expert group of member state representatives to assist the Commission in taking into account existing best practices on carbon farming. Read Carbon Pulse’s latest on the sustainable carbon cycles communication.

Net zero prospects –  The global surge in energy prices following the invasion of Ukraine will make the shift toward net zero fossil fuel emissions more difficult, a senior Bank of England official said, Bloomberg reports. Sarah Breeden also said there’s a risk from green asset bubbles and an abrupt shift away from investments in pollution-intensive industries. “Recent events … suggest that our path to net zero will be bumpier than we otherwise would have expected,” Breeden said. “But uncertainty over climate policy cannot be an excuse for inaction by the real economy or the financial sector.”

Bulgaria got cash – The European Commission has endorsed Bulgaria’s recovery and resilience plan, the EU’s executive announced. This is a key step paving the way for the EU to disburse €6.3 bln in grants under the Recovery and Resilience Facility (RRF). The Commission’s assessment found that Bulgaria’s plan devotes 59% of its total allocation on measures that support climate objectives. This includes significant investments to accelerate the decarbonisation of the energy sector, tripling power generation from renewables by 2026, building up large electricity storage capacities, cutting greenhouse gas emissions of the power sector by 40% by 2025, and setting out a framework for the coal phase-out. The plan also covers support for energy-efficiency renovation of the building stock, as well as targeted reforms to facilitate these investments. Sustainable transport is also promoted. Measures in the areas of water management and biodiversity conservation and restoration will also be key in the context of the objectives of the green transition. However, ICIS reported that the government was now planning to keep its entire 4.9 GW capacity coal power fleet online while scrapping plans to build new gas facilities – response coming as the EU strives to rapidly cut its dependence on Russian energy imports.

Wasting wind – Letting existing nuclear plants run longer will lead to large amounts of renewable energy going to waste, a paper by think-tank Energy Brainpool has found. The lifetime extension of France’s nuclear power stations alone would mean that in 2030, some 2 mln MWh of renewable energy would be pushed out of the grid in the country, as well as in Spain and Germany. Because of the interconnected European grid and power market, extending nuclear plants fun for longer would also affect the neighbouring countries’ renewable input.

Ghana but not forgotten – The Ghanaian government is in the process of finalising a national emissions trading framework to govern the national process and institutional arrangements for approving eligible carbon market projects, the Ghana News Agency reports. Already, a draft document on the framework, which was developed through the Ministry of Environment, Science, Technology and Innovation (MESTI), is going through stakeholder consultation. Speaking to the mews outlet, Daniel Tutu Benefoh, Ghana’s focal person to the UNFCCC, said the draft framework would be finalised and forwarded to cabinet for approval.

Financing the African transition – Danish technology company Solstroem and off-grid solar power provider Engie Energy Access have announced a partnership to accelerating climate finance to the off-grid sector in sub-Saharan Africa through the issuing and selling of “data-driven and transparent” carbon offset credits.

ASIA PACIFIC

Delay the inevitable – The Australian government is seeking to introduce new rules to ensure energy companies provide five years’ notice before closing power stations, amid concerns about reliability and affordability, ABC reports. The change was proposed by the energy minister, Angus Taylor, who was seething when Origin Energy announced the closure of Australia’s largest coal-fired power plant, Eraring, without first notifying the government (the utility brought forward the closure year to 2025 from 2032). Mr Taylor warned that earlier-than-expected closures could lead to spikes in electricity prices for consumers, although energy experts and industry observers have insisted any impact would be muted. Under the current rules — set by the Australian Energy Market Commission (AEMC) rather than the government — electricity companies need to provide at least 3.5 years’ notice of an upcoming closure.

Barossa backlash – A South Korean state run bank has delayed approval of a loan to Australian gas company Santos to develop its Barossa offshore gas project after indigenous Australians argued the project would damage the local environment, the FT reports. The delay and the pending court case have cast doubt on the future of the project as environmentalists around the world step up campaigns against fossil fuel development. Tiwi islanders last month applied for an injunction application in Korean courts that would prevent two Korean government export credit agencies, the Export-Import Bank of Korea (Kexim) and the Korea Trade Insurance Corp (K-Sure), from lending up to $700 mln to fund the Barossa project.

Clean fuels waiver – Singapore will waive port dues for new low and zero carbon fuelled harbour craft for five years from the date of their registration as part of the country’s efforts to push for a more sustainable maritime sector, Channel News Asia reports. In addition, concessions on port dues, currently available to vessels powered by LNG, will be extended to include vessels using low carbon and zero carbon fuels, announced Singapore’s minister for transport, S Iswaran.

Hydrogen deal – Japanese trading house Mitsubishi plans to collaborate with Shell in producing green hydrogen via the development of major offshore windfarms in Europe, Kyodo News reports. The plan is expected to create 400,000 tonnes of green hydrogen annually by 2030. Mitsubishi, through its subsidiary Eneco, is looking to invest 10% in a business firm to be financed by Shell and Norwegian energy company Equinor, among others.

VOLUNTARY

Forest failings – Six successive ministers in the Democratic Republic of Congo illegally allocated at least 18 logging concessions between them and repeatedly violated forest laws, a national audit has found, Climate Home reported,  findings that could have a substantial bearing on multilateral and voluntary forestry carbon projects in the country. The report paints a scathing picture of failed forest governance from the top of the ministry down through the administration’s ranks. It found that the country’s forest code hasn’t been implemented since its introduction in 2002 and that officials repeatedly violated a moratorium on new logging concessions. In response, environment minister Eve Bazaiba announced the creation of a ministerial commission to revisit all forest concessions.

SCIENCE & TECH

Methane monster – Global methane emissions surged by a record amount in 2021, the US National Oceanic and Atmospheric Administration said Thursday. NOAA said the annual increase in atmospheric methane last year was 17 parts per bln, the largest amount recorded since systematic measurements began in 1983. The increase in methane during 2020 was 15.3 parts per bln, and in 2021, atmospheric methane levels averaged 1,895.7 parts per bln, or roughly 162% greater than preindustrial levels. (CNBC)

AND FINALLY…

Info wars – Social media platform Pinterest is banning misinformation about climate change, becoming the first major platform to ban climate change denial and similar falsehoods produced by regular users. According to Quartz, the new policy applies to both user-generated content and advertising. Pinterest is one of the largest social media platforms in the world with 431 mln monthly users – more than Snapchat or Twitter. Meanwhile, Facebook owner Meta said Thursday it had removed a network of social media accounts with ties to the Brazilian military that posed as fake non-profits to play down the dangers of deforestation. Although the individuals involved in the network were active military personnel, Meta’s investigation did not find enough evidence to establish if they were following orders or acting independently, a person with knowledge of the matter told Reuters. Brazil’s President Jair Bolsonaro, a far-right former army captain and long-time sceptic of environmentalism, has deployed the armed forces to the Amazon on unsuccessful missions to reduce destruction of the world’s largest rainforest. The takedown operation, Meta’s first to hit a network focused primarily on environmental issues, may also add fire to Bolsonaro’s attacks on large tech firms, which he accuses of stifling conservative voices on their platforms. Critics say Bolsonaro and his supporters use the platforms to spread dangerous disinformation undermining Brazil’s democratic institutions. In its report, Meta said the unidentified network, which was limited in scale and authentic engagement, used fake accounts on Facebook and Instagram to post initially about land reform and the pandemic in 2020 before turning its focus to environmental issues last year.

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