CP Daily: Wednesday April 20, 2022

Published 01:39 on April 21, 2022  /  Last updated at 01:39 on April 21, 2022  /  Newsletters  /  No Comments

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

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TOP STORY

MEPs narrowly back EU ETS speculation curbs in preliminary vote

A narrow majority of the European Parliament’s industry committee (ITRE) on Wednesday voted to curb the role of speculative investors in the EU ETS, teeing up a tough battle among lawmakers that favour less drastic measures.

EMEA

Euro Markets: EUAs soar 9.5% on snowballing technical rally as lawmakers vote on ETS reforms

EUA prices jumped to their highest level in nearly eight weeks on Wednesday, breaking out of a month-long range as a sudden upsurge in buying interest coincided with an auction-free morning to breach several technical levels.

Denmark proposes domestic carbon levy for ETS-covered firms

Danish EU ETS-covered companies should face a carbon fee of DKK 75/t (around €10) in 2025, rising annually to the equivalent of €50/t over five years, the government proposed on Wednesday.

AMERICAS

California dismisses calls to fix on earlier CO2 neutrality goal in Scoping Plan emissions pathway

California will stick to its existing current carbon neutrality target in its forthcoming Scoping Plan update, rejecting other emissions pathways that could have sped up this abatement by a decade, state regulator ARB proposed Wednesday.

Regulatory process to remove Virginia from RGGI won’t begin until Q3

Virginia Governor Glenn Youngkin’s (R) administration won’t begin the regulatory process of attempting to rescind the state’s RGGI-linked cap-and-trade programme until the third quarter at the earliest, a government official said Wednesday.

California fuel sales wane during Omicron-afflicted January

California fuel consumption rose year-on-year in January but stayed far below pre-pandemic levels, coinciding with the state grappling with peak infections from the Omicron COVID variant, according to state data published Tuesday.

VOLUNTARY

VCM quality drive not seen solving removals vs avoidance credit debate

Upcoming principles to help measure offset quality will not rank “avoidance” over “removal” credits, a conference heard Wednesday, with experts expecting the debate within the voluntary carbon market (VCM) to continue to run.

Shell ups use of carbon offsets in bolstered climate goals

Oil major Shell nudged up its use of carbon credits last year and still expects a 20-fold increase in its retirement of the units by the end of the decade, it said in a progress report on Wednesday.

Voluntary carbon demand plummets for fossil fuel shipments in Q1 -report

The oil and gas market shunned buying voluntary carbon credits to offset fossil fuel shipments in Q1 as fuel prices spiked in the lead up to the war in Ukraine, analysts said in a report published on Wednesday.

ASIA PACIFIC

AU Market: Traders get pickier about project types, liquidity drops after offset criticism

Brokers have seen increased interest in Australian Carbon Credit Units (ACCUs) project methodologies in response to criticisms raised by academic studies last month, adding to an overall sense of uncertainty and a drop in market activity.

HSBC to fund Australian blue carbon initiatives

HSBC is funding two initiatives designed to drive the creation of carbon credits from coastal ecosystems for the Australian offset market, the bank said this week.

Rio Tinto sets up carbon offsets team to help meet emissions reduction targets

Anglo-Australian mining behemoth Rio Tinto has established a team to identify opportunities to invest in nature-based solutions located on or near its landholdings, the company said on Wednesday.

COMMENT

REDD+ evolves with Verra’s changes to key methodologies

Standard-setting body Verra has proposed changes to tools for estimating emission reductions from its key REDD+ project types that will ensure Verra’s methodologies reflect the latest science and practices while aligning with jurisdictional GHG estimation procedures, Steve Zwick of Verra writes.

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CONFERENCES

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

Shipping baselining – A new market-based measure to cut shipping emissions has been put forward to the IMO by a powerful grouping led by China and supported by Argentina, Brazil, South Africa and the UAE. The proposal, submitted earlier this month, calls for an International Maritime Sustainability Funding and Reward (IMSF&R) mechanism as a mid-term measure. The IMSF&R would set up the upper/lower benchmark CO2 emissions level for a ship based on its upper/lower ‘C’ rating boundaries as set out in existing data collection carbon intensity requirements. Then, to collect funding contributions from ships with actual CO2 emissions above the upper benchmark level and to reward ships with CO2 emissions below the lower benchmark level. (Splash)

EMEA

Reaching higher – The European Commission is assessing whether the EU could achieve a higher target of a 45% share of renewable energy by 2030, instead of its proposed 40%, under its REPowerEU plans due in May to accelerate the bloc’s shift from Russian fossil fuels following the invasion of Ukraine. That’s according to Mechthild Woersdoerfer, deputy director-general of the Commission’s energy department, who told a meeting of EU lawmakers on Wednesday. The EU got 22% of its gross final energy consumption from renewables like wind, solar and biomass in 2020. (Reuters)

Green plans for Ukraine – Ukraine should be rebuilt as a clean powerhouse that spurs the EU’s Green Deal, according to the head of the Ukrainian parliament’s climate subcommittee, Politico reported. “We’re essentially going to be starting from scratch with the amount of destroyed industrial sites, energy sites. We can be the breeding ground for new technology for pilot projects, for renewables projects,” Lesia Vasylenko, an opposition MP with the pro-EU Holos party said during a phone call last week from her home in Kyiv, to which she had recently returned after 45 days hopping from safe house to safe house. Vasylenko wants to reverse Ukraine’s polluting legacy as the USSR’s manufacturing base. In doing so, the country could become the engine for Europe’s ambitions to reach net zero emissions by 2050, she said.

ASIA PACIFIC

Now THAT’S a power plan – Vietnam’s latest draft National Power Development Plan for the 2021-30 period (which includes a vision to 2045), known as PDP VIII, has made drastic reduction of CO2 emissions a priority, with no new coal-fired power plants to be built in the planning period, Vietnam Plus reports. The draft also aims for a switch from coal and natural gas-fired power to biomass, ammonia and hydrogen, and renewables. It also outlines a longer-term roadmap to cut coal-fired power to just 9.6% of total power capacity by 2045, while the share of wind and solar power combined is to be raised to 50.7% by that year. However, the specific planning period for PDP VIII is up to 2030, with the 2045 targets representing more of a vision. The draft also includes a lower estimate for total power capacity needed by 2030, around 146,000 MW, which is down by about 35,000 MW compared to a previous draft submitted in March last year.

Carbon ‘moo-tral’ beef – Australian supermarket chain Coles has released its own brand of certified carbon-neutral beef, after being registered with the federal government’s Climate Active Carbon Neutral Standard. The company released a statement saying it had been working with beef farmers to help calculate and reduce their emissions. Coles listed emissions reduction techniques such as using renewable energy, changing herd management practices for more efficient reproduction, and using genetic selection to improve herd health. It has also been working with Integrity Ag & Environment to use tree and vegetation planting to help reduce net carbon emissions on beef farms through carbon sequestration. The supermarket is the first project to pilot the method, known as insetting, as part of the government’s Climate Active program. Carbon stored in the trees planted is included in the beef farm’s carbon account and reduces associated emissions with the farm’s production. It will also purchase Australian Carbon Credit Units (ACCUs) from the Armoobilla Regeneration Project in south west Queensland to cover emissions that fall out of its scope of insetting measures, including processing and transportation emissions. The beef will be gradually rolled out across the country over the next 12 months.

The air up there – Singapore and New Zealand need to redouble their efforts on sustainable aviation as they emerge from the Covid-19 pandemic, or risk having emissions rise as air travel recovers from the pandemic, said Singapore’s Transport Minister S Iswaran, Channel News Asia reports. Iswaran made the comments at Jewel Changi Airport, where he and New Zealand Prime Minister Jacinda Ardern witnessed the signing of an arrangement to work together on sustainable aviation. The memorandum of arrangement (MOA) is one of the first initiatives under the new climate change and green economy pillar that Singapore and New Zealand have added to an existing partnership covering different areas. Under the arrangement, the countries will collaborate and share information on sustainable aviation initiatives in four key areas: Policy and regulation, industry development, future infrastructure planning and provision, and workforce transformation. Separately, Air New Zealand is encouraging passengers to do their bit to reduce carbon emissions when flying by packing light to help reduce the weight of aircraft, stuff.co.nz reports. In an email to Airpoints members on Tuesday, Air New Zealand CEO Greg Foran outlined details about the airline’s “most important journey yet” – what it’s called, and trademarked, Flight NZ0. The fictitious flight number represents “a new era of air travel” that reduces carbon emissions in order to achieve Air New Zealand’s target of net zero emissions by 2050, he said. Foran said achieving the target required a combination of sustainable aviation fuel, zero emission aircraft technology, fleet renewal and efficient ground and flight operations. He said there were three ways customers could make a difference; travel light, carbon offsetting and choosing sustainable activities at their destination.

Transition funds – Japan’s state-backed New Energy and Industrial Technology Development Organization said it will allocate 114.5 bln yen ($892 mln) to help develop new fuels, such as synthetic, that emit lower CO2, Business Times reports. The financial aid comes as part of the country’s 2 trillion yen green innovation fund to promote development of cleaner energy and technology to help the world’s fifth biggest CO2 emitter achieve carbon neutrality by 2050. Nearly half of the budget will go to the synthetic fuel project by Japan’s biggest refiner Eneos, which aims to complete development of the technology by around 2030, with an aim to commercialize the fuels before 2040.

AMERICAS

New in Nassau – The government of the Bahamas is preparing to table legislation that will open the door to the country’s participation in the global carbon market, according to Prime Minister Philip Davis, and reported by Eye Witness News. “We recognise that carbon prices and markets are evolving quickly. Saleable, verified, emission reductions or removal credits, or other carbon mitigation measures under the standards of the Paris Agreement, can be a key tool for addressing the climate finance gap and a catalyst for carbon action,” he said when addressing the Seventh Ministerial Meeting of the Coalition of Finance Ministers for Climate Action. According to Davis, small-island developing states must take steps to ensure they can profitably participate in global carbon market initiatives. “Multilateral efforts to pair our countries with countries that have had experience in placing carbon credits under the Kyoto Protocol Clean Development Mechanism and other voluntary marketplaces, will be critical to our advancement in this emerging financing market. As our country prepares to table legislation that will allow our participation in the global carbon market, we are open to partnerships with other Small Island States and with countries who have advanced expertise in the carbon markets,” he added.

Difficult, but not impossible – Canadian federal environment minister Steven Guilbeault ­– a former Greenpeace activist – said it will become increasingly difficult for companies to gain approval for new oil projects as environmental regulations ramp up, but that he is not closing the door on future offshore development, CBC reports. Guilbeault said it’s up to the Impact Assessment Agency, not the federal environment minister, to make decisions on future offshore oil projects – and that approval process has become more stringent. Earlier this month, Guilbeault controversially approved the massive Bay du Nord oil project, which Norwegian oil company Equinor is proposing to build about 500 km off the coast of Newfoundland. “In an ideal world we could stop using fossil fuels tomorrow morning. That would be the best-case scenario,” he said. “The reality is that we can’t.”

Fission funds – President Joe Biden’s administration moved Tuesday to revive the US’ troubled nuclear power industry with $6 bln in spending aimed at keeping open financially strapped plants. Most of the funding via the Department of Energy would be allocated through a credit programme, which aims to give a financial lifeline to plants facing imminent shutdown for economic reasons. The first round of credits are set aside for plants that have already announced plans to close, and there are at least two such operations in the US: Diablo Canyon in California and Palisades in Michigan. (Washington Post)

Sequestration valuation – Oil major ExxonMobil estimates there will be a $4 trillion market by 2050 for capturing CO2 and storing it underground, the company said in a presentation on Tuesday. That is about 60% of the $6.5 trillion market the US largest crude producer estimates for oil and gas by then. (Reuters)

Jersey Shore sequestration –New Jersey Governor Phil Murphy’s (D) administration on Wednesday announced it is launching a new blue and green carbon grant programme that will invest $15 mln projects across the state that create, restore, and enhance salt marshes, seagrass beds, forests, and urban parks that sequester CO2. The Natural Climate Solution Grant Program will derive its funds from RGGI auction revenues, with project grant awards ranging from $250,000 to $5 mln.

VOLUNTARY

Working on it – Offset standard manager and developer Verra on Tuesday said it is implementing several changes to solve prolonged processing times for project listings, project registrations, and credit issuances in its VCS programme. These include supporting and strengthening the capacity of validation and verification bodies, streamlining the work of staff members responsible for processing listings, registrations, and issuances, and implementing new tools for tracking project review requests. Read Carbon Pulse’s analysis of why a labour shortage among verifiers and registry bodies is likely to cause the current bottleneck in offset issuances to last through 2022.

More like Bunglesliga – The majority of football clubs in the German Bundesliga have not yet set themselves a climate neutrality target with concrete steps for the 2021/2022 season, according to a survey from non-profit myclimate. In contrast, almost all of the respective host cities of the clubs have already set a target year for climate neutrality, and marked corresponding interim targets to get there. Four teams (FSV Mainz 05, TSG 1899 Hoffenheim, VFL Wolfsburg and FC Köln) say they have already achieved climate neutrality, and two more teams have set carbon and climate neutrality targets (Arminia Bielefeld and Hertha BSC). “This shows that it is already possible [to be climate neutral] at this point in time – even for Bundesliga clubs,” said myclimate managing director Stefan Baumeister. “In the future, it will be important for them to continue working on reducing the proportion of CO2 emissions that are being offset today.” The remaining 12 of the 18 clubs surveyed have not yet committed to a specific year for neutrality. (Clean Energy Wire)

AND FINALLY…

Asset mismanagement – Giant global asset managers are still dumping tens of billions of dollars into new coal projects and hundreds of billions of dollars into major oil and gas companies, according to a report Wednesday from Reclaim Finance, an organisation disclosing financial sector investments in fossil fuels. The report found that collectively 30 asset managers have $82 bln companies developing new coal projects and $468 bln in 12 major oil and gas companies. The majority of the asset managers — 25 of the 30 — are members of the Net Zero Asset Manager Initiative (NZAM), which is a collective of asset managers that seek to support investing aligned with reaching net zero global emissions by 2050 or sooner. Yet none of the 30 asset managers surveyed by the report have required companies in their portfolios to quit coal, oil and gas projects, according to Reclaim Finance. (CNBC)

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