CP Daily: Thursday May 5, 2022

Published 00:31 on May 6, 2022  /  Last updated at 00:31 on May 6, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Lawmakers near breakthroughs on EU ETS expansion, backloaded effort -sources

Senior MEPs are nearing agreement on parts of EU ETS reform, with alignments emerging on expanding the market to new sectors and backloading cap cuts, according to EU sources on Thursday.

INTERNATIONAL

History lesson: Experts strive to avert past mistakes with new global carbon market mechanism

Criticism abounds for carbon credits stemming from projects that do not result in any additional climate benefits, encouraging experts to figure out how the UN’s new crediting mechanism can avoid making the same mistakes in the post-2020 era.

VOLUNTARY

Election adds uncertainty to fate of PNG’s ban on voluntary market REDD+

The longer-term fate of Papua New Guinea’s moratorium on new REDD+ projects for the voluntary market hangs in the balance amid a complex domestic political situation, with next month’s election adding to uncertainty over whether the government will lift the ban by 2023, as some have speculated.

Bluesource receives first ‘removal’-tagged IFM offsets, as market already bifurcating pricing 

Offset project developer and retailer Bluesource on Thursday announced it has received the first offsets from improved forest management (IFM) projects explicitly tagged as removals, while voluntary carbon market (VCM) participants are already witnessing the price premium commanded by such credits over reduction-based units.

Study raises fresh concerns over soil carbon credits

The concept of handing out offsets to projects adding carbon to soils is flawed because of higher-than-expected mineralisation levels, and funding would be better spent preparing soils to be more resilient to a changing climate, a study has found.

Carbon forest tech firm Pachama secures $55 mln in latest fundraise

California-based tech firm Pachama on Thursday announced it has raised an additional $55 million to develop forest offset projects and technologies that unlock the potential of nature, the latest instance of massive investment sums flowing into the voluntary carbon market (VCM).

US start-up sells another $10 mln of tokenised VCM credits

A US-based technology start-up has pre-sold at least $14 million of its tokens backed by nature-based offsets, after striking a deal to sell at least $10 mln worth of credits to a mobile blockchain platform, it announced Thursday.

CBL platform sees record carbon credit volumes trade in Q1

A record volume of carbon credits traded on Xpansiv market’s CBL platform in Q1, although activity dropped sharply in April, the company announced Thursday.

EMEA

EU’s carbon removals ideas welcomed, provided GHG cuts are prioritised

Stakeholders have largely welcomed the European Commission’s initiative to develop a carbon removal certification mechanism, so long as emissions cuts remain the EU’s priority and the bloc clarifies the relationship between removals, the EU ETS, and the voluntary carbon market.

ICIS analysts tout benefits of Brussels’ idea to frontload EUA auctions for Innovation Fund

Frontloading more EUA sales over the next two years to raise cash for the bloc’s Innovation Fund would help accelerate the clean energy transition with limited bearish impact on carbon prices, ICIS analysts said in a position paper that suggests various scenarios for an upcoming EU proposal.

Euro Markets: EUAs touch ten-week high before late selling amid worsening economic outlook

EUA prices rose briefly above €91 for the first time in ten weeks on Thursday, as technical buying emerged after the market broke through a key resistance level, before prices retreated amid yet more signs of weakening global economic conditions.

Utilities Enel, EDP report surge in ETS-covered fossil output in Q1 on low hydro

Italy’s Enel and Portugal’s EDP both reported a surge year-on-year in ETS-covered fossil generation in Q1 2022 due to weak hydro production and a rise in demand, according to quarterly reports.

AMERICAS

NA Markets: CCAs meander on light speculator inflows, compliance demand firms up RGAs

California Carbon Allowance (CCA) prices vacillated this week as activity remained light ahead of the Q2 WCI auction, while bid-side interest in RGGI Allowance (RGAs) was robust on reported demand from emitters.

Dominion Energy asks to suspend current RGGI rider before potential de-linkage

Utility Dominion Energy on Thursday asked Virginia to suspend its existing rate case to recover RGGI allowance costs, as the company anticipates Governor Glenn Youngkin (D) will remove the state from the power sector cap-and-trade programme.

Pennsylvania court reschedules RGGI preliminary injunction hearing for next week

The Pennsylvania Commonwealth Court has rescheduled a hearing for next week where GOP lawmakers and the coal industry seek to block the implementation of the state’s RGGI-linked cap-and-trade regulation in July.

ASIA PACIFIC

China ramps up coal funding amid energy security concerns

China’s central bank is ramping up its support for the coal industry in a latest sign that energy security concerns are currently overriding climate policy priorities for the world’s top greenhouse gas emitter.

Timor-Leste strikes carbon credit arrangements with Korean conglomerate

The Timor-Leste government has struck an agreement with a major South Korean emitter to develop large-scale forest carbon opportunities as well as CCS.

Australia’s Woodside to launch pilot project to convert GHGs to ethanol

Australian oil and gas company Woodside plans to develop a carbon-to-products pilot project with the use of technologies being developed by two US-based companies, it announced on Thursday.

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CONFERENCES

IETA European Climate Summit 2022 – May 24-25 in Barcelona: Join us for the 4th edition of this IETA-led European summit, bringing together leading private sector experts and policymakers from both the carbon and energy world, to analyse and discuss the current state of play, and what’s next for compliance and voluntary markets.  Why attend?  1. gain a comprehensive understanding of current and forecast carbon market drivers and developments; 2. how are we implementing our transition to a net zero economy, both on the ground and through policy; 3. understand the pricing evolution, risk profile, and investment opportunities across the compliance and voluntary carbon markets; 4. what/how/why of digital climate assets. www.europeanclimatesummit.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

AMERICAS

Good sign – Two major climate moves are heading to the full Senate after advancing out of committee on Wednesday, with resounding bipartisan support. According to Politico, the Senate Foreign Relations Committee advanced the Kigali Amendment to the Montreal Protocol out of committee with only one Republican dissenting vote, paving the way to ratify the global agreement to phase down hydrofluorocarbons. And the Senate Environment and Public Works Committee unanimously advanced the 2022 Water Resources Development Act, which has a much heavier focus on climate resilience and environmental justice than in previous years.

Not a good sign – The leaked draft opinion that signals the US Supreme Court would overturn Roe v. Wade has sparked fear not only among abortion activists, but also environmental lawyers who say the federal government should have expansive legal authority to tackle the climate crisis. The draft opinion, published by Politico on Monday, indicates that at least five conservative justices are willing to cast aside long-standing precedent to achieve major objectives on the political right, these environmental lawyers told The Washington Post. That does not bode well, they said, for the Supreme Court’s forthcoming decision in West Virginia v. EPA, a challenge to the Environmental Protection Agency’s authority to regulate carbon emissions from the power sector, the country’s second-largest source of planet-warming pollution. The case was brought by coal mining companies and Republican attorneys general who say the Clean Air Act does not permit the EPA to make sweeping changes to the way the nation’s power sector produces electricity. The case comes before a Supreme Court that’s even more conservative than the one that stopped the Clean Power Plan, the Obama administration’s strategy to drastically curb power plants’ carbon emissions, in 2016.

Capture commitment – The US Department of Energy intends to commit $2.25 bln for projects to store CO2, it said on Thursday. The funding for carbon storage validation and testing over the next five years will come from the bipartisan infrastructure bill signed by President Joe Biden last year. The programme will look at storing carbon from projects including capturing emission from power plants and other industrial sites or removing carbon directly from the air. It will look at potential storage sites both onshore and offshore, such as at depleted oil and natural gas fields under the seabed in the Gulf of Mexico. (Reuters)

Chile’s green tax – Chile’s energy and environment ministries are taking steps aligned with President Gabriel Boric’s campaign promises to bolster the country’s climate policies, as reported by bnAmericas. Chile’s tax reform plan, expected in June, will include a “green tax reform” element, according to environment minister Maisa Rojas – who is also a renowned climate scientist. Boric’s campaign also supported an accelerated closure of the nation’s coal-fired power plants, with the energy minister confirming that his ministry is currently analysing the issue with the intent to bring forward the date by as much as possible. Chile was the first Latin American country to present its long-term climate strategy to the UN ahead of COP26 in Glasgow in November, with its 2020 NDC submission committing to reach climate neutrality by 2050. **Read about President Boric’s climate campaign pledges in the Carbon Pulse article here**

Ministerial might – Canada’s federal environment minister is pushing back on oil industry executives who said they needed more government help for carbon capture projects in the oilsands. The federal government is offering a 50% tax credit to oil companies’ investment in carbon capture technology, but Canadian oil companies are asking for an additional 25% rebate from the provincial government in Alberta. Cenovus CEO Alex Pourbaix told a conference call the current credit wasn’t enough and carbon capture likely wouldn’t become reality is the oilsands for another two or three years. It was on that same conference call that Cenovus reported its quarterly profit had increased seven times and the Calgary firm tripled its dividend. Environment Minister Steven Guilbeault said oil companies like Cenovus should invest those profits in curbing GHG emissions instead. Canadian oil companies across the board have been major gains in profits as Russia’s war with Ukraine stifles supply. (Canadian Press)

EMEA

Not price alone – Even with significantly higher CO2 prices on transport and heating fuels, Germany will not reach targets set in the country’s Climate Action Law, according to a report commissioned by the German Environment Agency (UBA). Germany in 2021 introduced its nEHS fixed carbon pricing mechanism covering the sectors. The report found that the pricing would help a faster EV roll-out but further instruments would be necessary including the provision of public transport. For buildings, the report said more was needed to force early boiler replacements. (Clean Energy Wire)

Gas rush – Germany is rapidly pushing several infrastructure projects for the import of LNG in order to wean itself off Russian natural gas. Economy and climate minister Robert Habeck visited the kick-off ceremony for the construction of Germany’s first LNG terminal at Wilhelmshaven, and signed contracts for four floating liquefied gas units. At the same time, the northern state of Lower Saxony and the federal government agreed to establish an industrial-scale import infrastructure project for climate-friendly gases by the end of 2025. But NGO Environmental Action Germany called for an immediate halt to building the Wilhelmshaven facility, saying it threatens to destroy an underwater habitat. Separately, renewables accounted for 50% of electricity consumption in Germany in Q1 – around nine percentage points more than the same period last year, according to a report by the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW) and the German Association of Energy and Water Industries (BDEW). (Clean Energy Wire)

Terra-what?! – In light of the unprovoked Russian war on Ukraine, a joint letter from five EU member states calls for an acceleration of the renewable transition to phaseout energy dependency on Russia, while also achieving climate goals and shielding Europeans from energy price spikes. The letter penned by Austria, Belgium, Lithuania, Luxembourg and Spain, points to analysis that the continent has significant potential to improve ‘business as usual’ solar ambition and aim for at least 1 TW of installed solar in the EU by 2030. The current capacity installed is around 165 GW. Signatories called for an EU Solar Act within the European Commission’s expected REPowerEU update later this month. The letter recommends that any EU Solar Act should establish solar rooftops as the norm for all new and renovated buildings, maximise the potential of prosumers, unlock an EU Solar Manufacturing Fund, and ensure the necessary solar workforce to implement the transition. (PV Magazine)

Not in favour – Shareholders dealt an embarrassing blow to Barclays’ climate credentials on Wednesday, with almost 20% rejecting the bank’s climate strategy as activists disrupted its annual meeting to protest against the bank’s financing of fossil fuels. Barclays said on Wednesday that 19.19% of voting shareholders were against the bank’s climate strategy, which set out its plans and progress towards goals to reach net zero emissions by 2050. It capped an embarrassing annual meeting for the bank, where climate activist groups, including Extinction Rebellion and its offshoot, Money Rebellion, set off alarms and glued themselves to chairs in order to avoid being removed from the Manchester Central Convention Complex. (Guardian)

ASIA PACIFIC

Coal conundrum – Australian energy giant AGL has told investors it will consider earlier closures of its coal-fired power plants if it is confident the grid can handle their withdrawal, as it seeks to fend off billionaire Mike Cannon-Brookes’ campaign to scuttle its proposed demerger, The Age reports. Cannon-Brookes, the co-founder of software giant Atlassian and one of Australia’s richest people, earlier this week amassed an 11.3% interest in AGL to become its biggest shareholder, declaring he wants to block AGL’s plans to split off its power stations into a new entity that would continue burning coal for more than 20 years.

FFI’s High H2 Hopes – Fortescue Future Industries would need some 450 GW of wind and solar by 2030 if it is to meet its ambitious target of producing 15 mln tonnes of green hydrogen by 2030. RenewEconomy reports that the wind and solar would power 150 GW of hydrogen electrolysers, FFI New South Wales head Joshua Moran told the Smart Energy Conference on Thursday. To put that into context, 450GW is nine times the current capacity of Australia’s National Electricity Market. Global electrolyser production is currently around 1 GW, although FFI plans to double that with a new factory it is building in Gladstone, Queensland. FFI will need to deliver 20 GW of electrolysers a year by around 2029, and it will need to build twenty 80m wind turbine blades per day in that time, and around 31 million solar modules per year. Moran admitted the numbers sounded “silly,” but said that’s what was needed for it to reach the company’s targets. So far the company has only revealed plans for a 5.4 GW wind and and solar operation in the Pilbara, Western Australia, and a deal to take the output of several gigawatts of renewable energy capacity as part of its Gibson Island project. FFI’s overall goal is to decarbonise its parent company’s mining operations, and for it to become a global energy exporter in its own right.

SCIENCE & TECH

Green is cheap – Milwaukee-based Advanced Ionics has launched a new water vapor electrolyser that is designed to operate in conjunction with commonly available waste or process heat from industry, PV magazine reports. The Symbiotic Electrolyses system runs at temperatures below 650C, and is reportedly able to produce hydrogen for $0.85/kg or less. “This electrolyser is the first to work across a wide range of temperatures, from 100C to 650C,” a company representative said. “Our Symbiotic technology is a new class of electrolyser. It is not alkaline, PEM, or Solide Oxide (SOEC).” Alkaline, anion exchange membrane (AEM), and polymer electrolyte membrane (PEM) are cold electrolysers using liquid water. Solid oxide electrolysers are hot electrolysers working with heated steam, corresponding to higher efficiency, while the company’s electrolyser operates with temperatures in between. The idea is that temperatures in between allow for high efficiency, while also using cheaper materials for the large-scale assembly, including the stack.

Baking ourselves – Levels of CO2 in the atmosphere during April reached the highest levels on record for any calendar month, averaging 420 ppm for the first time since observations began in 1958, according to new data, Axios writes. Studies show current levels are higher than at any time in as long as 4.5 million years. This is up from 316 ppm at the start of the Mauna Loa record, and 400 ppm in 2013. The annual peak typically occurs in May and could be higher than 420 ppm.

AND FINALLY…

Home help – Working-from-home setups popularised by the coronavirus pandemic are eroding some of the climate benefit of abandoned commutes, Reuters reports, after surveying 20 major tech and finance firms. It found that half of them had estimated emissions from home offices, reporting varying emissions cons and benefits, but are divided on what to do about these emissions as there is no agreed standard on how and what to count. For example, Facebook’s Meta bought RECs to cover remote workers’ power use but is not offsetting home office gas use. Salesforce and Alphabet excluded home-office electricity from their 100% renewables goals as they weigh different initiatives for home use. Both, though, buy carbon credits to offset estimated emissions from telework.

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