Newsletters > CP Daily: Monday May 9, 2022

CP Daily: Monday May 9, 2022

Published 01:17 on May 10, 2022  /  Last updated at 01:30 on May 10, 2022  / Carbon Pulse /  Newsletters

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

Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here

TOP STORY

Switch from coal to renewables cheaper than shifting to gas, report finds

The rapidly declining cost of renewable energy with battery storage, coupled with increasing volatility in gas prices, now reflect that it is cheaper to make the switch from coal to clean sources of electricity than it is to shift from coal to gas-fired power, research released on Tuesday has found.

EMEA

MEP battle continues on free ETS allocation as early deal eludes negotiators

Senior MEPs have failed to strike an early compromise over how quickly to replace EU ETS free allocation with a carbon border adjustment mechanism (CBAM), with an interim vote likely to favour a more rapid transition even as the European Parliament remains sharply divided.

Euro Markets: Carbon consolidates after early leg lower on weak auction, as energy drops on ruble payment report

EUAs consolidated after early losses on Monday after the daily auction cleared at a significant discount to the prevailing market, while energy markets weakened amid signals from Gazprom that a break in natural gas supplies could be avoided, and a continuing trend of worsening macroeconomic indicators.

Firms team up to launch carbon capture plans for lime production in France

France’s biggest lime production plant is set to undertake an industry-first carbon capture project for the EU ETS-covered sector after teaming up with a major fuels provider.

VOLUNTARY

VCM Report: Market continues to wait for demand return as VERs soften further

Weak demand for technology-based voluntary emissions reduction (VERs) credits kept prices pointing to the downside over the past week, while nature-based offsets offered relatively greater resilience, moving sideways or to marginal week-on-week gains.

ICE launches first futures contracts for voluntary carbon market

Competition intensified in the voluntary carbon market Monday after the London-based Intercontinental Exchange (ICE) launched its much touted first nature-based carbon credit futures contract as it seeks to pinch market share from rival Chicago-based CME.

Delta Air Lines to eventually ramp down VER purchases after 27 Mt procurement for 2021

US carrier Delta Air Lines will shift much of the focus of achieving its CO2 neutrality goal to solutions other than offsets after spending $137 mln on voluntary emissions reductions for its GHG output last year, the company said in a recent report.

Ratings agency assigns views to eight more carbon projects, three upheld

A carbon credit ratings agency has assigned ratings to eight more projects, it said in an update on Monday while upholding the ratings of three that had been flagged for review.

AMERICAS

Vermont Clean Heat Standard bill faces veto override vote this week

Vermont Governor Phil Scott (R) on Friday vetoed a bill that would implement a market-based Clean Heat Standard (CHS), though advocates are confident the Democrat-controlled legislature will override his decision as soon as this week.

Lower Q1 California power emissions hide bleak hydro outlook

CO2 emissions from California’s electrical grid decreased year-over-year in February and March despite rapidly deteriorating hydro levels across the US West, according to California Independent System Operator (CAISO) data published Monday.

ASIA PACIFIC

New Zealand releases domestic emissions budget to 2035

The New Zealand government on Monday set out its first three domestic emissions budgets between now and 2035 ahead of the release of its economy-wide Emissions Reduction Plan (ERP) next week, though impact on the ETS cap was unclear while the nation’s need to buy credits from abroad remains unchanged.

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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

INTERNATIONAL

Oil ban goes international – The G7 club of wealthy nations committed Sunday to phasing out its dependency on Russian oil and issued a scathing statement accusing President Vladimir Putin of bringing “shame” on Russia with his invasion of Ukraine, Euractiv reported. The statement – effectively adding Canada and Japan to the western European nations and US already agreeing a ban – did not specify exactly what commitments each country will make to move away from Russian energy but underscores the unity of the international community against Moscow’s actions. “We commit to phase out our dependency on Russian energy, including by phasing out or banning the import of Russian oil. We will ensure that we do so in a timely and orderly fashion, and in ways that provide time for the world to secure alternative supplies,” the joint statement said.

AMERICAS

Record tree loss – Deforestation in the Brazilian Amazon hit a new record for the month of April this year, more than double the previous record set last year, Reuters reported. In the first 29 days of April, deforestation reached 1,013 square kilometres, according to data from Brazil’s national space research agency Inpe. Deforestation in the Amazon has soared since right-wing President Jair Bolsonaro took office in 2019 and weakened environmental protection. Bolsonaro argues that more farming and mining in the Amazon will reduce poverty in the region.

400% Ontario – GHG emissions from Ontario’s electricity grid are expected to increase by 400% over the next 20 years, according to the province’s Independent Electricity System Operator (IESO). Ontario currently produces some of the cleanest electricity in the world, with roughly 93% of the grid powered by renewable energy, according to the Canada Energy Regulator. On windy days, the province of nearly 15 mln people runs entirely on renewables. But with a nuclear power plant set to retire and Premier Doug Ford’s cancellation of every single renewable energy project four years ago, Ontario will have to lean on its underused natural gas facilities. The Pickering Nuclear Generating Station is one of the world’s oldest nuclear power plants and produces 16% of the province’s electricity. That energy needs replacing as the population grows and demand increases. Currently, Ontario’s natural gas plant’s only run 60% of the year. The IESO estimates those plants will be running non-stop by 2033. Canada’s most populous province just began its month-long election, where Premier Ford is leading polls for reelection. (Toronto Star)

Untapped Maine – Just 3.5% of Maine’s large commercial property owners have sold carbon credit options on their logging and woodlot lands, despite the market existing in the state for 19 years. Owners say selling the credits for not cutting down trees or planting particular crops doesn’t make up for the money lost from reduced logging and agriculture. Meeting rigorous standards was also a barrier cited by major commercial owners in Maine. A task force appointed by the governor began drawing up strategies to convince small landowners to keep their forests intact last fall. The state is losing around 4,000 ha of land to private development every year. Small property owners in Maine have been reluctant to join the programme too, because the high cost to join the programme was designed with big owners in mind. Commercial loggers are put off by the conditions of verifying sections of their forest are alive and storing carbon for 10 to 100 years because of how time-intensive and unfamiliar the companies find forest management. Short-term commercial property ownership has boomed in Maine since the 1990s, disincentivising carbon credit investment. If the logging company plans on harvesting a forest for 10 years and flipping the property, they won’t care about selling the carbon storage. (Maine Monitor)

BC biofuel – Gas station operator and oil refiner Parkland is embarking on a C$600 mln effort to process renewable diesel made from feedstock such as canola oil, animal tallow, and wood pulp byproducts. Parkland says it wants to boost production of biofuels at its Burnaby Refinery to 5,500 b/d from its current 1,500 b/d. The refinery mostly processes oilsands crude from Alberta and plans on producing 890,000 b/d by 2023. The BC government will be contributing to the expansion through the province’s low-carbon fuel standard (LCFS) compliance credits, which could help offset roughly 40% the capital costs. (Globe & Mail)

ASIA PACIFIC

Futuristic ferry – Australia’s Queensland state government has committed A$5 mln ($3.5 mln) to go to SeaLink, which will operate the country’s first green hydrogen powered passenger ferry in the city of Gladstone. PV Magazine reports that the ferry will operate as a shuttle between Gladstone and the LNG facilities on nearby Curtis Island. The government funding is being drawn from the A$35 mln Hydrogen Industry Development Fund for SeaLink to design and build the boat. SeaLink COO Donna Gauci said the vessel will be able to carry up to 200 passengers, at top speeds of up to 37kph, up to a range of 50 nautical miles. SeaLink is part of the Kelsian Group, one of Australia’s largest land and marine transport services. Deputy Premier Steven Miles said the project is the latest green hydrogen project in Gladstone, which is expected to play a key role in the emerging industry because of its existing gas infrastructure. Andrew Forrest’s Fortescue Future Industries is currently building its own hydrogen electrolyser plant in the city, which will have a 2GW capacity when it opens next year.

Hydrogen target – The Western Australia state government is investigating the possibility of a renewable hydrogen target for its main electricity grid in a move to encourage gas generators to go, at least partially, green, RenewEconomy reports. This will be the first such target in Australia, possibly the world, and the government says it expects design work to be completed by the end of this year, and will draw on aspects of the federal government’s renewable energy target. The target would require a percentage of electricity in the South West Inteconnected System to be fuelled by renewable hydrogen. There is currently no indication of what that target would be, but most gas generators can accommodate a 10-20% blend of hydrogen. The WA government is targeting the state to produce up to 100 GW of renewable hydrogen by 2030, mostly for industrial and export purposes.

EMEA

Expensive vehicles – Germany’s transport ministry plans to almost double e-car subsidies to achieve climate targets, but experts and NGOs have criticised the plans as hugely expensive and ineffective. According to an appraisal of the proposals by several research institutes for the government, minister Volker Wissing, a member of the pro-business Free Democrats (FDP), suggests that buyers of EVs costing up to €40,000 receive €10,800 in government support instead of the current €6,000 – in addition to the carmakers’ premium of €3,000. Vehicles costing up to €60,000 could receive €8,400 instead of the existing €5,000, and subsidies would be extended until 2027. From H2 2023, buyers would have to scrap a conventional car to receive the full support, according to the report. The ministry’s proposals also include more than 50 other measures to accelerate the shift to low-emission mobility, including research programmes for climate-neutral aviation, railway digitalisation, and support for public transport. (Clean Energy Wire)

VOLUNTARY

Para problems – A report from Brazilian investigative outlet Publica questions the legitimacy of the Ecomapua Amazon REDD Project’s sale of carbon offsets on Marajo Island in Brazil’s state of Para, according to REDD-Monitor. Since 2014, the project has sold more than 2mln carbon offsets. However, four of the five REDD properties overlap existing reserve areas, according to Publica. Local communities protecting forests in federal extractive reserves haven’t benefited from the sale of lucrative contracts used to offset corporate emissions, as the company running the project, Ecomapua Conservacao, has sold offsets without directly transferring the money to the communities that live in and preserve the forest, the report says.

We all scream… – Ben & Jerry’s has announced the launch of a pilot project dubbed ‘Mootopia’ across 15 of its supplier farms. Seven of the farms are in the US and eight are in the Netherlands. The overarching aim is to bring the emissions intensity of the farms to a level that is half of the US industry average by the end of 2024. Under ‘Mootopia’, the dairy farms will be supported to adopt regenerative agriculture practices for growing grass and other feed crops. Regenerative methods purport to improve soil quality, thus enabling the soil to draw down more carbon. Additionally, they result in lower use of resources such as commercial fertilisers. Ben & Jerry’s has received $9.3 mln from parent corporation Unilever to scale regenerative practices on dairy farms, as part of Unilever’s €1bn climate and nature fund. Farms will also be asked to use a greater percentage of home-grown feed, as feed that has had to travel long distances comes with a greater embodied emissions footprint. Additionally, farms will be supported to reduce methane emissions from cows by giving them rumen modifiers that act as digestive aids. These additives inhibit methanogenesis – the formation of methane by microbes. One of the innovations set to be trialled is a red-seaweed-based supplement from start-up Blue Ocean Barns. This supplement purports to reduce methane emissions from cow burps by some 80%. The other major facet of the ‘Mootopia’ scheme is reducing emissions from manure management. Farmers will be supported to put manure through digesters and separators, reducing emissions and creating resources such as energy and fertiliser. Learnings from ‘Mootopia’ will be used to inform Ben & Jerry’s’ approach to reducing emissions across its global dairy supply chains. (edie)

… for carrots – A Nottinghamshire vegetable co-operative is aiming to produce the world’s first carbon-neutral carrots this year. Fresh Growers (Freshgro) is a cooperative of 10 farmers based in the Nottingham area, supplying premium Chantenay carrots grown within 15 miles of the packhouse to supermarkets and catering customers across the UK. Working together with Campbell-Gibbons Consulting and Intellync-Sustain, the group will be using life-cycle analysis to calculate the carbon footprint of its Chantenay carrot production from field to packhouse. A robust carbon-reduction plan will then be developed alongside purchasing a small number of high-quality carbon offsets to achieve carbon-neutral status for its Chantenay crop. The group hopes to achieve carbon-neutral status by summer 2022. (Fruitnet)

SCIENCE & TECH

Hydrogen truck – Anglo American unveiled a prototype of the world’s largest hydrogen-powered mine haul truck designed to operate in everyday mining conditions at its Mogalakwena PGMs (platinum group metals) mine in South Africa, GreenCarCongress reports. The 2 MW hydrogen-battery hybrid truck, generating more power than its diesel predecessor and capable of carrying a 290-tonne payload, is part of Anglo American’s nuGen Zero Emission Haulage Solution (ZEHS).

AND FINALLY…

Racing gripes – The latest celebrity climate statement came last week in the form of sartorial choice from one of world sport’s stars in the build up to the first ever Miami Grand Prix as German Formula One driver Sebastian Vettel was spotted wearing a t-shirt that said, ‘Miami 2060 – 1st Grand Prix Underwater – Act Now or Swim Later.’ The city of Miami is under threat from sea level rise as the climate crisis melts ice sheets in Greenland and Antarctica. According to Nasa, sea levels will rise in southern Florida between 0.3 metres and 0.69 metres by 2060, the date on Mr Vettel’s shirt. Hard Rock Stadium, where the race took place, would only need about 1.6 m of sea level rise to have part of the complex permanently inundated, according to climate scientists. Under a high sea-level rise scenario, southern Florida could reach that level by the 2080s, according to NASA. Vettel is a star driver for the Aston Martin F1 team and former world champion and the driver is no stranger to environmental causes. Last year, he cautioned that  the sport needed to become more sustainable to survive into the future. He explained his choice of clothing to sports media stating that he finds it alarming and is surprised that races are taking place at a venue that may not be there in 50 years, but that everyone acts as if it’s business as usual. Lewis Hamilton, another of the sport’s most famous drivers, has also spoken out for climate causes in previous years. In 2019, the racing league said that it planned to have ‘net zero’ carbon emissions by 2030, and has said that it is developing sustainable fuel that emits at least 65% fewer GHGs as the current fuel used. (Independent)

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