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Senior MEPs have reached a comprehensive early deal on EU ETS reforms just days ahead of a crunch vote, with compromises emerging on higher overall ambition and on curbing the role of speculators, according to meeting notes seen by Carbon Pulse.
California’s WCI-linked cap-and-trade system will play a slightly smaller role in achieving the state’s 2030 climate target due to more complementary policies, with regulator ARB either punting any reform measures to the legislature or conducting them after the final Scoping Plan is completed, according to the draft plan published Tuesday.
A preliminary injunction to temporarily block Pennsylvania’s cap-and-trade regulation would prevent the state from participating in the Q3 RGGI auction, Governor Tom Wolf’s (D) administration argued Tuesday as Republican lawmakers and the coal industry claimed that the programme is unconstitutional.
The Canadian province of British Columbia will broaden the scope of its Low Carbon Fuel Standard (LCFS) to include aviation and marine fuels, as well as allow direct air capture projects to earn credits, the government announced Monday.
Aviation’s non-CO2 climate impact is unregulated and thought to account for two-thirds of the industry’s fast-rising GHG emissions, but EU lawmakers are demanding further work under proposed legislation in what could eventually lead to a drastic increase in carbon costs for carriers.
EUAs ended slightly higher on Tuesday after trading in their narrowest range for more than a week, while gas prices jumped on news that pipeline supply at a major entry point would be suspended on Wednesday.
Czech utility CEZ reported a 10% drop year-on-year in EU ETS-covered fossil generation during Q1 2022, citing high gas and emissions prices in its first-quarter financial results on Tuesday.
A Chinese asset management company has teamed up with a project developer to supply millions of offsets to an investment trust that will be the first of its kind in China.
SK E&S, an energy subsidiary of South Korean conglomerate SK Group, will invest $110 million in a CCS project that aims to capture and store CO2 from over thirty ethanol plants in the US mid-west, the company announced on Tuesday.
A collaboration of major global banks announced on Tuesday it had facilitated a carbon offset trade between a corporate client and project developer through a new settlement platform due to be fully operational by the end of the year.
Offset developer and consultancy South Pole announced another acquisition on Tuesday, continuing its wave of acquiring companies with local and global expertise in recent months and bolstering its digitisation offering.
Emissions from corporate jets and business flying came under the spotlight Tuesday as an NGO report ranked the aviation greenhouse gas targets of 230 of some of the largest companies from Europe and North America and took a dim view on offset use.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
End of an era? – An inquiry by a human rights commission in the Philippines found some of the world’s largest historic polluters liable for causing global heating – giving fresh impetus to lawsuits centering climate change as a human right issue. The much-delayed publication of the seven-year inquiry’s findings show that 47 coal, oil, mining and cement giants “engaged in wilful obfuscation of climate science”, obstructed efforts towards a clean energy transition and delayed meaningful climate action. Among the “carbon majors” concerned are BP, Chevron, ExxonMobil, Glencore, Shell, Suncor, Total and RWE. The report found that “at the very least, [their acts] are immoral” and may form the basis for liability depending on national jurisdictions. The continued expansion of fossil fuel exploration provides further legal grounds to hold companies accountable, it said – handing campaigners with the legal arguments for seeking climate reparations through the courts. “The results… will serve as crucial building blocks for community-led efforts to hold the fossil fuel industry accountable around the world,” said Greenpeace, which filed the petition with local groups. “The era where the fossil fuel industry and its backers can get away with and profit from their toxic practices is coming to an end,” added Yeb Saño, head of Greenpeace Southeast Asia. The inquiry report is among a flurry of proceedings to frame climate change as a human rights issue. The multi-year investigation began in 2013 following a petition by survivors of Typhoon Haiyan, which killed 6,000 people and was made more extreme by climate change. The findings are based on hearings in the Philippines as well as in New York and London, scientific and legal evidence and 65 witness testimonies. Only a handful of the 47 carbon majors responded to the inquiry, mostly to dismiss the process. (Climate Home)
Brussels’ sun-chasing – The European Commission hopes to jumpstart a large-scale rollout of solar energy and rebuild Europe’s solar manufacturing industry, as part of its bid to wean countries off Russian fossil fuels, a draft document seen by Reuters showed that is part of the RePowerEU package of proposals due to be published next Wednesday. Brussels would require member states to take action this year to limit permitting times to three months for rooftop installations and push the countries to use EU funding and launch support programmes for rooftop panels, and install solar energy in all suitable public buildings by 2025. Other proposed schemes would focus on skilling solar sector workers and use the bloc’s budget and direct the EU ETS-derived Innovation Fund to support investments in manufacturing. A separate draft document would tweak EU law to fast-track permitting deadlines for some renewable energy projects. Read Carbon Pulse’s latest on the RePowerEU initiative.
Doable renewables – The European Commission is looking to increase the EU’s renewable energy target for 2030 as part of plans due next week, which also include faster permitting rules for new projects and a solar strategy that could make rooftop solar mandatory for all new buildings, according to leaked proposals seen by Euractiv. The proposals are expected to be published on May 18 as part of EU plans to reduce dependence on Russian energy following the invasion of Ukraine. Speeding up the transition to renewable energy will reduce emissions and Europe’s dependency on energy imports as well as provide affordable energy prices to EU citizens and businesses, according to the draft obtained by EURACTIV. Given the pressing need to accelerate the deployment of renewable energy, the EU renewable energy target should be increased, it continues. The new target is not decided yet, with the new percentage showing as “XX” between squared brackets in the proposal, which would amend the EU’s renewable energy directive. The European Commission last year already proposed raising the EU’s renewable energy target to 40% by 2030, up from 32% currently. The proposal was part of the Fit for 55 package of climate legislation tabled in July. But with the war in Ukraine, the Commission is considering ways to accelerate those plans. In the European Parliament, there is already strong support for increasing the renewables target to 45% by 2030. And there are also moves among some EU governments to support increased ambition on renewables, although it is less clear whether there is a majority among them to back this.
Driving change – The European Parliament’s environment committee (ENVI) is due to vote on mandatory CO2 standards for car manufacturers on Wednesday, Euractiv reports, with the possibility of calling for a 70% reduction target by 2030. Manufacturers are already being pushed to build cars that emit less CO2, including electric vehicles. Wednesday’s vote will determine how fast companies will have to transition production and when they will have to stop selling combustion engine vehicles. The phaseout date for combustion engine vehicles is a topic that is “regularly reopened, mainly by the EPP [European People’s Party, centre-right], which considers that there should be no end to the combustion engine in 2035,” Pascal Canfin, ENVI committee chairman, told a press briefing on Monday. At the vote, MEPs are expected to propose a target of 70% reduction by 2030 in the number of vehicles being produced that emit GHGs. By comparison, the European Commission has set a 55% reduction target for reducing CO2-emitting vehicles for 2030, and a full phase-out for 2050. However, it may be difficult for the ENVI committee to adopt the ambitious 70% proposal. According to Canfin, “there is a progressive majority, from Left to Renew, plus a few EPP members who would not support an EPP line that is too conservative”. He added, “this majority is narrow, 2 to 3 votes maximum, but it exists,” he added. If the two-thirds majority is not reached, the EPP’s line may be closer to being adopted.
Not for long – Germany and Qatar have hit difficulties in talks over long-term LNG supply deals amid differences over key conditions, including the duration of any contract, three people familiar with the discussions told Reuters. Germany, which aims to cut its carbon emissions by 88% by 2040, is reluctant to commit to Qatar’s conditions to sign deals of at least 20 years to secure the massive LNG volumes it needs to reduce its dependence on Russian gas, the people said.
Emergency measures – German officials are quietly preparing for any sudden halt in Russian gas supplies with an emergency package that could include taking control of critical firms, three people familiar with the matter told Reuters. The preparations being led by the Ministry for Economic Affairs show the heightened state of alert about supplies of the gas that powers Europe’s biggest economy, and is critical for the production of ETS-covered steel, plastics, and cars. Germany has said it wants to wean itself off Russian supplies but expects to be largely reliant on Moscow for gas until the middle of 2024.
Rhine reach – Local politicians in the western German state of North Rhine-Westphalia (NRW) say the region that heavily relies on coal power and mining can achieve its goal to end the fossil fuel’s use by about 2030 despite the energy supply crisis exacerbated by Russia’s war in Ukraine. Ahead of the May 15 elections in NRW, Germany’s most populous state, the Rheinische Post interviewed representatives of the major parties in the Erkelenz coal mining region. Thomas Schnelle of the governing conservative Christian Democrats (CDU) said the 2030 exit would remain a “realistic goal” but warned against fixating on a date. “There’s a certain confusion regarding the 2030 exit now that we face the risk of having to do without Russian gas,” as gas was planned to be a bridging technology in the state, he said. A decision should be made no later than 2026 and the current urgency could help to speed things up, Schnelle argued. An end to coal by 2032 would still be acceptable, he added. Heike Simons of the Social Democrats (SPD) said her party would adhere to the 2030 exit date, adding that villages in the region currently threatened by further mine expansions should be saved. “We have other options for generating energy,“ Simons said, stressing that “bureaucratic hurdles” for renewable power have to be removed to ensure national stability. Green Party candidate Paul Mank said the phaseout in NRW should be achieved “significantly earlier” than 2030 to save villages and speed up the roll-out of renewables. Tino Pakusa of the Free Democrats (FDP), junior partners in the government coalition, said a 2030 exit would remain “desirable” but warned that supply security could not be put in jeopardy for it. “We need to provide the legal requirements for a coal phase-out” that ensure supply is kept stable and alternative sources are identified quickly. “Once this plan is agreed, we can really say until when the phase-out can be completed.” (Clean Energy Wire)
Royal reveal – The UK’s Prince Charles delivered the Queen’s Speech highlighted some of the 38 laws that the British government intends to pass in the coming year. Among them is an energy security bill, which the Prince said will build on the success of last year’s COP26 UN climate summit in Glasgow. Briefing notes show the government intends to extend the country’s energy price cap beyond 2023 to combat soaring energy bills. The notes also confirmed government plans to introduce business models to incentivise CCUS, low carbon hydrogen, and industrial carbon capture.
Legislative creep – Alberta’s highest court ruled on Tuesday that a Canadian law assessing how major infrastructure projects like pipelines impact the environment is unconstitutional because it interferes with the power of the provinces. The Alberta Court of Appeal said the Impact Assessment Act (IAA), passed in 2019, was a “classic example of legislative creep” and intrudes on provincial jurisdiction. The decision is a win for Alberta Premier Jason Kenney and his United Conservative Party government, which brought the legal challenge against the act. However, the federal government plans to appeal the decision in the Supreme Court of Canada. (Reuters)
Twenty-one and up – More than 330 Brazilian environmental and Indigenous organisations have submitted a letter to the US House Foreign Affairs Committee in support of the proposed “Amazon21” legislation, according to AP. The bill, introduced in the House, last November would create a $9bln fund, administered by the US State Department, supporting forest conservation efforts in the Amazon rainforest. The fund would ensure transparent and straightforward financing of subnational entities and Indigenous people directly involved in conservation activities.
Wind in the water – The California Energy Commission is looking to build 3 GW of offshore wind power by 2030, and another 10 to 15 GWs by 2045, according to a draft report released Friday. The Bureau of Ocean Energy Management this month cleared the leasing area for potential environmental impacts, and California has some of the most windy shore lines in the US. Research from Energy Innovation, GridLab, and Telos Energy found the state could reach 85% renewable electricity by the end of the decade. (Utility Dive)
I don’t follow – A shareholder proposal that would have required US oil producer ConocoPhillips to set carbon emissions goals in compliance with the Paris Agreement failed, receiving 39% of shareholder votes on Tuesday. The proposal, sponsored by Dutch climate group Follow This, received fewer votes at this year’s ConocoPhillips annual meeting than the 58% majority a milder proposal received in a poll in 2021. The 2022 ConocoPhillips emissions proposal called for the company to align itself with 1.5C-aligned targets, and to set specific goals to be net zero by 2050 across Scopes 1-3. Follow This blamed the lower vote for the recent proposal on its specific nature, which moved the goal line from a general emissions reduction to Paris-compliant goals. The activists also said the oil company’s investor base may have fewer climate-conscious shareholders because of disinvestment and said Conoco may have succeeded in convincing shareholders that exploration and production companies, or E&Ps, should not be subject to Scope 3 emissions goals. (S&P Global Platts)
BP moves on WA H2 – BP is reportedly set to take a stake in the A$48 bln($36 bln) Asian Renewable Energy Hub ammonia export project (AREH) in the Pilbara, Western Australia, RenewEconomy writes, first reported by The Australian. The oil and gas supermajor has negotiated the acquisition of a major stake in the hub with the current partners in the scheme – Intercontinental Energy, CWP Global, Vestas, and Macquarie’s Pathway Investments – and would take charge as the project’s operator when the deal was complete, two sources with knowledge of the discussions said. BP is believed to be preparing to announce its involvement at a major hydrogen conference in Rotterdam this week, ahead of its annual meeting on Thursday. It is unclear how large the stake BP will claim, but it is expected to take around 30%. The massive AREH will feature 26 GW of wind and solar spread over some 660,000ha, which will power 14GW of electrolysers to convert desalinated seawater into green hydrogen, which would then be converted to ammonia for export. It is one of the largest proposed hydrogen projects in the world, and one of several mammoth renewable energy and hydrogen project in development in Australia’s top end. A final investment decision on the project is slated for 2025, with first exports by 2027. Oil and gas giants are investing more and more cash in renewable energy and hydrogen in a bid to broaden their green credentials and achieve their decarbonisation goals. Last week Shell brokered a deal to buy Indian renewable energy supplier Spring Energy for $1.55 bln. The company has 2.1GW of operational renewable energy assets in its portfolio.
We need your help – The emerging renewable hydrogen sector in Australia needs governments to deliver policies and incentives to help their project proposals get off the ground, according to an annual survey from the Clean Energy Council. Members nominated “government funding to help projects achieve scale” as the most important priority for industry development in the next 1-2 years, followed by “local demand creation,” and “lowering the cost of renewable electricity projects.” Carbon pricing was also identified as the most effective policy for stimulating renewable hydrogen demand, followed by subsidies for fuel switching for industrial users, and decarbonisation targets for specific sectors. Chemicals and fertilisers, heavy road transport, and local steel manufacturing were the top three areas that government should be prioritising on the demand side for hydrogen use.
Not-so-nifty fifty – There is a 50% chance that over the next five years the world will temporarily warm by more than 1.5C above pre-industrial temperatures, according to analysis by the UK Meteorological Office. As recently as 2015, there was zero chance of this happening in the following five years. But this surged to 20% in 2020 and 40% in 2021. The global average temperature was 1.1C above pre-industrial levels in 2021. It is also close to certain – 93% – that by 2026 one year will be the hottest ever recorded, beating 2016, when a natural El Nino climate event supercharged temperatures. It is also near certain that the average temperature of the next five years will be higher than the past five years, as the climate crisis intensifies. (Guardian)
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