CP Daily: Monday May 16, 2022

Published 01:57 on May 17, 2022  /  Last updated at 02:00 on May 17, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

NZ releases long-term plan to cut emissions, but saves ETS cap adjustments for later

The New Zealand government released its economy-wide Emissions Reduction Plan on Monday, however it has conceded that the technology needed to cut emissions from one of its most polluting sectors – agriculture – is still some years away.

VOLUNTARY

VCM Report: Market continues slide as tech credits fall to 9-month low

Buying sentiment remained extremely weak across the voluntary carbon market (VCM) as the value of technology-based credits in particular continued to plummet, with multiple standardised exchange-traded offset contracts falling to their lowest end-of-week settlement since August.

Carbon Streaming expects halt in Rimba Raya issuance

Canadian company Carbon Streaming, the main seller of credits from the large Indonesian Rimba Raya REDD+ project, now expects a complete halt in offset issuances for the scheme until the government has finalised its new carbon market policy, according to news reports.

Ratings agency assigns views to two more hydro projects

A carbon credit ratings agency has awarded ratings to two more hydro projects, while a REDD forest protection project remained on firm’s “watch” list for a potential change.

AMERICAS

Dominion targets July 31 for end of RGGI compliance obligations

Utility Dominion Energy expects the Virginia government will leave RGGI by the end of July, though acknowledged in a filing on Friday that this date could change.

Court ruling to block Pennsylvania RGGI regulation should occur after Q2 auction

A decision on whether to block RGGI compliance obligations from taking effect on Pennsylvania’s power generators will occur after the cap-and-trade programme’s June auction, according to a Commonwealth Court order published Friday.

Quebec proposes throttling free allocation, adding consignment for cap-and-trade emitters

The Quebec environment ministry (MELCC) has proposed limiting the level of free allowances for industrial emitters in the province’s WCI cap-and-trade programme, while also including a consignment-based structure for companies that implement GHG-cutting projects.

EMEA

Euro Markets: EUAs rise in thin trade as market focuses on Parliament vote

EUA prices flirted with €90 on Monday as the market tested technical resistance ahead of Tuesday’s crunch European Parliament committee ballot that sees lawmakers vote on proposed amendments to the ETS reform bill and other Fit for 55 climate policy proposals.

UAE steps up methane capture efforts amid high gas prices

The UAE is to buy 500 gas decarbonisation devices over the next five years which will cut the equivalent of half a million tons of CO2 over the next decade, with the gas-rich Gulf nation aiming to make good on the multilateral pledge it signed up to at last year’s UN climate negotiations.

ASIA PACIFIC

China sees biggest drop in thermal power generation in 7 years as lockdowns sting

China last month saw its biggest plunge in thermal power generation – and likely in carbon emissions – since 2015, as Covid lockdowns hit demand while renewables recorded strong growth.

AVIATION/SHIPPING

Shipping carbon levy revenue must build hydrogen hub, finds report

Lobbying is mounting in shipping markets to dedicate revenues from a proposed global carbon levy into decarbonising the maritime sector.

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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

Setting an example – Egypt plans to issue a new NDC to the Paris Agreement within weeks, according to Foreign Minister Sameh Shoukry, as it prepares to take the lead on global climate negotiations as host of November’s COP27 UN climate negotiations, which has been tasked with receiving more ambitious NDCs. Shoukry spoke alongside the UK’s Alok Sharma, president of COP26, at the conclusion of two days of meetings among ministers from more than 40 countries, held to discuss progress towards meeting climate commitments. (Reuters)

The G Team – G7 foreign ministers have committed to supporting emerging and developing countries in their endeavour to transition towards climate neutrality through “new climate partnerships” by “matching high ambition with the necessary means to accelerate this transition”, said the final communique released after a meeting under the German G7 presidency. Areas for cooperation include financing, access to green technologies, technical assistance and exchange of experience based on just transition processes in the respective domestic markets. Following a separate meeting, the G7 agriculture ministers said the group would continue to work towards sustainable and resilient agriculture and food systems and strive to “show international leadership and ambition in finding pathways towards sustainable food systems, responding to the agricultural crisis caused by the war in Ukraine, and in investing responsibly in the future.” (Clean Energy Wire)

EMEA

Back in the black – In the fourth quarter of 2021, EU economy-wide GHG emissions totalled 1,041 Mt of CO2e, slightly above the pre-pandemic value for the fourth quarter of 2019, according to EU data as part of a quarterly update of estimates for GHG emissions by economic activity. EU economy-wide GHG emissions in Q4 2021 increased by 8% compared with the same quarter of 2020. This increase is largely due to the effect of the economic rebound after the sharp decrease of activity in 2020 due to the COVID-19 crisis. For comparison, the emissions for the same period in 2019 amounted to 1,005 MtCO2e.

Coal country – The conservative CDU have won the elections in Germany’s most populous – and coal dominant – state North Rhine-Westphalia by a wide margin, meaning incumbent state premier Hendrik Wuest will likely be able to lead the next government coalition in the country’s industrial heartland. While the centre-left SPD suffered its worst-ever result in the state, the Greens achieved their best result to date, leaving their top candidate Mona Neubaur set to become “kingmaker” in forming the next government coalition from the current previous CDU tie-up with the pro-business FDP. A survey by broadcaster ARD found that climate action had been the second most important topic for voters after rising prices, followed by energy supply security. (Clean Energy Wire)

Methane melodrama – EU efforts to tackle climate-warming methane emissions are being undermined by energy companies that say the measures are too expensive, according to climate non-profit groups. The bloc’s proposed rules to curtail leaks of one of the most powerful GHGs are under threat of being diluted in negotiations between member states, the Clean Air Task Force, the Environmental Defense Fund, and seven other non-governmental groups warned in a letter to French President Emmanuel Macron. France currently holds the EU’s rotating presidency. The concern is that energy companies see requirements for leak detection and repair as too difficult and costly to implement and should be primarily focused on older facilities. The NGOs also criticise member states for not yet addressing the methane emissions embedded within the EU’s imports during the negotiations. Under the Commission proposal, importers will have to provide information on how they measure and mitigate emissions. The bloc will review the import rules by 2025. (Bloomberg)

First the EU… – The UK plans to allow some natural gas projects to be labelled as sustainable in its green investment rulebook due to be published later this year. Gas is needed as a transition fuel to replace coal in power generation and Britain’s proposals are likely to be in line with EU measures put forward earlier this year, a source told Bloomberg. The UK plan is likely to draw the same criticism levelled against the EU’s programme, which green campaigners say undermines the push toward renewable energy. But Britain is increasingly focused on reviving domestic energy production since Russia’s war in Ukraine, and a green label for gas could potentially attract the private financing needed to help the overall transition to a low-carbon economy. Energy secretary Kwasi Kwarteng last week underlined the government’s intention to further develop North Sea oil and gas output to try to improve Britain’s energy security. Domestic production is more favourable because it has a lower carbon footprint than imported gas, the source said.

Jet zero snub – The UK government’s “jet zero” plan to eliminate carbon emissions from aviation relies on unproven or non-existent technology and sustainable fuel, the Guardian reports, and it is likely to result in ministers missing their legally binding emissions targets, according to a report by consultancy Element Energy commissioned by green group AEF. The study said that instead of focusing on such unreliable future developments, ministers should work to reduce the overall number of flights and halt airport expansion over the next few years. The report comes as five regional airports are in the process of seeking approval to expand. Separately, the UK government has revealed it expects the first-ever net zero transatlantic flight to take place as early as next year, with an aircraft to be powered solely by 100% sustainable aviation fuel, GreenAir reports.

ASIA PACIFIC

Sticking to it – The frequency of so-called ‘carbon neutral’ LNG trade announcements has come down significantly in recent months (see Carbon Pulse’s latest), but some market participants are sticking to it. Japanese oil and gas firm Inpex on Monday announced it had entered into an agreement with retailer Bushu Gas to sell it gas backed by carbon credits, following on from an announcement last week that it had made a similar agreement with Matsumoto Gas. There was no mention of volumes, though Inpex gets most of its offsets from the Rimba Raya REDD+ project in Indonesia.

H2 Origin – The Australian Clean Energy Regulator has kicked off the first phase of its test on hydrogen production emissions accounting methodologies. Nineteen companies have signed on to help test the scheme, which measures and displays key attributes of how and where a unit of hydrogen is produced, including its carbon intensity. The regulator said this will give hydrogen supply chains the information they need to make informed purchasing decisions. It noted that projects under the trial are or will soon be producing hydrogen for use as fuel in buses, industrial processes offshore, and to inject into gas pipelines for commercial and residential use. The regulator is working on the scheme alongside the government’s Department of Industry, Science, Energy and Resources, along with industry and key stakeholders, it said.

APPEA’s new CEO – The Australian Petroleum Production and Exploration Association (APPEA) has appointed former International Energy Agency CCUS Unit lead Samantha McCulloch as its new chief executive. The lobby group noted McCulloch has more than 20 years experience in energy policy and advocacy within government, the private sector, and industry associations in Australia and internationally. At the IEA, McCulloch wrote last year that the momentum for CCUS  development was encouraging, but acknowledged its deployment has largely been one of unmet expectations. However she said the investment environment for CCUS has improved, thanks to strengthening climate commitments by countries and companies across the globe. APPEA chair Ian Davies said the board was pleased to welcome McCulloch as APPEA CEO.

AMERICAS

Sun states – San Francisco-based REIT Digital Realty is contracting 158 MW of solar power in California and Georgia to reach its 100% renewable energy goal. Digital Realty’s biggest solar contract will support the development of a 130 MW facility in Kearn County, California and last 12 years. The site is being built by Terra-Gen as part of the Edwards Sanborn Solar Storage development, with an expected completion date of late-2022. Over in Georgia, the REIT’s Atlanta data centres will be powered by new solar projects expected for delivery in 2024. (Telecompaper)

AND FINALLY…

For the boyz and girlz The Gold Standard has partnered with Zeedz, an on-chain so-called Play-for-Purpose game in which players are meant to plant digital seeds – or zeedz – that will grow over time and that the players can check in with. The game is meant to create awareness of climate change, though it also creates its own emissions by issuing NFTs that players can buy. Emissions will be limited as the game is hosted on one of the low-carbon blockchains, but even so, Zeedz will set aside a share of every on-chain transaction associated with the game, and every month it will spend the set-aides buying carbon credits issued by the Gold Standard. Click here to read Carbon Pulse’s recent feature on the emergence of carbon credit NFTs.

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