CP Daily: Thursday May 19, 2022

Published 01:45 on May 20, 2022  /  Last updated at 01:45 on May 20, 2022  / Carbon Pulse /  Newsletters

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

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ANALYSIS: Renewables offset projects flock to GCC despite uncertain rewards

Around 220 renewable energy projects are queueing for registration with offset standard Global Carbon Council (GCC) despite uncertainty over market appetite for the units, should they be successful.


Common EUA auction volumes for 2022 slashed by 3% due to calculation error

This year’s carbon permit sale volumes on the EU’s Common Auction Platform are being slashed by almost 3%, exchange EEX announced late Thursday, in a surprise move resulting from an apparent calculation error.

Low-cost European airlines strengthen EUA hedging, forecast summer demand close to pre-pandemic levels

Low-cost European carriers announced in quarterly reports this week that they had furthered their hedging of carbon emission allowances (EUAs) for 2022 and 2023 over the past three months, and cautiously expected demand to rebound back towards 2019 levels from the summer onwards.

Euro Markets: EUAs recover to 2% loss after post-auction sell-off, remain weak on Commission’s ‘surprising proposal’

EUA prices fell hard on Thursday as a weak auction compounded wider bearish sentiment caused by EU proposals to raise billions of euros by selling allowances from the MSR, though prices recovered somewhat over the afternoon to notch a 2% day-on-day slump.

Key lawmakers seek to unlock EU Social Climate Fund in 2024-32, but post-2027 funding looks uncertain

Two European Parliament committees have backed plans to swiftly launch an EU-wide fund tasked with supporting poorer people cope with rising heating and road mobility costs during the clean transition, voting results showed this week.

UK govt claws back nearly 400k free carbon permits from emitters for 2021

The UK government has clawed back almost 400,000 carbon permits handed for free to emitters for 2021 after it was found that their output was lower than expected, imposing modest cuts for future years as a result.

Brussels unveils REPowerEU plans for a rapid shift from Russian fuels

(Updates Wednesday’s article with confirmation about heightened Innovation Fund disbursals)


Carbon project developers search for interim solution to CDM freeze

Developers with projects registered under the CDM are urging regulators to unfreeze post-2020 carbon credits to make them eligible for the voluntary and domestic carbon markets, aiming to keep revenues flowing ahead of the completion of a new carbon crediting mechanism under the Paris Agreement.

G7 can lead the way to reduce global heavy industry emissions, IEA says

G7 economies are well placed to be the first movers to reduce emissions from heavy industry, in turn setting out a path for the rest of the world to decarbonise the emissions-intensive sector, a report from the International Energy Agency (IEA) released on Thursday has said.


Carbon spot exchange CBL cancels late Thursday trades following investigation

Xpansiv market CBL cancelled executions made late Thursday after conducting an investigation regarding “potentially erroneous transactions.”

Blockchain and cryptocurrency company commits $100 million to carbon markets

A blockchain and cryptocurrency company has committed $100 million to carbon markets, targeting CO2 removal projects and building a portfolio of additional, long-term, nature and science-based carbon credit.

Investors paying lip-service to climate action, warns watchdog

The global investment community is often paying lip-service to pledges to invoke climate action change, according to a report published by a watchdog group on Thursday, finding that financiers often lack the “ambition, transparency and accountability” needed to engage with companies on their transition goals.


California carbon market reform bills proceed to first floor votes

A pair of California cap-and-trade reform bills received approval from two appropriations committees on Thursday, moving now to their first floor votes before a deadline next week.

NA Markets: CCA prices lift into May auction, RGGI holds amid heavy spread trading

California Carbon Allowance (CCA) prices rose to a one-month high this week as traders questioned why this would occur before the May 18 WCI auction, as RGGI Allowance (RGA) values lifted as entities rolled positions out on the curve.


Australian Market Roundup: Regulator issues 600K new ACCUs as Woodside gets nod for BHP merger

Australia’s Clean Energy Regulator has issued over 600,000 new Australian Carbon Credit Units (ACCUs), according to its latest update on Thursday, as Woodside got the nod from shareholders to become the nation’s largest oil and gas player through its merger with BHP’s petroleum business.

Australia’s Northern Territory EPA proposes new emissions guidelines, flags offset considerations

The Environmental Protection Authority (EPA) of Australia’s Northern Territory has released draft guidance that expects large, polluting projects to include more rigorous detail on how they will cut their emissions, including greenhouse gas data for scope 1, 2 and 3 emissions, as well as potential offset conditions.


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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



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


Berlin says yes – Germany has reacted largely positively to EU plans for ending dependence on Russian fossil fuel imports. Chancellor Olaf Scholz called the European Commission’s RePowerEU Plan an important initiative that could give fresh impetus to renewables expansion, energy efficiency, and industrial transformation. The German industry in general welcomed the Commission’s efforts to exit fossil fuels from Russia and cut red tape when it comes to infrastructure projects, such as renewables and hydrogen facilities. Politicians, industry, NGOs, and researchers have reacted largely positively to the RePowerEU Plan, which aims to end dependence on Russian fossil fuel imports. However, some think-tanks criticised the EU for putting too much emphasis on diversifying the current oil, gas, and coal supply routes instead of moving to renewables more forcefully. (Clean Energy Wire)

Winter is coming – EU negotiators on Thursday agreed on mandatory gas storage obligations for EU countries, aiming for the bloc’s storages to be at least 85% full by November 2022. The agreement, which aims for storage to be shared between EU countries in a spirit of solidarity, follows a winter of concern about low EU gas storage, high energy prices and disruptions in the supply of Russian gas. The regulation was tabled in March and fast-tracked through the normally lengthy legislative procedure by the European Parliament and the EU Council of Ministers. Having high levels of gas storage ahead of next winter is considered crucial in the event of a disruption of gas supplies coming from Russia. This could cause a price shock on European gas markets that would hurt European households and businesses. (EurActiv)


Cancellation Ontario – A new report from green group Environmental Defence alleges the Ontario provincial government cost taxpayers C$10.5 bln when Premier Doug Ford left WCI and cancelled renewable energy projects. Lost revenue to date from the linked cap-and-trade programme, which now only includes California and Quebec, amounts to C$7.2 bln and budget impacts from selling cap-and-trade hurt Ontarians to the tune of C$3 bln, the report says. Another C$300 mln was lost cancelling green energy contracts, fighting the federal carbon price in court, yet unpaid damages from the cap-and-trade revocation sought in a lawsuit from Koch Industries, and compensation paid out to carbon market participants. The Ontario provincial election is being held on June 2, where Doug Ford is still polling in majority government territory. (Read Carbon Pulse’s briefing on where the Ontario parties stand on carbon pricing ahead of the election) (National Observer)

Albertan Crossroads – Alberta Premier Jason Kenney resigned after winning a close vote on his leadership in a surprise move on Wednesday. While Kenney won 51.4% of the United Conservative Party’s membership vote, giving him the right to hold power, the premier decided instead to resign as leader of Canada’s biggest emitting province. Criticism from all sides of the political spectrum dogged Kenney’s leadership, and his party’s polling has plummeted below the opposition NDP since the conservatives won in 2019. The United Conservative Party of Alberta will now hold a leadership convention to decide who will lead the government into the next election. (CBC)

Hub hate – Meanwhile, industry leaders in Alberta have criticised the government’s rollout of a plan to capture CO2 underground as ineffective and lacking transparency, saying it has delayed billions of dollars of investment and increased costs. The Alberta government, which controls the underground space, has so far approved six proposals near Edmonton and is now reviewing bids for carbon capture and storage projects throughout the province. Some industry players say the provincial system is creating uncertainty since companies don’t know whether their project will be approved or when. And, if they have to use a hub operated by a different company, there aren’t any rules in place around costs or access. There are also concerns about a lack of transparency about why some projects are chosen and others are rejected. (CBC).

Funding air capture – The US Department of Energy (DOE) committed $3.5 bln towards construction of four direct air capture carbon removal plants, each removing 1 mln tonnes of CO2/y, in an announcement on Thursday. The department’s notice of intent outlines plans to create four regional hubs across the US as part of achieving President Joe Biden administration’s net zero emissions targets by 2050. (CNN)

Nodal news – Virginia-based bourse Nodal Exchange on Wednesday posted a new daily volume record and established a record level of open interest (OI) for environmental markets with 10,000 lots traded, while open interest topped 200,000 lots across listed contracts in carbon, renewable energy certificates (RECs), and renewable fuel credits. The daily volume record included 6,650 lots of carbon futures – split between 5,000 RGGI contracts and 1,650 CCA contracts – and 3,350 lots of REC futures traded. Open interest in North American carbon markets on Nodal hit 23,448 lots combined yesterday, up 279% from 6,189 lots a year earlier.


Land of oz – Inpex, Japan’s top oil and gas producer, wants to grow in Australia through expansion of its LNG output as well as hydrogen and nature-based carbon offset projects, Reuters reports. Inpex’s $40 bln Ichthys LNG project, and stakes in other gas projects, last year contributed more than 70% of the company’s global revenue and now the company has set up a “new energy” business in Australia to look at other opportunities. While exploring for gas, the company is also working on plans to reduce emissions from its own operations using CCS at a proposed $1 bln hub in the depleted Bayu-Undan reservoir in the Timor Sea, and in its own project in waters off Darwin. Down the track, when there is demand for hydrogen, the company would look to produce hydrogen from methane, capturing the carbon dioxide released using CCS.

Fire sale – Korean utility KEPCO said it will sell all overseas coal-fired power plants, including one in the Philippines, as part of its efforts to improve its financial status over record quarterly losses, Korea Times reports. Last week, the state-run electricity monopoly reported a record-high operating loss of 7.78 trillion won ($6.14 bln) in the first quarter of this year due to high global energy costs and a freeze in electricity rates. Holding an emergency meeting with its affiliates, KEPCO vowed to “seek all possible options” to make up for more than 6 trillion won, including the restructuring of overseas businesses, property sales, and other cost-cutting measures.


More lawsuits – A German NGO specialising in environmental litigation has launched legal action against Nivea maker Beiersdorf, oil majors BP, Shell, TotalEnergies, and other companies for allegedly “misleading” consumers regarding their climate neutral products. The companies’ claims constitute “fake climate protection” that conceal continued emissions and use incomprehensible compensation mechanisms, Environmental Action Germany (DUH) said. “The advertising promise of climate neutrality is often consumer deception,” said the NGO’s managing director, Juergen Resch. He added that emission compensation payments resembled a “sale of indulgences” to greenwash entire companies or their products but without real climate effect. “We will not put up with this insanity any longer and file lawsuits against violations, if necessary,” Resch said. His NGO also asked German drugstore chains dm and Rossmann, aviation company Green Airlines, and sustainable products start-up The Mother Nature to refrain from making certain advertising claims and said it will make the fight against misleading “climate neutral” claims a new focus of its market monitoring activities. (Clean Energy Wire)


Lucy, football, May edition – US Energy Secretary Jennifer Granholm said Wednesday she was “pretty bullish” on a $325 bln clean energy tax credit package that is the heart of Congressional Democrats’ reconciliation push. The comments came amid other signs of life on Capitol Hill for a potential deal on climate and energy. Senate Energy and Natural Resources Chair Joe Manchin, who killed the $1.7 trillion climate and social spending package last year, met with Senate Majority Leader Chuck Schumer yesterday. “I’m meeting with everybody,” Manchin told reporters last night. (E&E News)

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