CP Daily: Tuesday May 31, 2022

Published 01:17 on June 1, 2022  /  Last updated at 01:17 on June 1, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

PREVIEW: Q2 RGGI auction to flirt with new record settlement, though CCR release uncertain

Traders believe the June RGGI auction will likely set a new record high settlement by clearing near current secondary market pricing levels, though they are less certain as to whether these bids will trigger additional permit volume from the Cost Containment Reserve (CCR).

EMEA

EU leaders task ministers to quickly sign-off on RePowerEU plans

EU leaders on Tuesday tasked their ministers to rapidly agree a position on the bloc’s RePowerEU proposals, ending a two-day summit resolved to forging a more united energy policy.

Euro Markets: EUA prices stabilise despite MSR sale opposition as markets wind down ahead of holidays

EUA prices were little changed on Tuesday as activity wound down ahead of public holidays and a pause in the daily auction programme, while traders eyed proceedings at an EU leaders’ meeting where some member states voiced objections to a plan to sell MSR-held units.

ASIA PACIFIC

China’s finance ministry to brush up low-carbon toolkit, fuelling carbon tax speculation

China’s finance ministry will develop a toolkit to facilitate the country’s path towards carbon neutrality, sparking fresh speculation that a carbon tax might be on the steps.

Big-emitting Chinese province rolls out offset plans

One of China’s richest provinces has released a draft plan to launch a nature-based carbon offset programme, though uncertainty around the national government’s approach to corresponding adjustments means the resulting credits might be restricted to domestic consumption.

Analysts see ACCU price doubling by 2030, but stable in the near term

The Australian Carbon Credit Unit (ACCU) spot price is likely to double over the next eight years to A$70 ($50), but remain below A$40 for the time being, analysts said Tuesday.

Australia Market Roundup: Bowen takes climate and energy minister post, AgriProve registers more projects

Labor MP Chris Bowen has been appointed Australia’s new climate change and energy minister, while AgriProve has yet again dominated the latest round of project registrations by the Clean Energy Regulator.

VOLUNTARY

Green groups launch interactive tool to score carbon credit quality

Environmental groups launched a free online tool on Tuesday that they say will help voluntary buyers assess the quality of carbon credits, with initial testing showing that getting a high score for quality across all categories is unlikely.

American Carbon Registry follows Verra in carbon credit tokenisation ban

American Carbon Registry (ACR) has banned the tokenisation of its carbon offset credits unless it has given explicit authorisation, the registry announced Tuesday in the wake of Verra’s decision last week to stop the practice of tokenising its retired credits.

German HVAC firm teams up with insurance giant on Latam forest carbon project

A German HVAC machinery manufacturer has teamed up with an insurance giant to invest in an afforestation project in Latin America to help neutralise the former’s carbon emissions.

Brazil bike offset scheme gets lowest grade in ratings firm’s latest awards

A Brazilian offset project promoting cycle use was awarded the lowest-possible score by a carbon credit ratings agency on Tuesday, with four other activities assigned with new or reaffirmed grades.

INTERNATIONAL

Global asset managers up alignment with net zero goals to $16 trillion

The number of global asset managers that have now set climate targets has reached over 80, with nearly 40% of their assets aligned with a net zero emissions by 2050 goal, an update from the Net Zero Asset Managers Initiative (NZAM) reported on Tuesday.

AMERICAS

Canadian investment manager teams up with ESG investor to partially offset portfolio emissions

Four global diversified funds from a Canadian wealth manager will see their partial portfolio emissions offset by the purchase and retirement of carbon credits from a voluntary emissions reduction (VER) investor, the companies announced Tuesday.

PetroChina hires new US-based head of environmental products trading

The international arm of Chinese oil and gas giant PetroChina has named a new head of trading for environmental products in the Americas.

WE’RE HIRING!

Greater China Environmental Markets Correspondent, Carbon Pulse – Greater China

Carbon Pulse is seeking a Greater China Environmental Markets Correspondent.

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CONFERENCES

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

Climeworks’ DAC Summit – June 30 in Zurich/online: Carbon removal and Direct Air Capture technologies have been experiencing a watershed moment in recent months.   Scientists have deemed them indispensable in the latest IPCC report, governments have stepped up their funding and policy efforts, and investors have committed large amounts to scale up. Where does the industry stand today, and what are its recent most promising developments? What are the requirements and immediate next steps for scaling up at the required speed? And when the industry works together, what could the future look like? The Summit provides a unique opportunity to get answers to these questions from DAC insiders and experts. Register here

Argus Carbon Markets and Regulation Conference – June 30-July 1 in Lisbon, Portugal: The event will deliver critical updates on regulation, the future of the EU ETS, and key developments in the voluntary carbon markets space, amongst other topics that will be tailored for the European and global audience. Featuring panel discussions, fireside chats, presentations, and collaborative problem-solving sessions. Participates will gain knowledge and insight from expert opinions and take advantage of the opportunity to network and discuss with their industry peers in-person for the first time in two years. CP Daily subscribers can get a 15% discount by registering with the code CARBONPULSE15: https://bit.ly/3t4CmH6

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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

Brit-Saffa pilot – The UK is considering guaranteeing at least $1 bln of South African debt as part of a deal designed to cut the nation’s reliance on coal and drive a shift to green energy. Further negotiations are taking place over how the guarantee will work, with some of it to apply to debt provided by the African Development Bank, sources told Bloomberg. The guarantee is part of a larger $8.5 bln funding package proposed by the UK, US, Germany, France, and the EU. That deal, which those countries have previously said would consist of concessional loans and grants, is seen as a prototype for other coal-dependent nations such as Indonesia to cut their GHG emissions. South Africa, which depends on coal for more than 80% of its power generation, is the world’s 13th-biggest producer of the climate-warming gases.

Kiwi-Yank collaboration – The US and New Zealand have committed to the environmental integrity of carbon markets, and to ensure the mutual supportiveness of trade and climate policy, according to a joint statement published Tuesday by the two countries’ leaders. The statement also outlined in broad strokes a number of climate policy initiatives the two countries can work on together, including the Global Methane Pledge and better ocean governance.

EMEA

Finland out front – Finland has passed arguably the world’s most ambitious climate target into law. It aims to be the first developed country to reach net zero, in 2035, and net negative – absorbing more CO2 than it emits – by 2040. According to Net Zero Tracker, only South Sudan has a more ambitious net zero date than 2035 and, as a developing country, its 2030 target is highly dependent on international finance. The target was set based on analysis by a group of independent economists from the Finnish climate change panel. They worked out what Finland’s fair share was of the 420 billion tonnes of CO2 that the world can emit and still have a two-thirds chance of limiting global warming to 1.5C. The panel based this fair share on Finland’s share of the global population, its ability to pay to reduce emissions and its historic responsibility for causing climate change. It is believed to be the first target to have been set in this way. (Cliamte Home)

Autobahn slipway – Germany and other EU nations should consider the introduction of a speed limit on motorways and a runtime extension for its remaining nuclear power plants among “extraordinary measures” to reduce their fossil energy demand in response to the supply crisis exacerbated by Russia’s invasion of Ukraine, according to IEA chief Fatih Birol. He said longer runtimes for Germany’s three remaining nuclear plants would be “technically feasible”. He called on Germany’s government to find “structural answers” to the crisis for reducing the reliance on fossil alternatives like coal power and to not lock in fossil power investments. (Frankfurter Allgemeine Zeitung, Clean Energy Wire)

Leaking imports – Algeria’s massive Hassi R’Mel gas field operated by Sonatrach leaked an estimated 939,000 tonnes of methane last year, up 67% from the previous year, according to estimates from geoanalytics company Kayrros SAS funded by Greenpeace, Bloomberg reports. The findings highlight the global warming impact of a country that provides about 8% of Europe’s gas imports and is the continent’s biggest supplier after Russia and Norway. The analysis adds to pressure on EU lawmakers who have been looking to tighten controls of leaks from within the bloc and from key sources outside the continent. Read Carbon Pulse’s report on how the EU’s dash for non-Russian gas could boost methane controls elsewhere.

Point of no return – Energy group EDF has told staff that it would not delay the shutdown of its Hinkley Point B UK plant beyond its scheduled closure date of the end of July. Business secretary Kwasi Kwarteng wrote to National Grid last week urging the company to “significantly” increase the amount of electricity-generating capacity available over the winter, with a particular focus on non-gas fired stations. But, according to a memo seen by the FT, the request “had come too late”.

Dodoma doozy – Tanzania’s vice president’s office is formulating national regulations for carbon trade to be observed by foreign investors, public institutions, and the local private sector seeking to invest in the country, IPP Media reports, noting that officials believe the rules are needed due to rising investor interest in the sector.

ASIA PACIFIC

War on coal – India plans to reduce power generation from least 81 coal-fired utilities over the next four years, the federal power ministry said in a letter, in an effort to replace expensive thermal generation with cheaper green energy sources. The plan aims to maximize green energy potential and save costs, the letter sent to top energy department officials of state and federal government said, but will not involve shutting down old and expensive power plants. India has 173 coal-fired plants. “The thermal power plants in future shall operate up to the technical minimum to accommodate cheaper renewable energy when it is available,” the ministry said in the letter dated May 26. India faced a crippling power crisis in April, when a rapid surge in power demand lead to a scramble for coal, forcing the country to roll back plans to cut thermal coal imports to zero. (Reuters)

Spending on lending The Asian Development Bank (ADB) has approved a $250-mln policy-based loan to help the Philippines scale up its climate action, with the French Development Agency adding a further $172 mln. With the funds, the Southeast Asian nation will carry out policy reforms and build planning, financing, and institutional systems related to mitigation and adaptation in line with its NDC. The loan is ADB’s first climate-centred policy-based loan, the bank said.

Signed up – Japan’s Mitsui OSK Lines announced that it participated in the First Movers Coalition (FMC), which was established to boost demand for decarbonisation technology at the World Economic Forum Davos Agenda, Hellenic Shipping News reports. MOL is the first Japanese company to take part in the FMC, a platform aimed at helping governments and major global companies cooperate to launch technologies needed to achieve “net zero emissions by 2050” and enhance cost competitiveness. Through the NextGen CDR Facility, which was announced prior to its participation in FMC, MOL is committed to purchasing at least 50,000 tonnes of verified carbon dioxide removals (CDR) by the end of 2030.

Any ideas? – The South Australian (SA) state Labor government, newly-elected in March, has called for designs and delivery concepts for a A$592-mln hydrogen hub, but is staying vague on what colour of the fuel it prefers, Renew Economy reports. At the Australian Hydrogen Conference in Adelaide, SA Premier Peter Malinauskas launched a six-week market sounding process for the planned Whyalla facility. Details are sketchy, however, about the colour of the hydrogen that would be produced and used, and newly revealed plans for specialised hydrogen legislation for the state do not make things any clearer, Renew Economy commented. Malinauskas said the legislation to license and regulate the production of hydrogen in SA would cover manufacturing of “all forms” of hydrogen, including green from renewables, and “blue” from gas in conjunction with carbon capture and storage. The premier also said the new hydrogen act would be similar to what has been afforded to the oil, gas, and geothermal industries in South Australia in a separate law passed in 2000.

VOLUNTARY

Net zero carbon shines Mayfair Gold on Tuesday announced Canada’s first carbon neutral gold project that has offset 738 tonnes of CO2e Scope 1-3 emissions for 2021, generated primarily from its Fenn-Gib gold exploration project in Timmins, Ontario. To compensate for these emissions, Mayfair has purchased carbon offsets from the Canada-wide Thermal Residential Heating Aggregation Project, with the offsets being retired on the Canadian Standards Association’s (CSA) GHG CleanProjects Registry. The residential heating project replaces conventional residential fossil fuel heating with solar heating systems at private residences and commercial swimming pools across Canada.

SCIENCE & TECH

Another green brick in the wall – Building materials manufacturer Michelmersh has announced its successful bid to the UK’s Department for Business, Energy & Industrial Strategy (BEIS) Industrial Fuel Switching competition to conduct a feasibility study to replace natural gas with hydrogen in the brick making process. The programme is part of the £1 bln Net Zero Innovation Portfolio (NZIP), which aims to provide funding for low-carbon technologies to decreasing the costs of decarbonisation. Phase 1 of the project will demonstrate the viability of fuel-switching and will see hydrogen used in the clay brick production process at one of Michelmersh’s sites. Green electrolytic hydrogen will be used for this innovative study, helping to demonstrate how this technology can transform the brick manufacturing industry. On Tuesday, the UK government announced more than £31 mln in government funding for this and related programmes, including £6.6 mln to help industry move away from red diesel, also known as gas oil. (Showhouse)

Dirty potential – India’s forests and soil can potentially store an additional 7 billion tonnes of carbon, a new study has estimated. This puts India among the top 10 countries with additional carbon storage capacity, the analysis published in the Proceedings of the National Academy of Sciences revealed. The researchers created a global map using methods described by other scientists and based on data from the field, a remote sensing technique, and a NASA satellite. A machine-learning algorithm analysed the combined data to model and map current and potential additional carbon storage. The team also analysed additional land carbon storage through reforestation, improving natural forest stewardship and storage benefit through conserving forests. The world can potentially store 287 billion tonnes of additional CO2, with 78% of that in forests and 22% in soil, the analysis found. The study said tropics show the most promise, holding 68% of the additional carbon-storing potential, with India potentially gaining the most of any region by improving the management of its existing and likely degraded forests. The researchers also examined how climate change is likely to impact the storage capacity of forests. Under a high emissions scenario, they predicted an average increase of 17% in additional potential for land carbon storage globally, but a decrease of roughly 12% in the tropics. (Down to Earth)

AND FINALLY…

Dirty greenwashers – German prosecutors raided asset manager DWS and the headquarters of its majority owner Deutsche Bank on Tuesday over allegations of misleading investors about “green” investments, the prosecutors said. DWS and Deutsche Bank said the asset manager had cooperated with regulators and authorities in the past and would continue to do so. The German prosecutors said “sufficient factual evidence has emerged” that ESG factors were taken into account in a minority of investments “but were not taken into account at all in a large number of investments”, contrary to statements in DWS fund sales prospectuses. The US Securities and Exchange Commission and German financial watchdog BaFin last year launched separate investigations into allegations made by DWS’ former head of sustainability that the company was overstating how it used sustainable investing criteria to manage investments. Deutsche Bank’s Frankfurt offices are regularly the target of police raids, with a German court in 2016 convicting a handful of bankers there of fraud linked to the EU carbon market. (Reuters)

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