CP Daily: Wednesday June 8, 2022

Published 02:39 on June 9, 2022  /  Last updated at 02:39 on June 9, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Accusations, chaos as EU Parliament fails to adopt position on ETS reforms amid progressives protest

The European Parliament voted to reject a proposal on EU ETS reforms on Wednesday, amid chaotic scenes and flying accusations in the legislature after a line-by-line ballot weakened many amendments to a level that was unacceptable to progressive members.

EMEA

Euro Markets: EUAs hit two-week low, shrug off wild swings amid chaotic Parliament reform vote

European carbon extended losses for a fourth day despite a brief spike in response to a chaotic Parliamentary vote on the ETS reforms, as prices rose and dropped as much as 2.7% after the assembly voted to refer the bill back to committee, before ending lower on the busiest day in nearly three weeks.

EU’s ETS-derived Modernisation Fund invests €2.4 billion in seven nations

The EU’s Modernisation Fund made available €2.4 billion to seven central and eastern member states on Wednesday, with the vehicle’s third disbursal being put towards 45 projects for renewables and energy efficiency but including some gas-fired activities.

North Sea emitters to shell out record £600 mln for UK carbon allowances this year -analysts

Emitters in the North Sea will shell out a record £600 million for carbon allowances this year, analysts have predicted, as the emissions intensity of the UK’s oil and gas sector worsens amid rising UKA prices.

Experts publish roadmap for scaling UK nature-based environmental markets

More than 300 UK experts have outlined a roadmap this week to scale environmental markets and establish nature-based accreditation mechanisms in the country to help fill an annual £5.6 billion financing gap for nature recovery.

A combined UK carbon and health tax on food could save 40 Mt CO2 per year -report

Combined carbon and health taxes on food products could significantly contribute to the UK’s 2050 net zero emissions target by cutting nearly 40 Mt of CO2e per year mainly via their influence on consumer choices, according to a study published this week.

AMERICAS

Canada adds DAC protocol, tonne-year accounting to launch of federal offset system

Canada’s environment ministry on Wednesday finalised regulations for the national carbon offset system, simultaneously announcing plans to initiate development of a direct air capture (DAC) protocol and provide a ‘tonne-year’ accounting option for sequestration-based projects.

New US CBAM bill could attract Manchin support, though time running out

Legislation to implement a US carbon border adjustment mechanism (CBAM) and help the American manufactured metals industry may win support from conservative Democratic Senator Joe Manchin (D), though only several months remain for the bill to pass, a webinar heard Wednesday.

Quebec compliance offset issuance exceeds California during bumper period

Quebec’s environment ministry dished out more offsets this week than its WCI partner California in a rare feat, according to government data published Wednesday, as California Carbon Offset (CCO) prices continued to rise.

US agriculture carbon firm doles out $9 mln to participants in first year

A major US-based agricultural carbon offset firm has distributed $9 mln to US farmers and ranchers in its first year, it announced Wednesday.

Former US carbon market analyst returns after 4-year hiatus

A well-known US carbon market analyst is returning to the sector following a four-year hiatus, Carbon Pulse has learned.

ASIA PACIFIC

SK Market: South Korea sees less than 40% uptake in 2021 compliance year’s last KAU auction

South Korea on Wednesday sold fewer than 40% of the 2.5 million KAUs on offer in the last auction before the 2021 compliance deadline, with permits clearing at their lowest level during the annual cycle.

Australian offset watchdog rejects claims of lacking integrity

The committee overseeing the quality of Australian offset projects on Wednesday released two reports refuting claims that human-induced regeneration (HIR) and landfill gas projects are fraudulent.

Australia Market Roundup: Regulator mints half a million ACCUs, as energy ministers eye net zero vision

Australia’s Clean Energy Regulator has issued over half a million new carbon credits, as federal and state energy ministers met for the first time since the change of government, agreeing to set out a net zero vision for the nation’s energy sector.

VOLUNTARY

ANALYSIS: Buyer guidelines seen triggering demand blip as VCM pivots

Guidelines to raise integrity in the use of carbon credits may cause a short-term dip in demand as buyers of lower quality units adjust their strategy or withdraw entirely, but many stakeholders believe that this will benefit the voluntary carbon market in the long run.

Nordic initiative goes further than VCMI in draft for voluntary compensation

A Nordic nation-funded initiative set out draft guidelines for ensuring high-integrity voluntary compensation of GHGs on Wednesday, going further in some aspects than a similar draft for carbon credit buyers published earlier in the week.

Global pharma giant pursues soil sequestration innovation with new firm

A major global pharmaceutical and life sciences company has helped establish a innovative new company to advance carbon sequestration in agricultural soil.

INTERNATIONAL

‘Dash for gas’ dominates response to Russia’s Ukraine invasion -report

Government responses to Russia’s invasion of Ukraine and the related energy crisis feature more examples of support for oil and gas expansion and fewer of clean and efficient energy transition policies, according to a report released by climate researchers on Wednesday.

Cement industry to rely heavily on CCS to reach its 2050 net zero ambition -report

Efforts to decarbonise cement by 2050 will rely heavily on deployment of carbon capture technologies, but it will only be until after 2030 that these will become commercially viable for an industry grappling for solutions to meet its net zero emissions goal, according to a report released Wednesday.

SHIPPING/AVIATION

Shipping’s net zero ambition in the doldrums at the IMO

On World Oceans Day, international shipping looks set to run aground of progress to phase out emissions, with governments clashing at the UN’s International Maritime Organisation (IMO) negotiations over a potential global 2050 net zero emissions goal.

Singapore players to launch sale for sustainable aviation fuel credits

Singapore Airlines (SIA) has teamed up with government investment company Temasek and the Civil Aviation Authority (CAA) to launch a sale of Sustainable Aviation Fuel (SAF) credits in July, they announced Wednesday.

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Greater China Environmental Markets Correspondent, Carbon Pulse – Greater China

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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

Say goodbye – The head of the International Energy Agency (IEA), Fatih Birol, has criticised the “inexplicable” failure of governments and businesses to accelerate energy efficiency efforts, the Guardian reports. New analysis by the IEA showed that doubling the rate of energy efficiency improvements seen in the last decade would, by 2030, slash global energy use by the same amount used in China every year, savings households $650 bln. It would also cut oil and gas use by far more than Russia exports to the EU.  Europe is at risk of energy rationing this winter, particularly if cold weather coincides with resurgent economic demand in China, Birol added. He argued that energy security should be achieved through increased efficiency, more use of renewable energy, and making the most of existing oil and gas fields – rather than large new fossil fuel projects that could last into the 2040s and 2050s and could mean “saying goodbye to our international climate policy”. (Carbon Brief)

EMEA

Gonna need a bigger reserve – To counteract future gas supply shortages, the German cabinet has decided on new regulations for the provision of backup power stations and to minimise the use of natural gas in power generation, Reuters reports. In case of an emergency, additional back-up plants can be brought into operation at short notice. For this purpose, already mothballed coal plants will be upgraded; some 2.6 GW of coal capacity that is scheduled to be shut down will be transferred into the reserve, which will amount to 9 GW in total. The government also aims to minimise gas use for electricity production to ensure that it is only used in industry and for heating in times of shortages. The regulation will apply until the end of March 2024, by which time the government estimates to be almost fully independent of Russian gas imports. Germany has reduced its dependency on Russian gas from around 55% to around 35% between February and April 2022. (Clean Energy Wire)

Super subsidies – Polish households will receive subsidies to weather the impact of coal shortages and high prices, according to one of the several support measures announced by climate and environment minister Anna Moskwa. The embargo on Russian coal imports that has been in place since April has contributed to a severe coal deficit in Poland, leading to high prices. Fearing more coal shortages in winter, many purchased more coal than usual, resulting in permanent shortages for the country’s main coal distributor. To solve the issue, Moskwa announced that the government would increase yields and redirect coal stream to stocks so that more coal goes to households. While admitting that a climate minister dealing with fossil fuels may sound strange, Moskwa said that this is a matter of energy security for many households. Separately, Austria’s government will cover new costs arising from diversifying gas suppliers and infrastructure revamps by disbursing €100 mln to companies per year from 2022-25 after the ruling coalition of OVP and the Greens rushed the law through Tuesday. Opposition parties complained that the move was a last-minute surprise addition to the agenda. And looking southward, the European Commission has approved, under EU State aid rules, an €8.4 bln Spanish and Portuguese package aimed at reducing the wholesale electricity prices in the Iberian market by lowering the input costs of fossil fuel-fired power stations. The measure is in line with the Commission’s Communication on security of supply and affordable energy prices and the European Council conclusions, both from March 2022, referring to emergency temporary measures reducing spot electricity market prices for companies and consumers that do not affect trading conditions to an extent contrary to the common interest. (EurActiv)

‘Greatest vulnerability in Europe’ – The energy sector is “the greatest vulnerability that Europe has” at the moment, Portuguese Prime Minister Antonio Costa said in Paris on Tuesday. After a meeting with French President Emmanuel Macron, Costa said he had discussed peace, food security, the energy transition, and defence, EurActiv reports. “It is an opportunity for us to discuss the issues on Europe’s agenda, the issues that have to do with rebuilding peace, the need to respond to food security crises, and strengthen our defence capabilities. But also to respond to what this crisis has demonstrated, which is that Europe’s greatest vulnerability is in the energy sector,” he stressed. Costa defended the need to accelerate the energy transition to recover European independence.

‘Czech Presidency of EU Council’ – The upcoming six-month Czech Republic presidency of the EU Council, starting on July 1, will put five subjects at the top of the political agenda – Ukraine, energy security, defence and cybersecurity, economic and democratic resilience – according to a draft of an internal document seen by EurActiv. The draft report states that the “Czech Presidency will work in favour of reaching a consensus on the granting of candidate status to Ukraine,” as well as working with the European Commission to reallocate EU funding in favour of the member states that have opened the doors to refugees. The Czech Republic originally signed up to a trio presidency programme with current French presidency and the previous Swedish presidency, but Russia’s war in Ukraine has caused Prague to adopt its own political priorities.

ASIA PACIFIC

Setting up shop – The Glasgow Financial Alliance for Net Zero (GFANZ) has formed an Asia-Pacific network with the opening of its first Asia-Pacific office and the creation of a regional advisory board to accelerate net zero action across Asia, the group announced in a press release. The new regional network, with a central office in Singapore, will support expansion of net zero finance in Asia-Pacific and help accelerate the region’s transition to a net zero economy, GFANZ stated (GFANZ).

More hydrogen – Renewable energy firm ACME Group will invest $6.7 bln in India’s Karnataka over five years to set up a green hydrogen and ammonia plant, Livemint reports. The investment comes as India aims to manufacture 5 mln tonnes of green hydrogen annually by 2030 to meet its climate targets and become a production and export centre for the fuel. The green hydrogen and ammonia plant, which will create about 2,000 jobs, will have the capacity to produce 1.2 mln tonnes per annum. It will also have a solar power unit attached.

Methane mayhem – Australia’s coal mines have a methane problem, according to a new report from Ember, a climate think tank, in a summary published in RenewEconomy. In 2019, they released 68% of Australia’s methane emissions from the energy industry overall, making coal mines a larger contributor than both oil and gas. What’s more, new evidence suggests emissions are underreported and are actually significantly higher. Methane leaking from coal mines has been ignored for many years, but tackling it is the ‘low hanging fruit’ in Australia’s effort to combat climate change, Ember says.

Capture this – Japan’s Marubeni and J-POWER will fund A$20 mln ($14.44 mln) in a carbon capture and storage project owned by mining giant Glencore in Australia, ChannelNewsAsia reports. Glencore’s CTSCo carbon capture and storage project in Queensland, Australia will capture carbon dioxide from the Millmerran coal power plant and store it underground.

Carbon partnership – Chevron and Kazakhstan’s KazMunayGas have announced a memorandum of understanding to explore potential lower carbon business opportunities in the Central Asian state, Chevron stated in a press release. The two oil companies plan to evaluate the potential for lower carbon projects in areas such as CCUS, hydrogen, energy efficiency, methane management, and carbon financial disclosure methodology (Chevron).

AMERICAS

Eighteen and up – Poet, the world’s largest ethanol producer, has signed a letter of intent to capture, ship, and store carbon for at least 18 of the company’s ethanol plants using the Navigator CO2 Ventures pipeline that would store the carbon in Illinois. Under the letter of intent, Navigator will ship and store approximately 5 MtCO2 annually from Poet ethanol plants in Iowa, Nebraska, and South Dakota as part of Navigator’s proposed pipeline called the Heartland Greenway system. In a news release, Navigator stated the collaboration between the two companies also would work on the development of a “central carbon offset marketplace and carbon use logistics platform.” Navigator projects its pipeline system will be operational by 2025. (DTN/Progressive Farmer)

The roaring 20% – A recent study of Alaska’s Tongass National Forest, the largest in the US, found that it contains 20% of the carbon held in the entire national forest system, and keeps the equivalent of about a year and half of the country’s GHG emissions out of the atmosphere. Scientists and conservationists argue that the forest’s old-growth trees that are hundreds of years old should be protected from logging, and are also hoping that efforts by the administration of President Joe Biden are successful in banning the construction of new roads in the Tongass. (Mongabay)

Walmart parking lot – Some of Walmart’s heavy-duty trucks will operate on biofuel supplied by Chevron using a 15-litre natural gas engine made by Cummins, according to a press release. The trucks will be tested at Walmart’s distribution centre in Fontana, California once Cummins installs the engines. The renewable natural gas will be sourced from dairy farms’ manure and could count as carbon negative under California’s Low Carbon Fuel Standard. Walmart says it hopes its fleet becomes carbon neutral by 2040.

VOLUNTARY

Fashion makes the fund Lululemon Athletica and H&M Group are among backers of a $250 mln fund aiming to speed up efforts to cut carbon emissions in the fashion industry’s supply chain, non-profit group Apparel Impact Institute said Wednesday. Bringing together clothing brands, philanthropic donors, and other industry stakeholders, the institute’s Fashion Climate Fund also hopes to unlock a further $2 bln in funding once effective solutions have been found and scaled up. Other early backers include the H&M Foundation and the Schmidt Family Foundation. More are expected to be announced in the coming months, with the fund hoping to raise $10 mln from each. The fund will help finance a range of initiatives including expanding the use of renewable energy, developing next-generation materials, ditching the use of coal in manufacturing and improving energy efficiency. It hopes that the use of philanthropic capital to help fund early stage projects and the forging of partnerships with retailers to scale up successful initiatives will encourage other industry participants to help meet future funding needs. (Reuters)

SCIENCE & TECH

Wind power at work – A new study published in Energy Policy finds that installing wind power in a community leads “to economically meaningful increases in county GDP per-capita, income per-capita, median household income, and median home values.” Debunking a longstanding opposition talking point warning homeowners that wind farms depress value, the study analysed nearly 3,000 counties and their experiences installing 465 wind turbines between 1995 and 2018. They found that in the counties with wind energy the average per-capita income increase was 5%, home values were boosted 2.6%, and the per-capita GDP increase was 6.5% greater than the growth in counties that didn’t install new turbines. Rural areas fared particularly well, getting three times the GDP boost that urban areas did for adding wind power. The study used multiple techniques to show a causal relationship, ruling out the possibility that the economic growth is unrelated. (Climate Nexus)

AND FINALLY…

Salt-free ocean water, at latte prices Researchers from the US and China have developed a solar desalination device that could provide a family of four with all the drinking water it needs – and it can be made from just $4 worth of materials. Engineers have created countless solar desalination devices, but for the devices to make a difference in the places that need them the most, they need to be not only cheap and efficient, but also durable and long-lasting. The problem is that salt tends to build up in these devices, particularly on the wick used to pull water through the device. Those wicks are difficult to clean, and over time, the salt accumulation means they have to be replaced. Researchers from MIT and China’s Shanghai Jiao Tong University have now created a wick-free solar desalination device that uses gravity-driven convection to move the water. Natural convection is a type of movement that occurs when a liquid isn’t one uniform density. In that situation, the less dense liquid will rise, while the denser liquid falls. The new solar desalination device consists of several layers: salt water is added to the top layer, and black paint draws the sun’s heat to that layer, causing the desired creation of water vapour for collection. Any water left behind in that layer is then extra salty and, therefore, extra dense. The very bottom layer of the device contains more saltwater. The layers between it and the top are designed to keep heat in the top layer, while allowing the super-dense saltwater to move downward to mix with the normal density saltwater under the power of natural convection. The device worked for a week straight with no signs of salt accumulation, but the researchers still don’t know exactly how long it could operate. (Big Think)

AF BONUS ROUND

Decisions, decisionsA recent survey found that the soaring prices could influence the choice of Florida residents to evacuate or stay ahead of an approaching tropical weather threat. As of June 7, the average gas price across Florida was about $4.77 – roughly 15 cents higher than Texas, which is the Gulf State with the second-highest average gas price, according to the American Automobile Association (AAA). The national average for a gallon of gasoline was about $4.92 on Tuesday, and AAA predicts gas in Florida could even surpass $5. In the AAA survey, about 42% of respondents said that high prices and the availability of gas would make them less willing to evacuate their homes if recommended to do so this hurricane season, which AccuWeather forecasters are expecting to be active again. One in four of the Florida residents involved in the survey said they would ignore hurricane evacuation warnings altogether. Major hurricanes seemed to be one threat that would convince people to evacuate, with 60% saying they would leave only if they were in the path of a Category 3 or stronger hurricane.

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