Newsletters > CP Daily: Thursday June 9, 2022

CP Daily: Thursday June 9, 2022

Published 03:32 on June 10, 2022  /  Last updated at 03:50 on June 10, 2022  / Carbon Pulse /  Newsletters

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

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TOP STORY

Gold Standard softens stance on adjusted credits in new claims guidelines

Carbon credit certifier Gold Standard issued new guidelines on Thursday for how its units can be used by voluntary buyers given the new Paris Agreement context, providing greater flexibility on the need for authorisation from the project’s host-country government.

EMEA

EU legislators aim to avoid delays in climate reforms after Parliament’s vote rejection

The EU’s institutions are striving to avoid any ultimate delays to the passage of the bloc’s Fit for 55 climate policy package, sources close to the process said on Thursday as parliamentarians agreed to a swift return to vote following their chaotic failure to adopt positions a day earlier.

EU ETS in line for volatility after Parliament failure to agree on reforms, say analysts

Analysts envisage a period of high volatility and low liquidity for the EU ETS as participants step back amid the uncertain outlook following the European Parliament’s rejection of proposed reforms, with experts split on whether a second attempt by the assembly would lead to higher ambition.

Euro Markets: EUAs snap four-day decline on post-vote short-covering

EUA prices broke a four-day streak of losses on Thursday as traders covered short positions built up around the European Parliament’s vote on the ETS reform package, while most attention was on natural gas prices, which jumped as much as 15% after a fire knocked out a major US LNG exporting terminal.

SparkChange cross-lists exchange-traded physical carbon vehicle in Germany, Italy

Investment manager SparkChange has cross-listed its physically-backed exchange-traded carbon commodity (ETC) on stock exchanges in Germany and Italy.

ASIA PACIFIC

China weakens ETS allocation standards, extends data submission deadline

China has announced new rules for determining the number of carbon allowances in its emissions trading scheme that traders say will lead to a bump in the number of permits, while also extending the deadline for submitting 2021 emissions data due to Covid disruptions.

Japanese gas company buys stake in Australian offset developer

Japan’s Osaka Gas Energy Oceania, the carbon trading arm of Osaka Gas, has acquired a minority stake in an Australian carbon project developer, to gain a deeper understanding of carbon markets, it announced Thursday.

Australia sees massive jump in carbon project registrations

The first quarter of the year has seen a huge spike in new carbon projects being registered with Australia’s Emission Reduction Fund, according to a regulator report, which also said it was unlikely it’s recent contract rule change would create an oversupply in the market.

AMERICAS

NA Markets: CCAs fall on profit taking before partial recovery, RGGI drifts after auction results

California Carbon Allowances (CCAs) bounced back to recover most of their initial losses this week, while RGGI Allowance (RGA) prices stagnated following the publication of Q2 auction results.

California’s PG&E plans 2030 target for cutting Scope 3 GHGs, increasing RNG use

California utility Pacific Gas & Electric (PG&E) will slash emissions from its fossil gas product and ramp up the availability of renewable natural gas (RNG) to its customers by 2030, the company said Wednesday.

High demand leads US farmers’ cooperative to open second enrolment window for soil carbon credit programme

A US farmer-owned cooperative has opened a second enrolment period for its 2022 voluntary agricultural carbon credit programme due to strong demand.

VOLUNTARY

EEX to beef up VCM contract, introduce multiple forestry futures

Plans by EEX to grab market share in the voluntary carbon market (VCM) include beefing up its CORSIA-eligible VER future with Gold Standard credits, and introducing many individual future vintages for its nature-based VER as far out as 2025, the exchange revealed on Thursday.

Buyers to earn compound interest from VCM tokens

A US-based technology startup is offering buyers of its tokenised voluntary carbon market offsets the ability to earn compound interest, lend, borrow, and underwrite loans from the financial product, it announced Thursday.

Carbon marketplace to display more ratings from VCM offsets on its site

A major global carbon credit marketplace has partnered with a ratings agency to host grades for voluntary carbon market offsets on its site, it announced Thursday.

UK-registered carbon credit insurance firm raises £350k in pre-seed funding

A UK-registered carbon insurance company that seeks to reduce delivery risk in removals transactions has raised £350,000 in a “heavily-oversubscribed” pre-seed funding round.

Canadian First Nations, clean-tech firm to partner on carbon offsets as govt unveils national market plans

A Canadian clean-tech firm is aiming to launch a multi-million dollar carbon credit blockchain initiative with Canada’s First Nations communities, they announced this week, as the federal government unveiled its national offset scheme.

INTERNATIONAL

Oil refineries need CO2 price above $100/tonne for green hydrogen switch

Carbon prices of between $100 and $150/tonne are necessary for the global oil refining market to switch to using green and blue hydrogen in the long term unless their production costs fall sharply, a consultancy warned Thursday.

AVIATION/SHIPPING

“Disturbing” decisions by EU lawmakers on aviation ETS reforms threaten global climate cooperation, airline group warns

The world’s largest airline association has slammed EU lawmakers for their decision this week to tighten emissions regulations on the industry, which it said undermines and threatens a separate global climate agreement.

Hyundai to design “world’s largest” LCO2 carrier as Asia-Pacific eyes greater role for CCS

South Korea’s Hyundai Heavy Industries (HHI) will develop a “next generation” liquefied CO2 (LCO2) carrier, it has announced, reflecting a further step being taken by Asian industrial players to bring CO2 transport options to commercial scale.

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

LNG stand next to your fire – An explosion at a Texas LNG plant will cut exports for weeks, briefly lowering prices for the fuel in the US while boosting them in Europe. According to Bloomberg, the Freeport LNG export facility will remain closed for at least three weeks after a fire on Wednesday. It issued a force majeure to buyers with shipments scheduled till at least June 30, according to traders with knowledge of the matter. Almost one-fifth of all overseas shipments of gas from the US went via the terminal last month. The US sent nearly three-quarters of its LNG to Europe in the first four months of the year, with the region now getting almost half of its LNG supplies from across the Atlantic. Some European countries have been attempting to wean themselves off Russian gas due to the invasion of Ukraine, but remain dependent on it in the short term. The outage will reduce supplies available to Europe and Asia while routing more shale gas into US storage caverns. US gas futures fell as much as 7.9% early Thursday before reversing losses, while Dutch gas futures rose 6% on the news.

Low-carb shipping – BHP and Japan’s NYK Lines have signed a Memorandum of Understanding (MoU) to expand and deepen their existing business relationship and to support the decarbonisation of ocean transportation across their shared supply chain, according to a press release from NYK Lines. BHP and NYK will jointly study the next generation of zero GHG emission ships fuelled by green or blue ammonia. If feasible, this could potentially support both organisations in their ongoing efforts to achieve their respective long term GHG emission reduction targets for shipping and present a further decarbonisation option for the shipping industry. BHP and NYK also aim to promote the use of GHG emission reduction measures such as energy-saving innovations and technologies, and alternative lower and zero GHG emission marine fuels (NYK Lines).

Farming focus – Investors managing $14 trillion have urged the UN to create a global roadmap to make the agriculture sector sustainable, a letter convened by investor network FAIRR to the UN’s FAO seen by Reuters showed. Food production accounts for around a third of global GHG emissions and is the main threat to 86% of the world’s species at risk of extinction, the group said, while cattle ranching is responsible for three quarters of Amazon rain forest loss.

Disinfo deluge – Climate policy is being dragged into the culture wars with misinformation and junk science being spread across the internet by a relatively small group of individuals and groups, according to a study published by the Institute for Strategic Dialogue and the Climate Action Against Disinformation coalition. The research shows that the climate emergency – and the measures needed to deal with it – are in some cases being conflated with divisive issues such as critical race theory, LGBTQ+ rights, abortion access, and anti-vaccine campaigns. It found that although outright denials of the facts of the climate crisis were less common, opponents were now likely to focus on “delay, distraction and misinformation” to hinder the rapid action required. (The Guardian)

EMEA

Dash for gas – The European Commission has proposed a deal to EU member states with Egypt and Israel to boost imports of natural gas from the eastern Mediterranean, according to a draft document seen by Reuters dated June 7. Under the plan, the EU could fund new infrastructure if it is in line with its commitment to discourage all further investments into fossil fuel infrastructure projects in third countries, “unless they are fully consistent with an ambitious, clearly defined pathway towards climate neutrality”. The partners will engage to reduce methane leaks from gas infrastructure, examine new technologies for reducing venting and flaring, and explore possibilities for using captured methane throughout the entire supply chain, the draft said. Read Carbon Pulse’s reporting on how the EU’s dash for non-Russian gas could boost methane controls elsewhere.

Nukes to be nuked – German Chancellor Olaf Sholz has nuked a possible proposal to prolong the phaseout of the country’s nuclear reactors, which are due to cease by the end of the year. As Germany is struggling to unbundle its energy dependence on Russia, Finance Minister Christian Linder stepped forward and argued that the current spike in energy prices could be tackled by extending the running time of Germany’s nukes. “We have to talk about the question of energy supply in a non-ideological way,” Lindner told ARD on Tuesday evening, adding that “We have safe nuclear power plants.” However, the statement contradicted the German plans to phase out nuclear by the end of 2022. And on Wednesday, Scholz reiterated that the government would stick to these plans. Further investments in nuclear energy would make no sense, he contended, as the building of a new nuclear reactor would cost up to €18 bln and a new plant would only be operational by 2037 or 2038 – a time frame where the government already expects to be completely independent of Russian gas imports. However, the German population is increasingly in favour of prolonging the runtime of the country’s nuclear fleet, with a recent survey by INSA showing the 50% of Germans would support this amidst the energy crisis triggered by the Ukraine war. (Euractiv)

Distance issues – Minimum distances for wind power turbines from residential areas could be suspended by Germany’s federal government in a bid to accelerate the technology’s sluggish expansion, Clean Energy Wire reports. According to a draft law initially seen by Reuters, the government wants to introduce changes to planning and construction laws as well as to environmental laws, with the aim of reserving 2% of the country’s area for onshore wind power. This is more than twice the area that is currently designated. Minimum distance rules, which are set by German states to minimise conflicts with neighbours, could remain in place as long as each state fulfils its contribution to national wind power buildout targets. The amendments might be adopted as early as this month. The federal government is justifying its intervention in state law with the requirements imposed by climate action obligations and with national security considerations in the wake of Russia’s invasion of Ukraine, which highlighted the greater energy import independence Germany could achieve with a resolute ramp-up of its renewable power capacity.

Iberian exceptions – The European Commission has approved, under EU State aid rules, a €8.4 bln Spanish and Portuguese measure aimed at reducing the wholesale electricity prices in the Iberian market (MIBEL) by lowering the input costs of fossil-fuel-fired power stations. The measure was approved under Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the Spanish and Portuguese economies are experiencing a serious disturbance. 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.

Bruise cruise – Barcelona is set to become the first port in the world to propose an emissions tax specifically for cruise ships calling in. A popular cruise destination and one of Europe’s busiest ports, environmental activists have previously criticised Barcelona for having high levels of carbon emissions and air pollution. “We expect to be able to present, in the coming weeks, the government’s proposal to regulate emissions in the port areas of Catalonia,” said Catalonia’s climate minister Teresa Jorda. (Maritime Executive)

E-fuel fancy – Europe could produce 1.83 mln tonnes of the sustainable aviation fuel e-kerosene in 2030 and save about 5 Mt of CO2 if policymakers boosted targets for its use, according to green group T&E in a report. The group called for higher blending mandates of at least 0.1% in 2025 and at least 2% in 2030, adding that the Commission’s proposed 0.7% by 2030 is too low to have an incentivising effect on the market.

ASIA PACIFIC

Green bonds – Singapore has published the governance framework for sovereign green bonds, ahead of the first such issuance expected in the next few months, Channel News Asia reports. This comes as Singapore moves to develop the green finance market and make green finance a driving force for sustainability. The Singapore Green Bond Framework sets out guidelines for public sector green bond issuances under the Significant Infrastructure Government Loan Act 2021 (SINGA). It covers the government’s intended use of green bond proceeds, governance structure to evaluate and select eligible projects, operational approach to manage green bond proceeds, and commitment to post-issuance allocation and impact reporting. In addition to providing the foundation for green bonds issued by the government, the framework will also serve as a reference for statutory boards that issue their own green bonds. At the handing down of Singapore’s 2022 budget, the finance minister, Lawrence Wong, announced that the government would issue S$35 bln of green bonds by 2030 to fund public sector green infrastructure projects.

Sustainable deal – Japan Airlines (JAL) and sustainable aviation fuel producer Gevo have signed a new agreement for the carrier to purchase 5.3 mln gallons of SAF (sustainable aviation fuel) for five years with deliveries expected to begin in 2027, Business Travel News Europe reports. JAL is a member of the Oneworld airline alliance and this agreement falls within the framework of a memorandum of understanding between Oneworld and Gevo, which was signed in March 2022, for the alliance’s member airlines to buy up to 200 mln gallons of SAF beginning in 2027 for five years. The agreement with JAL is subject to certain conditions, including Gevo developing, financing, and constructing one or more production facilities to produce the SAF, according to a statement from Gevo.

Rio renewables – Anglo-Australian mining company Rio Tinto has called for proposals to develop large-scale wind and solar power in central and southern Queensland to power its three aluminium smelters in the Gladstone region. It aims to support new wind, solar, and firming energy projects, connected to the grid. Its assets would require some 1,140 MW of reliable power to operate, which equates to at least 4,000 MW of wind and solar with firming by 2030, the company estimates. Rio is Queensland’s largest energy user, with its aluminium chief Ivan Vella saying the company has an important role to play in driving the development of competitive renewable energy sources. The company aims to cut its Scope 1 and 2 emissions in half by the end of the decade, after strengthening its climate commitments in October last year.

No fair – India has pushed back against Yale University’s 2022 Environment Performance Index (EPI), after being ranked at the bottom of 180 countries. The Indian government stated that the EPI failed to measure several key metrics while not assigning proper weightage to the indicators. GHG projections to 2050 were calculated based on changes in the last 10 years, instead of modelling longer timeframes, the extent of renewable energy capacity/use, additional carbon sinks, and energy efficiency. Yale’s EPI did not reflect India’s per capita GHG score of 31.42 vs. the highest score of 33.93, and failed to take the principle of Common but Differentiated Responsibilities and Respective Capabilities into account, India’s environment ministry complained. A few South Asian neighbouring nations also scored poorly in the EPI rankings. (CNBC TV)

Japan CCS – Japan’s JERA, Tokyo Gas and Inpex, plan to invest $748 million into Santos Bayu-Undan CCS project in the north of Australia, according to Nikkei Asia. The companies hope to transport CO2 from Japan by sea for disposal in Australia. JERA is a joint venture between Tokyo Electric Power Co and Chubu Electric Power. Santos estimates the CCS project, which would bury CO2 in the depleted Bayu-Undan reservoirs in the Timor Sea, could sequester up to 10MtCO2e per year. Santos expects the project could be operational by 2025. JERA and Tokyo Gas will calculate the cost of transporting CO2 emitted from their own power plants and LNG terminals, and determine whether they can commercialise the project, given that they will have to pay processing costs to Santos when they transport CO2 by sea.

Pakistan REDD+ – Pakistan’s Ministry of Climate Change has received $7.81 million from the World Bank to attract international REDD+ investment, according to APP. The funding was sourced from the bank’s Forest Carbon Partnership Facility, and will be used to implement the country’s REDD+ Readiness Preparation Project. This includes setting up governance, monitoring and verification frameworks. The ministry has also prepared a National REDD+ Strategy, and completed the design of payment for ecosystem services under two categories – mangroves and temperate forests.

AMERICAS

Cali-anda alliance –  California and Canada on Thursday signed a Memorandum of Cooperation on climate change mitigation strategies at the Summit of the Americas in Los Angeles. The memorandum signing was long on ceremony and short on details of concrete action, but outlined areas of cooperation between the state and country including clean technology and the circular economy. At the event, Canadian Prime Minister Justin Trudeau praised Quebec’s involvement with California on their WCI-linked cap-and-trade programmes. The prime minister was also grilled by a Canadian journalist for rubber stamping a major offshore oil project, Bay du Nord.

Island time – Meanwhile, US Vice President Kamala Harris on Thursday announced the beginning of US-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030), but didn’t say which Caribbean countries would be involved. Mexico is currently boycotting the Summit of the Americas over the exclusion of Caribbean and Caribbean-adjacent countries Cuba, Nicaragua, and Venezuela. The White House says it wants to help improve funding for clean energy projects and enhance local building capacity, as well as promote climate adaptation.

Greening portfolios – Canadian pension plan PSP Investments announced Thursday plans to reduce portfolio emissions by 20–25% by 2026. The C$230.5 bln fund pledged to increase its investments in green assets to C$70 bln by 2026 from C$40.3 bln, while cutting its holdings of carbon-intensive assets that lack any transition plans by 50%. (Reuters)

AND FINALLY…

No dramas – UK cabinet minister and COP26 UN climate talks president Alok Sharma is in the running to be the UN’s next global climate chief. With current UNFCCC executive secretary Patricia Espinosa set to step down next month, Sharma is understood to have been approached about the role and would be willing to take it on. ‘No-drama Sharma’ won plaudits for his calm stewardship of COP26 but would face stiff competition as some developing countries would prefer a candidate from the Global South as there is an unspoken understanding that top UN roles should be shared among rich and poor countries. Applications for the three-year job, which carries a salary of $207,000, close on June 24 and the form says women would be “especially welcome”. (Guardian)

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