CP Daily: Friday June 10, 2022

Published 01:20 on June 11, 2022  /  Last updated at 21:34 on June 13, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Tech to check: The digital revolution is finally coming to carbon project verification

While interest in the voluntary carbon market (VCM) continues to surge, some of the underlying mechanics need a revamp to keep pace, according to some experts highlighting how harnessing technology can improve both carbon project verification and overall impacts.

VOLUNTARY

RECs wrecking Paris Agreement goals, report warns

Nearly half of future Scope 2 emission reductions reported by companies will not be real if they continue to use Renewable Energy Certificates (RECs) to meet their Science Backed Targets (SBTs) for cutting greenhouse gas pollution, a report has claimed.

Eighty-five nations seek ‘share of proceeds’ from voluntary carbon market

Some 85 vulnerable countries are urging the voluntary carbon market to apply principles from the Paris Agreement’s Article 6 emissions trading rulebook, including shaving off a share of credit issuance proceeds to help them cope with a warmer climate.

Korean asset manager to launch voluntary carbon fund

A South Korean asset manager is in the process of setting up what is thought to be the nation’s first large-scale fund for the international voluntary carbon market.

ASIA PACIFIC

SK Market: Korean CO2 permits drop to 1-year low as emitters dump surplus

South Korean CO2 allowances on Friday fell to their lowest level in nearly a year as traders sold off excess permits ahead of the compliance deadline in order to maximise the amount of units they can bank to next year.

CN Markets: CEA price stable, but outlook bleaker after latest govt announcement

The allowance price in China’s national emissions trading scheme remained unchanged again this week, but trading activity stalled as market participants said newly announced changes in allocation regulations spurred further bearish sentiment.

EMEA

Euro Markets: EUAs chalk up 5.8% weekly loss despite late surge as traders await progress on EU ETS reforms

EUAs chalked up a 5.8% weekly loss despite a late move higher in light trading on Friday, as traders awaited news on the European Parliament’s efforts to adopt a position on the Fit for 55 ETS reform package amid weaker energy prices.

UK experts target inclusion of negative emissions in ETS, urge EU linkage

Engineered greenhouse gas removals should be integrated into the UK ETS in the mid- to long-term, multiple experts told a conference on Friday, urging linkage of the system to the EU carbon market while pointing to CfDs as a more appropriate immediate approach for scaling the technology.

AMERICAS

New US ETF to follow global carbon allowances alongside gas and metals

A Chicago-based firm on Friday launched its new exchange-traded fund (ETF) that will follow an index composed of carbon allowances, fossil gas, and metals.

Three Minnesota CCO dairy digesters apply for LCFS programme

A trio of past California Carbon Offset (CCO) livestock projects in the Land of 10,000 Lakes are seeking to switch over to the California Low Carbon Fuel Standard (LCFS) instead, according to data published by state regulator ARB on Friday.

CCA and RGGI emitters add to holdings, while speculators in both markets reduce net positions

Compliance entities raised their California Carbon Allowance (CCA) net length back towards a 13-month high this week, while speculators modestly retreated on their positions following last week’s surge, according to US Commodity Futures Trading Commission (CFTC) data published Friday.

AVIATION/SHIPPING

Research flags slow-speed potential for shipping abatement, as IMO talks limp into port

Containerships can cut CO2 emissions by an average of 14% if they optimise speed to arrive ‘just in time’ at ports, according to a report published ahead of the shipping sector’s widely-expected entry into the EU ETS and as this week’s global-level negotiations again struggled to curb the sector’s climate impact.

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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

EMEA

Digging more – Poland’s prime minister Mateusz Morawiecki has vowed to support higher production at the nation’s coal mines in order to bring down heating and energy prices that have soared amid the war in neighbouring Ukraine and the EU’s efforts to reduce its dependency on Russian energy sources. The Polish government’s aim is to reduce fossil fuel prices ahead of the next heating season to the level they “were at before the sudden rise that was linked to the embargo on Russia”. “We will do this,” Morawiecki said. (AP)

Pleading for insulation – The boss of utility E.ON has issued a plea to the UK government to invest in making homes in the UK more energy efficient to help slash bills and carbon emissions, the Independent reports. Michael Lewis said the country needs “a massive ramp-up” in insulation and other energy efficiency projects. He told MPs on the environmental audit committee: “Our plea to the Government has always been to push hard on energy efficiency, because that’s the proven way, the only silver bullet, for this crisis.” He conceded it might take many decades to get every home in the country – there are 19 mln that need more insulation – up to scratch, but he said there are also things that can be done quickly. The UK has the leakiest housing stock in Europe, with many old homes that were not built with insulation.

10-year silence – Bulgaria has an estimated 500 bcm of shale gas but the current legislation prevents its exploitation and the current government has no plans to change the status quo, despite Russia having stopped supplies. The country needs three bcm per year. The 10-year silence about shale gas in Bulgaria has been disrupted. The alarm was triggered by Russia’s suspension of natural gas supplies, which necessitated the urgent supply of US liquefied natural gas and prompted experts to put unconventional gas on the agenda. The government has already announced that the contract with Russia’s Gazprom, which expires at the end of 2022, will not be renewed. (EurActiv)

Balkan at fossil – The Albanian government has announced the approval of two new solar panel parks and an agreement on two gas fields, as a part of a continued bid to diversify the country’s energy sector. Albania currently generates almost 100% hydropower, but as it is unable to store it, much is sold and fossil energy is purchased at a higher price from neighbouring countries. Since the Russian invasion of Ukraine and push to reduce dependence on energy from the east, Albania has moved to gasify and explore renewable and sustainable energy sources. (Exit news)

ASIA PACIFIC

Big H2 Indian solar developer ACME Group and the Indian state government of Karnataka have committed to spend $6.7 bln on a massive green hydrogen and ammonia plant, according to Recharge. In a MoU signed by the pair this week, ACME and the state laid out their ambition to deliver a plant that will produce 1.2 Mt per year of green hydrogen and green ammonia by 2027. Power for the project would be sourced from a dedicated solar plant. ACME declined to say how much of the above figure would be ammonia and how much would be hydrogen. ACME is already developing a green ammonia plant of comparable size, in Duqm, Oman, in partnership with Norway’s Scatec.

Kean for renewables The Australian state of New South Wales is committing A$1.2 bln ($855 mln) to fast-track critical transmission projects to deliver more renewables to the grid. The Nine newspapers report the record funding, to be included in this month’s budget, will be spent on a financing facility to underwrite the construction of transmission infrastructure to support the state’s renewable energy zones. The Transmission Acceleration Facility will provide revenue certainty for project developers and state energy and environment minister Matt Kean estimates it will drive at least $14 bln in private transmission infrastructure investment. The state is in a race to replace ageing fossil fuel assets with renewable energy, as Origin Energy and AGL Energy are pushing ahead to close their coal-fired power station earlier than expected.

AMERICAS

Loans at the ready – Four development banks will jointly facilitate up to $50 bln over the next five years to back climate goals in the Americas, US officials said ahead of the Summit of the Americas in Los Angeles. The lenders are the Inter-American Development Bank, the CAF Development Bank of Latin America, the Development Bank of Latin America, the Caribbean Development Bank and the Central American Bank for Economic Integration. The US additionally plans to spend $12 mln on programnes in Brazil, Colombia, and Peru to reduce deforestation, while launching a partnership with Caribbean countries. (Reuters)

Bay du More  The Canadian government could greenlight three to four additional oil and gas exploration projects off the coast of Newfoundland within the next 10 years, OilCo CEO Jim Keating told the Energy NL conference in St. John’s this week, according to CBC. Canadian PM Justin Trudeau’s government approved Norwegian firm Equinor’s controversial Bay du Nord project in April, and a government-funded seismic exploration programme over the last decade has identified 20 prospects with a one-billion-barrel potential. Keating’s comments this week came as Trudeau defended the Bay du Nord approval while signing a climate action and nature protection memorandum with California Gov. Gavin Newsom on Thursday.

VOLUNTARY

Over the black hills and far far away – Black Hills Energy is pursuing a voluntary renewable natural gas (RNG) and carbon offset pilot programme for its residential and business customers, said parent company Black Hills Corp. The Rapid City, South Dakota-based utility filed a proposal with the Colorado Public Utilities Commission (PUC) for a programme that would offer customers the opportunity to offset 100% of emissions associated with their own natural gas usage through carbon offset credits and RNG attributes. The four-year pilot programme would run from 2023-26, pending Colorado PUC approval, with the potential to expand the programme to more Black Hills customers. (Natural Gas Intelligence)

AND FINALLY…

Where’s the beef? Soaring inflation across the world may disincentivise beef producers from pursuing carbon-neutral products over fears that customers will be unwilling to pay a premium on a product that is already becoming expensive. Beef Central reports that premiums have been hard to come by for the early movers in the carbon-neutral market. Angus Gidley-Baird, senior animal proteins analyst with Rabobank, said consumers’ willingness and ability to pay for carbon-neutral products is likely to be tested in 2022 as inflation levels increase. A report from Rabobank said with all of the first movers in the carbon-neutral beef market purchasing offsets to make the product, careful consideration was needed by companies in the market. The report labelled access to the market, access to finance, improving productivity, premium prices, and new revenue streams through carbon credits as the possible return on investments.

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