CP Daily: Monday June 13, 2022

Published 02:26 on June 14, 2022  /  Last updated at 02:28 on June 14, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

EU lawmakers set to spurn chance to quickly reopen talks on ETS reform  

The European Parliament’s environment committee (ENVI) is likely to delay reopening divisive negotiations on EU ETS reforms following a meeting of senior lawmakers on Monday, a move that would postpone confrontation ahead of a second vote in the full assembly later this month.

ASIA PACIFIC

PREVIEW: NZ auction expected to clear above NZ$70, CCR to be entirely spent

The New Zealand government’s quarterly carbon allowance auction is set for this Wednesday, putting 4.825 million units out for sale on the NZX-EEX platform, with analysts expecting the cost containment reserve (CCR) to be completely exhausted leading to an upshoot in prices.

China ETS market power in the hands of the few, analysts find

More than 2,200 companies participate in China’s national emissions trading scheme, but the majority of surplus allowances and the power to determine the market’s trading patterns rest with fewer than 10 firms, a report released on Monday found.

VOLUNTARY

VCM Report: Market wobbles as draft buyer standards and recession fears further weaken prices

Standardised voluntary emission reduction (VER) credits returned to losses as participants scrambled to adjust positions following the publication of a set of draft buyer standards, amid a broader bearish outlook for prices due to wider macroeconomic weakness.

Corporate net zero targets risk overpromising, underdelivering, analysis says

More than one-third of the world’s largest publicly listed companies have net zero targets, however the majority have gaping holes in their strategies and many rely on offsets without any conditions associated with them, according to new analysis.

CPC makes Taiwan’s first crude oil “carbon neutral” trade in deal with Azeri NOC

State-owned oil, gas, and petrochemicals company CPC has made Taiwan’s first “carbon neutral” trade for a crude oil shipment in a deal involving the trading arm of SOCAR, Azerbaijan’s national oil company (NOC), it announced over the weekend.

Major digital VC fund strikes offsetting deal with crypto carbon firm

Digital venture capital fund Nemesis Technologies has struck a deal with a crypto carbon firm to offset the emissions from all of its future financial transactions.

Investor makes carbon credit purchase secured from Sierra Leone national park

A carbon finance investment firm has agreed to acquire carbon credits stemming from a rainforest national park in Sierra Leone that aims to generate half a million credits a year on average over the next 30 years.

EMEA

Euro Markets: EUAs slip on macro worries even as carbon proves resilient to energy weakness

EUAs slipped in modest trade on Monday as the market awaited developments from the European Parliament’s environment committee, which meets today and tomorrow to discuss a revamped report on the Fit for 55 ETS reform package, after the original version was rejected by the full Parliament.

Orsted to trap 400,000 tonnes of CO2 per year from 2025 for storage, green fuels

Danish energy company Orsted plans to capture 400,000 tonnes of CO2 from two combined heat and power (CHP) plants on an annual basis from 2025, both for permanent storage and in producing green fuels, the company announced on Monday.

EU will fail to meet Global Methane Pledge unless people eat less meat, warns report

Tackling methane emissions from cows is the blind spot of the EU that risks the bloc failing to meet the Global Methane Pledge unless policies are adopted to encourage a shift in diet away from meat and dairy products, an analyst report said Monday.

AMERICAS

RFS Market: RIN prices sink after market digests final 2022 quotas

US biofuel credit (RIN) values continued to drop on Monday as traders mulled the impacts of the recent finalisation of multi-year quotas for the federal Renewable Fuel Standard (RFS).

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

EMEA

Long-life – The UK is poised to strike a deal to keep open EDF’s West Burton A coal-fired power station that was set to close, as the government scrambles to strengthen its domestic energy security, the FT reports. Ministers and EDF are expected to finalise plans this week to extend the life of the facility from October to March. Read Carbon Pulse’s reporting on what is at stake for the UK in extending the life of its remaining coal facilities.

Not-so-wild – The UK government has scaled back plans to re-wild the country as the government retreats from the green agenda to focus on the cost-of-living crisis, The Times reports, citing anonymous officials. Ministers last year announced a landscape recovery scheme that would pay farmers £800 mln a year to restore the land. The fund has been quietly slashed to just £50 mln over three years.

Refining Italy – Italy’s ecological transition minister has said nationalisation was among the options for Lukoil’s Italian refinery based on the island of Sicily, EurActiv reports. In late May, EU leaders agreed on a gradual embargo – with some exemptions – of Russian crude, and a ban on seaborne imports could severely impact the refinery. The ISAB refinery accounts for around 20% of the Italian refining capacity. It employs around 1,000 workers and used to buy 30-40% of its feedstock from Russia, with the rest coming from international markets. Since Russia’s invasion of Ukraine, it has had to source nearly all its crude from Lukoil because international banks are no longer providing it with credit. In April, sources told Reuters a temporary nationalisation of ISAB was one option the government was considering in the case of sanctions on Russian oil.

Fixing the fix – German economy minister Robert Habeck has said that the government intends to tighten the country’s antitrust law amid concerns that oil companies have not passed on tax cuts on fuels to consumers, Clean Energy Wire reported. The government has lowered taxes on fuels for the months of June, July, and August as part of a larger relief package to help citizens deal with rising energy prices, exacerbated by Russia’s war against Ukraine. However, data from the first days indicated that the gap between pump prices and crude oil prices had increased sharply, Habeck told news magazine Spiegel. “What many experts had warned about has come to pass: The mineral oil companies pocket the profit, consumers feel nothing of the tax reduction,” Habeck said. The minister told public broadcaster Deutschlandfunk that he aims to give the Federal Cartel Office more powers and introduce an “antitrust law with claws and teeth”. A few days earlier, the co-leader of Germany’s Social Democrats Saskia Esken proposed introducing a speed limit on German highways as well as driving bans if gasoline prices do not fall, Politico reported. In an interview with the Berlin daily Tagesspiegel, Esken said the government’s recent attempt to offer relief at the gas pump by slashing taxes is not working and the governing coalition, which her party leads, should consider other options.

AMERICAS

Not enough scope The SEC’s climate proposed disclosure rule issued in March appears to fall short on auditing of Scope 3 emissions, according to Democratic Commissioners Allison Lee and Caroline Crenshaw. The current proposal mandates independent assessments for Scope 1 and 2 emissions disclosures, giving companies two years to have an independent reviewer provide “limited assurance” that the information is trustworthy. The assessments would get more rigorous four years after the adoption of any rules. Companies would need to secure a higher level of outside review called “reasonable assurance” to ensure their reporting is reliable. Scope 3 disclosures are required only if Scope 3 information is material to a company’s business, or part of its climate goal. Currently, litigation for Scope 3 is limited to reporting made without a reasonable basis or done in bad faith. (Bloomberg)

Furnace woods – US President Joe Biden’s Department of Energy on Monday proposed a new rule to make residential, fossil gas furnaces more energy-efficient, the country’s first significant update to furnace standards since the 1990s. In the proposed rule, the details of which were shared first with CNN, non-weatherised gas furnaces and furnaces used in mobile homes would be required to be much more energy-efficient, achieving a 95% annual fuel utilisation efficiency standard. Just over 40% of furnaces shipped today are at or above 95% fuel utilisation. And unlike previous administrations’ proposed standards for furnaces, the Biden administration proposed a new national energy efficiency standard that applies to all sizes of home heating furnaces. The proposed rule would effectively phase out less-efficient “non-condensing” furnaces, which waste excess gas, and make newer, more energy-efficient furnaces mandatory. The proposed rule would go into effect by 2029 at the earliest.

Sinking sands – BP has swapped its 50% non-operated interest in Cenovus’ Sunrise oil sands project for a 35% position in Newfoundland and Labrador’s Bay du Nord offshore oil and gas project. The transaction also includes C$600 mln ($466 mln) cash, and a contingent payment with a maximum aggregate value of C$600 mln expiring after two years. With this transaction, BP will no longer have interests in Canadian oil sands projects, but instead has added to its six exploration licenses in offshore Eastern Newfoundland. The transaction is expected to close in 2022, subject to regulatory approvals. (Offshore Energy)

Waste less – Vegas Renewable Diesel has acquired land near Las Vegas for the largest renewable diesel refinery in the Western US, targeting a capacity of 100 mln gal/month of renewable diesel. The plant uses ‘used motor oil’ as its primary feedstock. The company’s patented refining process is flexible enough to also mix in other petrochemical wastes, seed oils, and animal fats. The resulting fuel, termed ‘w2’, is fully ASTM D975 (petroleum diesel #2 standard) compliant and blendable, with properties superior to petroleum-based diesel #2, according to a company release.

ASIA PACIFIC

Worse than war – Fiji’s defence minister said on Sunday that climate change posed the biggest security threat in the Asia-Pacific region, a shift in tone at a defence summit that has been dominated by the war in Ukraine and disputes between China and the US, Channel NewsAsia reports. The low-lying Pacific islands, which include Fiji, Tonga, and Samoa, are some of the most vulnerable countries in the world to the extreme weather events caused by climate change. Fiji has been battered by a series of tropical cyclones in recent years, causing devastating flooding that has displaced thousands from their homes and hobbled the island’s economy. “In our blue Pacific continent, machine guns, fighter jets, grey ships and green battalions are not our primary security concern,” Inia Seruiratu, Fiji’s Minister for Defence, said at the Shangri-La Dialogue, Asia’s top security meeting.

Declaring neutrality – ENEOS and J-Power have announced a collaboration to jointly pave the way for carbon neutralising energy supplies, Market Screener reports. The collaboration includes a feasibility study of domestic CCS using both companies’ technologies and expertise. The two companies will jointly study the feasibility of large-scale domestic CCS systems to reduce CO2 emissions from fossil fuels. The companies will implement the first large scale CCS project in Japan, looking toward 2030 in collaboration with other partners who are working on carbon neutrality. The companies will contribute to achieving Japan’s reduction target for GHG emissions, while providing a stable supply of energy.

Maori miss out –  Paul Morgan, chair of the Maori and Iwi advocacy group Wakatu Incorporated has raised concerns that Maori landowners will miss out on sequestering credits they deserve in He Waka Eke Noa’s (HWEN) alternate pricing scheme for the agricultural industry, according to Stuff NZ. Morgan pointed out that Maori have lost 95% of their land, with only 1.4 mln ha remaining, 60% of which is hard hill country. Morgan said it was essential, once the pricing scheme was finalised, the sequestration that occurs across Maori land is connected and can be used to offset their farms. He said that it was a question of equity for the ministers who will consider the report and make decisions on its implementation in December.

We’re going net zero – Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund, has committed to achieving carbon neutral operations by next year, following the launch of its sustainability framework and targets, The Star reports. In addition, Malaysia’s sovereign wealth fund aims to achieve net zero emissions by 2050, in line with the national level commitment and the 1.5C pathway of the Paris Agreement. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, who officiated the launch, believes the sustainability megatrend cannot and should not be overlooked. According to him, the world is at a “crossroad”. “If we do not correct our course to avoid potential climate disasters and societal inequalities, we will have failed in our role as stewards for future generations,” he said during his speech, adding that it was not an issue that could be ignored, with the increasing impact of extreme weather events in Malaysia.

Hydrogen takes flight – Airbus and Kansai Airports have signed a Memorandum of Understanding (MoU) to explore the use of hydrogen at three of the group’s airports in Japan (Kansai International Airport, Osaka International Airport, and Kobe Airport), Asian Aviation reports. Through this partnership, Airbus and Kansai Airports will jointly prepare a roadmap to address challenges and define an advocacy plan for hydrogen needs. Both parties would lead the study into the development of infrastructure for the use of hydrogen in the aviation sector.

VOLUNTARY

Cheers to char – Carbon standard manager Verra is due to publish its biochar methodology next month, enabling projects from both soil and non-soil based processes (such as cement or asphalt) to generate carbon removal credits from activities all along the biochar value chain, the organisation confirmed to Carbon Pulse on Monday.

Net zero learning Rhode Island’s Brown University has agreed to purchase 137,500 carbon offsets from Tradewater, a global environment project development firm, as part of the university’s sustainability plan to reduce campus GHG emissions by 75% before 2025 and to become net zero by 2040. All credits will be issued by the American Carbon Registry and Verra. Tradewater generates carbon credits from the collection and destruction of potent refrigerant gases. The University selected Tradewater’s carbon offsets through an intensive review process facilitated by advisory firm, CustomerFirst Renewables.

AND FINALLY…

Bridge (fuel) to nowhere – The new LNG export terminals proposed or under construction in the US if constructed, would produce the equivalent of 90 mln MtCO2 every year – more than 20 coal-fired power plants – according to a new report from the Environmental Integrity Project. The US is the biggest exporter of liquified methane-based gas in the world, and the Russian invasion of Ukraine has pushed up demand for, and interest in, US LNG exports. Twenty-five new LNG export terminals have been proposed, with four under construction. (Climate Nexus)

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