CP Daily: Tuesday June 14, 2022

Published 02:59 on June 15, 2022  /  Last updated at 02:59 on June 15, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

France proposes delaying ETS2 start by a year in carbon market reforms

EU nations should consider delaying by a year to 2027 the launch of a second ETS for buildings and road transport, according to a draft proposal by France, which is currently steering member state talks.

EMEA

EU Parliament committee backs plan to resubmit ETS reform bill changes

The European Parliament’s environment committee (ENVI) on Tuesday backed a plan to ensure line-by-line amendments carried during last week’s failed first Parliament ballot will be voted on again by the full assembly, as senior MEPs held talks behind closed doors.

Euro Markets: “Baffling” EUAs post biggest gain in two weeks as cooling demand rises and gas jumps

EUA prices made their biggest gain in two weeks on Tuesday as European lawmakers agreed to resubmit proposed changes to the ETS reform package to the full Parliament later in June, and power and coal prices advanced on increasing cooling demand across much of Europe, while gas jumped as a major US LNG exporter delayed the restart of a unit.

EU lawmakers object to plans to feature gas and nuclear in green investment rulebook

Two cross-party committees of the European Parliament voted by a thin margin on Tuesday against including natural gas and nuclear energy on a list of climate-friendly investments, teeing up a full Parliament ballot early next month.

French bank raising €5 mln via EUA-linked fixed rate notes

A French bank is raising €5 mln through a structured fixed rate investment product linked to EU carbon allowances.

Private equity firm scoops up controlling stake in European energy markets news provider

A US-headquartered private equity firm has purchased a majority share in a European energy markets news provider.

ASIA PACIFIC

NZ Market: New Zealand auction clears at NZ$76, CCR exhausted

New Zealand’s second carbon allowance auction for the year cleared at NZ$76 ($47.31), while the entire cost containment reserve (CCR) for the year has now been exhausted, as was widely predicted.

TotalEnergies buys into Adani’s $50 bln hydrogen splurge as report urges massive uptake to meet Paris goals

European oil major TotalEnergies has acquired a 25% stake in a new hydrogen-focussed business arm of the Adani conglomerate, Adani New Industries Limited (ANIL), as the Indian industrial behemoth also committed to a massive $50 billion investment in a green hydrogen ecosystem through the subsidiary over the next ten years, it was announced on Tuesday.

Australia’s CEFC awards A$2 million to help scale new shark-inspired tech for aviation, shipping

Australia’s Clean Energy Finance Corporation (CEFC) has awarded a A$2 million ($1.4 mln) grant to a local company that has developed a unique technology to dramatically improve fuel efficiency for aviation and shipping and cut carbon emissions in both sectors, it announced on Tuesday.

Australian Market Roundup: Small number of projects registered as watchdog looks to stamp out greenwashing

Only a handful of Australian companies have registered new offset projects with the Clean Energy Regulator the past week, while the nation’s corporate watchdog is urging industry to dob in those engaging in greenwashing.

INTERNATIONAL

UN climate talks outline steps needed to advance global carbon markets

UN climate negotiations in Bonn have outlined several technical issues that need to be addressed to advance government-level emissions trade, including infrastructure to track trade, accounting practicalities, and other issues that also have implications for the voluntary carbon market (VCM).

VOLUNTARY

New ombudsman touted to give corporates money back from dodgy VCM credits

Corporates unwittingly buying bogus or dodgy offsets in the voluntary carbon market (VCM) may be able to get their money back in the future, just like buying a toaster or television that does not work, a board member of the Integrity Council for the Voluntary Carbon Market (IC-VCM) said Tuesday.

New hybrid carbon contract to launch Friday, expected to trade at $7-8

A standardised contract touted as providing a single global price for voluntary carbon market (VCM) credits will launch on two exchanges later this week and should initially trade at $7-8/tonne, a webinar heard on Tuesday.

VCM marketplace looks to offer ‘forward’ offsets for sale

A crypto carbon initiative and an online marketplace have teamed up in an effort to boost the market for pre-purchasing voluntary carbon market (VCM) offsets and secure more funding for project developers.

AMERICAS

US utility NextEra Energy announces 2045 decarbonisation target without offset use

Vertically integrated utility NextEra Energy on Tuesday said it will decarbonise its operations by 2045, but without dependence on offsets to supply emissions-free energy across the US.

Anew day dawns: Carbon credit firms Bluesource and Element Markets rename merged entity

North American offset project developer Bluesource and environmental commodities company Element Markets have merged to form “Anew”, the companies announced Tuesday.

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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

Shas ya later – Saudi Arabia’s senior climate diplomat Ayman Shasly has stepped back from his role in international negotiations.  An international policy advisor at the energy ministry and former Saudi Aramco employee, Shasly has been a prominent figure representing Saudi Arabia for years: at the UN climate talks, the Intergovernmental Panel on Climate Change (IPCC) and as a board member of the Green Climate Fund (GCF). He served as chair of the powerful Arab group for a decade, taking on the role in January 2012.  Albara Tawfiq, an international policy advisor at the energy ministry and policy advisor at oil giant Saudi Aramco, confirmed that Shasly is not attending interim climate talks in Bonn this month. Tawfiq is chairing the Arab group’s meetings in his absence.  (Climate Home)

EMEA

Gazpromises – The German government is preparing to lend billions to rescue a former arm of Gazprom now under the control of the country’s energy regulator, Bloomberg reports. A bailout for Gazprom Germania could come as early as this week, with a loan in the range of €5-10 bln. The money would help stabilise finances and ensure security of supply after Russia curbed shipments to its former unit.

Offshore burial – The UK is launching the UK’s first-ever carbon storage licensing round with 13 areas of potential available.  The new carbon storage areas, alongside the six licences which have already been issued, could have the ability to make a significant contribution towards the aim of storing 20-30 mln tonnes of CO2 a year by 2030. The areas being offered for licensing are off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire and are made up of a mixture of saline aquifers and depleted oil and gas field storage opportunities. The government said this licensing round is envisaged to be the first of many as it is estimated that as many as 100 CO2 stores could be required to meet the UK’s net zero emissions target by 2050. (Upstream)

Absurd airlines – Ryanair has welcomed the European Parliament’s vote to extend the EU ETS to all long-haul flights departing EU countries, declaring that the “richest passengers” would now pay their fair share of environmental taxes. The budget airline – Europe’s largest carrier by fleet size and emissions output – said that EU citizens on short-haul flights accounting for less than 50% of the bloc’s CO2 emissions from aviation had paid all the tax to date, and that the levy had discriminated against lower-income households as a result. “It is absurd, unfair, and inexplicable that short-haul flights across Europe, which are taken by hard-pressed European consumers and their families, pay all of Europe’s ETS taxes yet they account for less than 50% of Europe’s aviation CO2 emissions. It is high time that the richest visitors to/from Europe travelling on long-haul flights paid their fair share of environmental taxes,” said Michael O’Leary, CEO of Ryanair. “This exemption of long-haul flights under the ETS regime, which was designed to further subsidise and support high fare flag carriers like Air France, Lufthansa, KLM and others.” The vast majority of Ryanair’s emissions are taxed under the ETS, with more than 10 of the estimated 12 Mt of CO2 emitted by the airline subject to the ETS in 2019. By comparison, Lufthansa, British Airways, and Air France, which each emitted between 14-19 Mt per year prior to Covid, faced compliance obligations on less than a quarter of their emissions, Ryanair said. (Business Plus)

ASIA PACIFIC

Hydro hype – China’s biggest dam builder says the country is launching an even larger than expected campaign to build hydro energy storage to complement renewable power, Straits Times reports. The nation will start construction on more than 200 pumped hydro stations with a combined capacity of 270 GW by 2025, Mr Ding Yanzhang, chairman of Power Construction Corp of China, the country’s largest builder of such projects, said. This would also be a massive increase from what China proposed just three months ago in its 14th five-year plan for energy development, when officials said the country wanted to have 62 GW of pumped hydro in operation and another 60 GW under construction by 2025.

Coal closure – The Western Australian state government has announced it will shut its state-owned coal fired power stations by 2030 and will not invest in any new gas-fired power stations by the same date. Coal makes up around 30% of WA’s energy mix, with the government on Tuesday announcing it will commit some A$3.8 bln ($2.6 bln) in new green power infrastructure in the state’s main grid, the South West Interconnected System, particularly in wind and storage, to make up for the generational capacity lost once the coal power stations close. State-owned power company Synergy operates two coal fired power stations, the Collie and Muja power stations, the former will shut by 2027 while the remaining units at Muja will close in October 2029. The government has also announced A$547 mln in funding to go towards new jobs and industries in the rural town of Collie, where around 1,200 workers will be affected by the closures. WA premier Mark McGowan said the transition was needed given that the power stations were being pushed out of the market by the uptake of renewables. The premier said without action, average yearly household electricity costs would rise by more than A$1,200 by 2030. Western Australia’s electricity market is seen as relatively stable compared to the east coast, where a combination of rising global coal and gas prices, cool temperatures, and a series of coal-fired power station outages, leading to an energy crisis similar to what was seen in the UK earlier this year. On Tuesday, the market operator warned load shedding could occur across some capital cities, and has been forced to implement an electricity price cap for consumers of A$300 per megawatt hour, and gas prices at A$40 per gigajoule.

AMERICAS

Oversight, out of mind – US House Democrats are investigating work done by major public relations firms and a trade group to spread disinformation for the fossil fuel industry. Reported first by the Washington Post, Natural Resources Committee and its Oversight subcommittee, chaired by Raul Grijalva and Katie Porter, respectively, have requested documents from Blue Advertising, DDC Public Affairs, FTI Consulting, Singer Associates, and Story Partners, as well as the American Petroleum Institute. In a press statement, Rep. Porter said “fossil fuel companies have been lying to the public for decades to cover up the damage they’re doing to the planet and our long-term economic well-being. The American people deserve the truth—and Big Oil needs to be held accountable. Chair Grijalva and I want answers.” The only response thus far has been from the American Petroleum Institute which, in response to the query about misleading the public about the climate risks of petroleum products, provided a quote from a spokesperson who doubled down on the misleading claim that fossil fuels are “reducing US emissions.” (Climate Nexus)

VOLUNTARY

Citizen speak – Offset registry American Carbon Registry (ACR) on Tuesday released for public comment its updated methodology for verifying offsets from the Destruction of Ozone Depleting Substances (ODS) and High-Global Warming Potential (GWP) Foam. These offset protocols were first adopted in 2011, and subsequently revised in 2014. Updates from version 1.0 include expanding the list of ODS and High-GWP foam materials eligible for destruction and adding Canada as an eligible country for sourcing the listed eligible materials. ACR’s offset protocol methodology is open for public comment through July 13.

AND FINALLY…

ESG for your sins – West Virginia financial regulators are preparing to blacklist six of the nation’s biggest financial firms over their support for ESG policies. West Virginia Treasurer Riley Moore notified BlackRock Wells Fargo, JP Morgan Chase, Morgan Stanley, Goldman Sachs, and US Bancorp on Friday that they will be denied access to state contracts in 45 days, according to letters Politico obtained via a public records request. Placement on the state’s Restricted Financial Institution list would leave the firms ineligible to enter into or remain in financial contracts with the state. They have 30 days to respond with information showing they’re not boycotting the fossil fuel industry. The legislation is part of a wave of bills pushing back against ESG financing, with mostly-Republican leaders claiming that financial firms are choosing politics over sound lending practices by reducing their funding of fossil fuel projects to appease activist investors.

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