CP Daily: Thursday June 16, 2022

Published 03:01 on June 17, 2022  /  Last updated at 03:07 on June 17, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

UN talks bring climate damage to the fore ahead of Egypt summit

Rich-to-poor payments for climate-related harm is set to be the focus of year-end UN climate negotiations, experts said on Thursday as interim talks wrapped in Bonn amid concerns over whether voluntary carbon market infrastructure should feature in a new global emissions trading regime.

EMEA

Euro Markets: EUAs slip nearly 4% as gas surges, financial markets reel

EUAs tumbled towards €83 on Thursday as traders faced pressure to sell carbon to cover positions in the surging gas market, while investors braced for a global recession after the Fed’s interest rate hike.

EU ETS revenue used to support gas boiler retrofitting, study finds

Revenue from auctioning EU ETS allowances should be earmarked for climate action after countries within the bloc were found using some of the cash to support fossil fuels, and in particular new gas boilers through building retrofitting, according to a study published this week.

Belektron founder invests in Slovenian battery storage company

The founder and owner of Slovenian carbon trading company Belektron has acquired a one-third stake in a battery storage company based in the country, the companies said on Thursday.

UK launches £7.8-mln fund to accelerate tree planting

The UK government has launched a £7.8 million fund to support local authorities in England with the new staff and expertise needed to kickstart woodland creation and tree planting.

ASIA PACIFIC

Australia officially updates NDC to cut emissions by 43% by 2030

The Australian government has officially updated its 2030 nationally determined contribution (NDC) with the UNFCCC, increasing its 2030 emissions reduction target under the Paris Agreement to 43% below 2005 levels.

Australian timber company launches biochar project to turn dead wood into cold cash

An Australian timber company plans to convert millions of fire-damaged trees into biochar, in what it claims will be one of the largest projects of its kind in the world, while earning around A$90 million ($62 mln) through the sales of carbon removal certificates (CRCs).

VOLUNTARY

Retired EUAs to feature in new hybrid voluntary carbon contract

Retired EU ETS allowances will be used as a substitute for removals units in a new global “hybrid” credit for the voluntary carbon market (VCM) until the removals market develops enough liquidity, the contract’s developers said on Thursday.

Finnish firm launches blockchain-based forest VER registry with AI tech

A Finnish sustainable finance company on Thursday announced a partnership with an Israeli climate technology startup to create a new voluntary offset registry for forest-based projects.

US hemp industry cultivating plan to generate carbon credits

A US hemp exchange and benchmark price provider has teamed up with the Washington DC-based National Industrial Hemp Council of America (NIHC) to develop carbon sequestration opportunities in the country’s industrial hemp market.

AMERICAS

NA Markets: CCAs trend lower with broader markets, RGGI holds ground

California Carbon Allowance (CCA) prices dropped this week in line with macroeconomic weakness across broader markets, while RGGI Allowances (RGAs) ended the week relatively flat on continued strong bid interest.

INTERNATIONAL

Analysis of LNG carrier emissions highlights industry knowledge gaps, shortcomings in carbon neutral claims

University researchers that conducted the first ever “onboard” study of methane and CO2 emissions generated from an LNG carrier have reported higher levels of methane emitted during the voyage compared with previous assessments, highlighting the importance of accuracy in collecting GHG data for fossil fuel shipments, especially those that are claimed to be carbon neutral.

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CONFERENCES

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

World Bank diagnosis – The World Bank Group has launched the first in a series of diagnostic reports to help specific countries prioritise how to best integrate climate targets with development plans, focussing on Turkey first. The Country Climate and Development Reports (CCDRs) discuss development paths for cutting GHG emissions and boost climate adaptation, and also suggest concrete, priority actions. “These reports offer concrete ideas of high-impact climate actions that support development and also explore opportunities and reforms to enable private sector engagement in the transition,” said World Bank Group President David Malpass. The Turkey CCDR, which is publicly available, identifies several key action points, including reducing energy inefficiency and supporting a shift in transport, and how to enable a people-centred approach to the green transition. Over the next few months, the World Bank Group expects to publish more than 20 CCDRs.

EMEA

Onboard with onshore – German states will have to actively look for areas that can be designated for wind farm construction in order to meet government targets as per a new draft law presented on Wednesday, reported Clean Energy Wire. The cabinet is forwarding another set of draft laws aimed at accelerating the country’s energy transition, detailing new rules for using a minimum of 2% of the country’s surface area for wind turbines and clarifying rules for species protection to parliament, where the legislation is scheduled to be passed before the summer break in July. Following reports last week that disagreement between individual ministries, in particular over species protection, was likely to delay the government’s plan to get the new legislation into parliament before the summer break, the cabinet nevertheless pushed ahead with the two proposals that are to be passed by parliament as early as this summer. The government made good on its promise to assign a fixed share of the country’s land area to onshore wind by dividing it up between the 16 federal states. (Euractiv)

Science-based spending – The German government last year approved €1.31 bln in funding for research related to the country’s energy transition, according to the federal environment ministry as reported by Clean Energy Wire. As part of the government’s latest energy research programme, €878.24 mln in funding supported a total of 6,995 research, development, and demonstration projects. The government also granted €314.42 mln to the Helmholtz Association of German Research Centres. The country’s 2021 funding level was 8% higher than the previous year and marked a 55% increase compared to 2014. The financial support is aimed at the research activities of companies, research institutions, universities and other organisations related to new technologies and applications for the energy transition. The energy research programme focuses on the accelerated transfer of innovations into practice in the energy industry. To that end, the government is funding strategic energy transition undertakings, such as flagship hydrogen projects. The funded projects are presented in a newly published report.

ASIA PACIFIC

Stranded asset – Mining giant BHP has failed to find a buyer for New South Wales’ largest coal mine, and will close the operation in 2030. The company spent two years trying to sell its Mt Arthur operation in the state’s Hunter Valley, which employs 2,000 people, ABC News reports. The mine is approved to operate until 2026, but BHP has told the ASX it would apply to extend that until 2030. After that, it will close. Rehabilitation of the site is expected to take 10 to 15 years. BHP had earlier flagged plans to seek planning approval to run the mine through until 2045. BHP’s minerals president Edgar Basto said the company had reviewed potential options for the mine, including divestment and future investment requirements. “Seeking approval to continue mining until 2030 avoids closure in 2026 and enables BHP to balance the value and risk of those considerations and our commitments to our people and local communities,” he said. The mine was once valued at $2 bln, but that has been progressively slashed. After a write-down last year, BHP said the mine was worth nothing, once rehabilitation obligations were factored in.

Hydrogen base – Idemitsu and JERA have concluded a memorandum of understanding stipulating that they will jointly consider establishing a hydrogen supply chain based in the Ise Bay area, according to a JERA press release. On the back of demand for decarbonisation, hydrogen is expected to be used in large quantities at power plants and in industrial areas as a next-generation replacement for fossil fuels. It is essential, therefore, to develop large-scale receiving and supply bases near areas where hydrogen will be in demand, JERA stated. Meanwhile, South Korea’s industrial giant, Doosan, announced that it had signed a “business cooperation agreement on promotion of dual-fuel green ammonia projects” with KEPCO and Samsung, the company stated in a press release as well.

Getting personal Singapore-based MetaVerse Green Exchange is launching a pre-paid Net Zero Card that initially will allow people offset emissions from their transportation within the city state. The card and an accompanying mobile app will estimate carbon emissions from journeys with public or private transport, and at the journey’s end the exchange will automatically retire tokenised carbon credits to offset emissions from the trip. The exchange has created its own Carbon Neutrality Tokens (CNTs), digital credits generated from offset projects across several carbon standards verified by selected, whitelisted verifiers. In a soft launch planned for later this month, MetaVerse will issue 700 Net Zero Cards, hoping companies and organisations will use them to offset employees’ business and other travels.

Lifting the ceiling In China, Shenzhen’s carbon exchange has released for public consultation a set of new rules for trading on the platform. The most significant proposal is to increase the upper limit on on-screen bilateral trades to 30,000 permits from 10,000 currently, in a bid to boost on-screen liquidity. The exchange also said it would support the launch of government-approved carbon products beyond allowances for the Shenzhen ETS and CCERs, but did not specify which products those might be.

AMERICAS

Drilling detestation – Environmental groups Center for Biological Diversity and Wildlife Guardians have sued President Joe Biden’s (D) administration to challenge about 3,500 drilling permits approved for companies seeking to extract oil and gas from federal land. The lawsuit, the latest to draw the Interior Department and Bureau of Land Management’s oil and gas leasing programme into the courtroom, says the administration failed to take into account how methane emissions from the drilling would damage the overall environment and therefore violated the National Environment Protection Act, the Endangered Species Act, and the Federal Land Policy and Management Act. The lawsuit follows a strategy the groups used when they sued Interior last year over the environmental review underpinning November’s offshore oil and gas lease sale. The US district judge in that case sided with the groups and ruled that the leases were invalid, causing a huge setback for the companies seeking to expand drilling – and possibly carbon capture activities – in the Gulf of Mexico. (Politico)

Better jets – The US Federal Aviation Administration (FAA) on Wednesday proposed a rule to cut GHG emissions from new aircraft manufactured in the US after Jan. 1, 2028. The proposed rule would impose efficiency requirements for new subsonic jet aircraft and large turboprop and propellor planes not yet certified by 2028, and for those that are newly manufactured after the start of that year. The rule would not apply to planes that are already in service, and the FAA said the regulations would bring the US in line with rules developed under the UN aviation body ICAO. (Axios)

Not shy about hydrogen – Chevron plans to spend about $2.5 bln building up its hydrogen business this decade as the US oil major accelerates investment in low-carbon technologies. Chevron will develop both green and blue hydrogen, said Austin Knight, vice president of hydrogen at the company’s New Energies unit. The former is made with renewable energy, while the latter is created from natural gas equipped with technology to capture emissions. The American energy giant announced last fall it was allocating $10 bln toward developing renewable fuels, hydrogen, and carbon capture through 2028, but it didn’t specify how that money would be split among various technologies. (Bloomberg)

Renewable Rhode Island – Rhode Island lawmakers have approved legislation to require that all of the state’s electricity be offset by renewable energy by 2033. The measure now heads to the Senate, which last month passed an identical bill. The legislation would not prohibit utilities from using fossil fuels, but backers say it will result in a “corresponding amount” of renewables to be produced in the region and encourages construction of new green energy projects. Rhode Island’s Renewable Energy Standard currently requires utility companies to purchase renewable energy certificates for 19% of electricity sales this year, increasing 1.5% per year through 2035. The bill, 2022-H 7277A, would more aggressively accelerate those requirements. (Utility Dive)

Duck bucks – Canadian environment minister Steven Guilbeault on Thursday announced the federal government will invest C$5.6 mln over three years with Ducks Unlimited Canada. The funding will reduce GHG output by increasing biodiversity conservation efforts in southern Canadian wetlands and coastal areas in the country’s six eastern provinces. Ducks Unlimited Canada will use the funds to restore and conserve degraded wetlands and upland habitats, acquire habitat at high risk of being lost to alternative land uses, as well as acquire habitat to enable inland migration to coastal salt marsh habitats. As well, it will also permanently secure wetlands and upland habitats to provide significant long-term carbon storage, because wetlands are known to be particularly effective carbon sinks.

The Alberta book – Canada’s most emissions-intensive province, Alberta, released a new update to its offset emission factors handbook on Thursday. The 15-page document outlines emissions factors necessary to calculate emissions reductions under government-approved offset protocols. The update reflects the current grid factor and the loss of electricity transmission and distribution. This final electricity grid displacement factor (EGDF) will be in effect for offset projects initiated in 2023.

VOLUNTARY

Conducting themselves properly – IQE, a supplier to the global semiconductor industry, announced a formal commitment to net zero carbon neutrality across its operations by 2050, in accordance with the Science-Based Targets initiative (SBTi), the firm said in a press release. As part of this commitment, IQE will formulate science-based targets to reduce GHGs in line with a 1.5C warming target. IQE had previously established its ESG committee in Jan. 2022.

SCIENCE & TECH

Lovely weather – A La Niña event in the tropical Pacific Ocean is at near-record intensity for this time of year and could extend its streak into a rare third fall and winter season, forecasters at the National Oceanic and Atmospheric Administration told Axios. La Niña, which is characterised by cooler than average sea surface temperatures in the equatorial Pacific Ocean, has repercussions for the Atlantic hurricane season. Such events tend to weaken upper-level winds over the Atlantic Ocean, creating more favourable conditions for tropical storms and hurricanes to form and strengthen. For this reason, most forecasting groups in the public and private sectors are predicting an above-average hurricane season. Also to note that with each week that La Niña remains, the less likely it becomes that 2022 will set a new global temperature record. The cooler ocean waters in the Pacific tend to keep a lid on global average temperatures. However, La Niña has other likely consequences, for example exacerbating the drought in the Southwest.

Bioflight – Avfuel Corporation has signed an offtake agreement to purchase 1 bln gal (3.8 bln L) of sustainable aviation fuel (SAF) over 20 years from Alder Fuels, according to AviationPros. Alder’s technology produces ‘biocrude’ – an ultra-low to negative carbon crude oil feedstock – from biomass such as grasses, forest, and agricultural residue to replace fossil fuel in refineries that produce aviation fuel. Alder’s biocrude is in the process of global certification as a 100% replacement for petroleum-based jet fuel. The company expects to produce the first batch of SAF in Q1 2024.

AND FINALLY…

Running with Our Eyes Closed – Running Tide, an aquaculture company based in Portland, Maine, has said it expected to set tens of thousands of tiny floating kelp farms adrift in the North Atlantic between this summer and next. The hope is that the fast-growing macroalgae will eventually sink to the ocean floor, storing away thousands of tonnes of CO2e in the process and selling the resulting carbon offsets to companies. The company has raised millions in venture funding and gained widespread media attention, and it counts big names like the Chan Zuckerberg Initiative among its customers. But Running Tide struggled to grow kelp along rope lines in the open ocean during initial attempts last year and has lost a string of scientists in recent months, sources with knowledge of the matter tell MIT Technology Review. At least several of the departures were due, in part, to concerns that the company’s executives weren’t paying sufficient attention to the potential ecological effects of its plans. Some employees were also disturbed that Running Tide was discussing more controversial practices, including adding nutrients to the ocean to stimulate macroalgae growth.

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