CP Daily: Monday June 20, 2022

Published 03:30 on June 21, 2022  /  Last updated at 03:35 on June 21, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Prospects for EU ETS reform compromise improve ahead of repeat Parliament vote

The chances of a European Parliament compromise on EU ETS reforms appear to have improved as a crunch vote looms this week, amid few fresh submissions and as one well-placed source suggested to Carbon Pulse that a fourth political group may also support the move.

EMEA

Germany confirms plans to boost coal-fired power, incentivise industry to curb gas use

Germany on Sunday advanced plans to bring reserve coal power plants back into regular use and to install a mechanism to reward heavy industry for using less gas as Russia has cut deliveries of the fuel.

Euro Markets: EUAs shave early gains after Germany hastens coal plant drive to cut gas consumption

EUAs gave up some of their early sharp gains on Monday as the market digested the news that Germany’s government will bring reserve coal plants back on line but also reward industries that reduce gas consumption.

EU steel sector can achieve major CO2 cuts with switch to electric, report finds

Switching EU steel mills to electric arc furnaces and optimising the use of domestic scrap metal could cut the sector’s bloc-wide emissions by up to 73% by 2030, according to a study published by an environmental think-tank on Monday.

Switzerland’s first Phase 3 carbon permit auction clears at record high

Switzerland’s latest carbon permit auction has cleared at a new record high.

EU countries make more progress in 2022 free carbon permit handouts

Countries made a bit more progress over the past month in handing out this year’s free carbon permit allocations under the EU ETS, with five governments still not past the halfway mark.

AMERICAS

Brazilian lawmakers drop cap-and-trade plans in wake of government decree

Legislation to create a compliance carbon market in Brazil has been “completely disfigured” to exclude cap-and-trade amid pressure from allies of President Jair Bolsonaro, according to the elected representative who introduced the bill.

Colombia’s election result points to potential fossil fuel policy shift

Gustavo Petro, a former guerrilla rebel who spent two years in jail, has won Colombia’s presidency, promising substantial changes including oil & gas policy reform and climate justice.

California Assembly committee advances cap-and-trade review bill

Lawmakers from a California Assembly committee on Monday advanced a bill that would bring in more regular reviews of the state’s cap-and-trade scheme.

California March gasoline sales retreat from pre-pandemic levels, diesel hits record high

Gasoline consumption in California rose in March but still widened when compared to pre-pandemic levels, while diesel consumption notched a new 16-year high, according to state data published Friday.

ASIA PACIFIC

Australian resource companies team up to develop PNG nature-based offsets

Two Australian resource companies have agreed to explore the possibility of developing nature-based carbon offset projects in Papua New Guinea.

China aviation firm to set up carbon trading arm

A subsidiary of a major Chinese state-owned aviation conglomerate is establishing a carbon asset management firm to help push the sector’s decarbonisation process.

INTERNATIONAL

Several nations signal they will update Paris emissions pledges this year

Several big-emitting nations signalled their intent to revise their Paris Agreement emissions pledges over the weekend, a move that could bring the pact’s temperature limit goals within closer reach.

UN negotiators appoint supervisors for global carbon market mechanism

The UN’s new centralised market mechanism has confirmed appointments to its Supervisory Body, unlocking the opportunity to get started on a heavy workload that will help set the rules of government-level emissions trade in the Paris Agreement era.

VOLUNTARY

VCM Report: Nature volumes soar and prices plunge as market scrambles to offload risk

The sell-off across standardised verified emissions reduction credits (VERs) continued as traders moved to offload nature offsets over the past week, pressuring prices to lows last seen mid-autumn while volumes soared to record levels across several futures markets.

European OTC plaftform to offer carbon compensated wholesale gas deals

A European over-the-counter trading platform is to offer “carbon compensated” gas contracts on its platform next month after linking up with a major Germany-based utility, it announced Monday.

Former Canadian mining firm seeks new life as carbon project developer

A Canadian former mining company is pivoting into the carbon credit space, with three nature-based projects in the developing world in the early stages of design.

Startup raises another $1.5 mln for carbon web3 platform

A Stockholm-based startup building a vertically-integrated web3 platform to finance and sell carbon credits has raised $1.5 million in a pre-seed funding round.

AVIATION/SHIPPING

Qantas joins Airbus to kickstart sustainable aviation fuel sector in Australia

Australian airline Qantas will collaborate with Airbus in a $200 million investment aimed at establishing Sustainable Aviation Fuel (SAF) production in Australia, the two companies announced.

ICYM

WTO sets environmental precedent to raise hopes for climate fight

The World Trade Organization agreed on the first change to global trading rules for years on Friday, with an accord on fishing subsidies that gives a modest signal that nations can come together on global challenges even as climate issues drew scant focus.

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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

Gut feelings – Amid record-breaking weather events around the world, UN chief Antonio Guterres said fossil fuel companies and the banks that finance them have humanity by the throat. Speaking to the Major Economies Forum, he said: “We seem trapped in a world where fossil fuel producers and financiers have humanity by the throat. For decades, the fossil fuel industry has invested heavily in pseudoscience and public relations – with a false narrative to minimise their responsibility for climate change and undermine ambitious climate policies. They exploited precisely the same scandalous tactics as big tobacco decades before. Like tobacco interests, fossil fuel interests and their financial accomplices must not escape responsibility. (The Guardian)

EMEA

Energy efficiency’s ugly side – Confronted with an energy crisis and the need to rapidly decarbonise the building sector, the EU is now facing another threat: “renovictions”, where tenants are forced out of houses or apartments due to rent increases imposed after renovation. Buildings account for around 40% of energy use and 36% of CO2 emissions in Europe. Tackling the EU’s inefficient building stock is seen as key to achieving the bloc’s climate targets and reduce fossil fuel consumption, something the EU is trying to achieve via a recast of its Energy Performance of Buildings Directive (EPBD). But for poor households that are already facing an unprecedented energy price crisis, this may not immediately be good news.  “We’ve heard about renovictions in Germany. That’s the last thing we want – that people are evicted from their homes due to rising rent,” warned Ciaran Cuffe, a green MEP and the European Parliament’s lead negotiator on the recast EPBD. ‘Renoviction’, a term originally coined in Anglo-Saxon countries, either describes the eviction of tenants so extensive renovation can be conducted, or a de-facto eviction through a significant increase in rent following renovation works. The issue of renovictions threatens to create fractures in society, something already observed in Canada, where protests and lawsuits have cropped up. For Cuffe, who spoke at a EURACTIV event last week, the “just transition” of the EU is at stake. “We want member states to really keep this on their agenda, to ensure that people are protected,” he said. The European Commission, which tabled a revision of the EPBD in December, is well aware of this. “Our policy will be just or there just will not be a policy,” as EU Green Deal Chief Frans Timmermans recently put it in the European Parliament. (Euractiv)

Ask me about my CBAM – The British government is to formally consult on proposals designed to tackle so-called ‘carbon leakage’, as policymakers in the UK, EU, and US step up efforts to stop carbon intensive companies responding to higher carbon prices and tightening climate regulations by relocating to jurisdictions with more lax policy regimes. The Environmental Audit Committee (EAC) of MPs today revealed it has received a letter from Financial Secretary to the Treasury, Lucy Frazer, in response to its recent report on the issues in which she confirmed the government plans to undertake a consultation process on the potential implementation of a carbon border adjustment mechanism (CBAM) and product standards to address the risk of carbon leakage. In the EAC report, titled Greening imports: a UK carbon border approach, the Committee suggested the UK should emulate plans being advanced by the EU for a CBAM that would effectively impose a border tariff on imports from regions with lower carbon prices than the EU. The approach could mitigate against the potential risk of heavy emitters ‘offshoring’ their emissions and “send a clear signal for companies to re-evaluate their carbon footprint,” the committee said. It also argued that such a move could incentivise the development of low carbon products domestically as heavy emitting sectors look to avoid the higher carbon taxes that a CBAM would enable. (BusinessGreen)

Turbines not fine – More wind farms should not be built in Eastern Finland as turbines distract radar operations along the 1,300-km land border with Russia, according to the Finnish Defence Forces. Turbines over 50 metres tall or situated close to strategic areas require a green light from the armed forces. According to the military, the distance between a wind turbine and a radar installation must be at least 40 km. Wind farms create shadow zones, interfering with reflections making regional surveillance more difficult. In the last 10 years, about 80% of statements given by the army concerning the establishment of wind farms had been positive until the security situation changed due to the Ukrainian war and Finland applying for NATO membership. This year, most wind farm applications have been rejected as reconciling Finland’s move towards self-sufficiency in electricity and enhancing green transition while taking security concerns into account has complicated the situation. (Euractiv)

Ferry good – An electric ferry that connects the islands of Aero and Als in southern Denmark has this month broken the record for the longest distance travelled on a single electric charge, its makers have today claimed, BusinessGreen reports. Danish engineering giant Danfoss announced this morning that Ellen, an e-ferry that makes multiple daily trips from the town of Sonderborg on Als, broke a world record when it sailed 50 nautical miles, or 92 kilometres, without recharging. The journey in question, which was undertaken on June 9 as more than 30 energy ministers convened in Sonderborg for the IEA conference on energy efficiency, was more than twice the distance of the 40-kilometre trip the e-ferry normally takes between charges.

Funding forests – The European Commission has approved, under EU state aid rules, a €500 mln Romanian scheme made available through the Recovery and Resilience Facility (‘RRF’) to support the growth of new forest areas. The measure is part of Romania’s strategy to ensure the protection of forests and biodiversity. The scheme will also contribute to the EU’s strategic objectives relating to the green transition. The measure notified by Romania, with a budget of €500 mln, will be entirely funded through the RRF, following the Commission’s positive assessment of Romania’s Recovery and Resilience Plan and its adoption by the Council. The scheme, which will run until mid-2026, is aimed at supporting owners of agricultural land suitable for afforestation to establish new forest areas, which will generate a positive climatic impact in the long-term.

Italy’s alert – Italy is considering moving to a state of alert to ration gas consumption and increase gas storage following Gazprom’s gas supply cut, Italian newspaper Corriere della Sera reported. According to the Italian emergency protocol, the state of “alert” – which is the second level on a scale of three – may eventually result in the curb of supplies to specific industries. To weigh the decision on the state of alert, the Security Committee will meet at the ministry of ecological transition on Tuesday. Italy is currently in a “early warning” state after Gazprom announced it would supply 50% less gas on Friday, the fifth successive daily cut. Unless flows rise again, rationing consumption may prove necessary.

Another lawsuit – Five young people will on Tuesday file a lawsuit against 12 European governments over an international pact that allows fossil fuel investors to sue countries for taking action to tackle climate change. Originally drawn up to support energy sector investments in former members of the Soviet Union, the Energy Charter Treaty (ECT) allows investors to sue countries over policies that damage their investments, and has been branded an obstacle to climate action by campaigners. The plaintiffs represent countries hit by recent climate change-related disasters including Germany and Belgium, which last year suffered devastating floods after heavy rain that scientists said was made more likely by climate change. Their suit will ask the European Court of Human Rights to protect their rights by ordering governments to remove impediments to fighting climate change created by the ECT. The case targets Austria, Belgium, Cyprus, Denmark, France, Germany, Greece, Luxembourg, Netherlands, Sweden, Switzerland and Britain, all of which are ECT signatories. (Reuters)

ASIA PACIFIC

So much hydrogen – South Korea’s LG said it planned to build a hydrogen plant in South Korea to produce 50,000 tonnes of hydrogen annually by the second quarter of 2024, in a bid to reduce carbon emissions, Channel News Asia reports. The new plant is expected to employ technology, which converts methane to hydrogen by creating a chemical reaction under high-temperature steam. Meanwhile, two Australian companies, Woodside Energy and Fortescue Future Industries have entered final stage negotiations to become lead developer of the world’s largest green hydrogen production facility in New Zealand, Stuff reports. A hydrogen plant could potentially provide an alternative use for all the electricity currently used to power the Tiwai Point aluminium smelter, depending on its scale, should the smelter close in 2024.

Even more hydrogen – PTC India, the country’s largest power trader, said it has signed a pact with the Indian subsidiary of Norwegian low carbon services technology firm, Greenstat Hydrogen, to jointly develop green hydrogen solutions for the Indian power market, Business Standard reports. “PTC India and Greenstat Hydrogen India have entered into a MoU with the purpose of joint development of green hydrogen solutions. Under this MoU, both will jointly work towards development of green hydrogen projects in India,” it said. The areas of development shall include feasibility studies and/or project management services for green hydrogen solutions to potential beneficiaries in India.

For efficiency’s sake – Malaysia Airlines has six A380s it is struggling to find a buyer for and now is openly talking about replacing its fleet of older technology A330 widebody aircraft, Simple Flying reports. Speaking about replacing the aging Airbus A330s, he told Reuters the airline plans to announce a decision on replacing its fleet of 21 Airbus A330 widebodies with more fuel-efficient new generation planes by around mid-to-late July.

AMERICAS

A date with disclosure – Thirty US securities law and capital markets regulation professors have endorsed the SEC’s Authority to Pursue Climate-Related Disclosure proposal that would disclose climate risks of companies to investors. The professors endorsed a letter stating the SEC has the congressional authority to disclose information in the public interest or the protection of investors. House Republicans have claimed government overreach and threats of lawsuits abound. The climate risk disclosure would include a company’s carbon offset portfolio and net zero ambitions.

AND FINALLY…

Not your average cocktail dress – Released last week by clothing retailer Zara, this little pink number costs $90 and is sourced, in part, from captured carbon emissions. It’s also officially sold out. A company called LanzaTech uses a unique strain of bacteria to devour carbon monoxide and then “poops out ethanol, basically,” CEO Jennifer Holmgren said. The ethanol is sent to manufacturers who use it to produce polyester. (Bloomberg)

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