CP Daily: Tuesday June 28, 2022

Published 03:24 on June 29, 2022  /  Last updated at 03:24 on June 29, 2022  /  Newsletter  /  No Comments

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

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TOP STORIES

EU ministers reach agreement on climate bills after talks run late

EU nations agreed a united line on five climate policy reform proposals after intense talks that stretched for over 16 hours into the early hours of Wednesday, with ministers stumbling on thorny issues such as the size of the Social Climate Fund (SCF) and an ETS price controlling mechanism tasked with curbing sudden price hikes.

G7 agrees on ‘inclusive’ climate club, shies away from carbon price unison

G7 leaders wrapped up their three-day summit on Tuesday with German ​​Chancellor Olaf Scholz touting an agreement on a new international climate club, while leaders also noted the requirement for greater fossil investment in the face of Russia’s invasion of Ukraine.

EMEA

Euro Markets: EUAs rise to four-week high amid short squeeze as market awaits Council reform position

EUAs rallied amid a short squeeze after a weak opening on Tuesday as the market awaited a united position among member states on ETS reforms, while energy prices sagged as the EU sought more ways to cut gas consumption.

UK climate polices only enough to cover 40% of net zero effort -advisors

The UK’s legislative framework is insufficient to meet its emissions targets and has “shocking” shortcomings on energy efficiency, the government’s expert advisors said in a report published Wednesday.

Spanish police bust major F-gas smuggling ring

Spanish police have arrested 27 people and seized €11 million worth of smuggled F-gases in a major bust of a criminal network.

AMERICAS

Canada’s Clean Fuel Standard regulation omits DAC, EOR for credit eligibility

Canada is set to release its final Clean Fuels Standard (CFS) regulation on July 6 that targets reducing the carbon intensity (CI) of transportation fuels, and omits carbon credit eligibility from DAC and EOR, the ministry said in an update on Tuesday, retaining the compliance start date as July 1, 2023.

ASIA PACIFIC

South Korea to scale up ETS auctioning

South Korea will increase the share of CO2 allowances in its emissions trading scheme that is auctioned instead of handed out for free, saying the current allocation of 10% is insufficient.

NZ companies launch country’s first AI-enabled international offset, exchange

Two New Zealand companies have teamed up to offer landholders an opportunity to develop and sell the country’s first AI-enabled voluntary offsets via a new carbon exchange.

Oil majors join up in big plan for China offshore CCS hub

Oil and gas heavyweights Shell and ExxonMobil have teamed up with Chinese national oil company giant CNOOC to explore the feasibility of establishing a large-scale offshore CCS hub in southern China, they announced on Tuesday.

INTERNATIONAL

Coal recovery hobbles renewable energy efforts to cut global emissions -BP

A comeback in coal demand last year pushed global CO2 emissions from energy perilously close to 2019 levels, even though there was a surge in renewable power and economies were still battered by the Covid catastrophe, oil major BP said in its annual statistical review on Tuesday.

More than half of listed companies need to lift climate performance to limit warming to 1.5C -report

The world’s publicly listed companies must reduce their carbon intensity by an annual average of 8-10% every year until 2050 if the target to limit warming to 1.5C is to be met, although only 39% of companies have managed to reduce their emissions intensity at that rate over 2019-20, research has found.

VOLUNTARY

CME adds trailing futures to pick up VCM offsets outside of the roll

CME Group is adding two new voluntary carbon market futures contracts to cover vintages no longer eligible for delivery on its existing rolling contracts, the exchange operator announced Tuesday.

Offset ratings agency downgrades REDD project, keeps on “ratings watch”

A carbon credit rating agency has downgraded a REDD forest protection project in its latest update, but also left the activity open for further review.

‘Mammoth’ DAC plant in the works as removals firm looks to splash equity raise

A firm specialising in building and operating direct air capture (DAC) facilities has said it will build its largest plant following a large equity raise earlier this year, as it targets multi-million tonnes of carbon removal capacity by 2030.

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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 most promising developments? What are the requirements and next steps for scaling up at the required speed? And when 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, amongst other topics 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 with the code CARBONPULSE15: https://bit.ly/3t4CmH6

Asia Pacific LNG & Gas Summit – July 6-8, Singapore: The Premier Meeting Place for LNG Buyers & Sellers in Asia Pacific. As a Carbon Pulse our reader, you are invited to attend the Asia-Pacific Carbon Markets Session (July 8, 1530-1700 local time) at a special rate of USD 500. Participants will also receive access to the Award Evening (July 7, 1800-2000) and all networking sessions on July 8, as well as the Networking App. You are also welcome to a 15% discount for the entire three-day event. To register, contact Emmanuel Bossman at LNGAsia@dmgevents.com.

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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

Hydrogen agreement – Mitsubishi Power has signed a decarbonisation agreement for hydrogen fuel conversion with leading Egyptian Alexandria National Refining & Petrochemicals Company (ANRPC), Hydrogen Central reports. Mitsubishi Power, part  of Mitsubishi Heavy Industries, signed a full turnkey contract with ANRPC to provide advanced hydrogen fuel conversion technology solutions, supporting the company to achieve its decarbonisation goals. The solution will be installed at the ARNPC refinery plant in Alexandria, which provides 30% of Egypt’s gasoline supply for domestic consumption. Under the terms of the contract, Mitsubishi Power will be responsible for the design, engineering, procurement, construction, and commissioning of fuel conversion solutions for the existing 100 tonne/hour boiler, enabling it to fire up to 100% hydrogen by the end of 2023.

EMEA

More room for vroom Ferraris and Lamborghinis might be the reason the EU waters down a key element of the climate agenda: phasing out the combustion engine by 2035. Italy is among a number of countries pushing for a five-year delay. The issue set up a tough day of negotiations for EU environment ministers as they sought agreement on crucial pillars of the bloc’s landmark climate regulation. France, in the final days of its EU presidency, is looking to get a sign-off that will open the way for talks with the European Parliament later this year. Beyond cars, disagreements are likely to focus on protection for the region’s poorest citizens. The amount of money being made available to help shield consumers from the economic impacts of the transition is being hotly contested, so expect talks to potentially drag into the night. (Bloomberg)

Shopping spree SSE and Equinor teamed up to buy three UK electricity plants from Triton Power Co., and plan to use the sites to develop low-carbon projects. The £341 mln deal for the stations in northern England, southwest England, and Wales reflects the increasing drive among European energy companies to clean up their operations amid an accelerating shift to green power. Triton’s portfolio includes the 1.2GW Saltend gas-fired complex in east Yorkshire, which could be a customer for Equinor’s hydrogen project in the area, the companies said Tuesday in a statement. (Bloomberg)

You gotta keep ’em separated – The British government is working on a plan to prevent surging international gas prices from feeding into consumers’ electricity bills as the cost-of-living crisis prompts an overhaul of how energy charges are calculated. The current design of the electricity market, where gas-powered generation sets the price, was well-suited for the system 40 years ago, but no longer reflects the cost of producing electricity, Business Secretary Kwasi Kwarteng told a Parliament committee on Tuesday. Surging gas costs have prompted the UK to look at reforming so-called “marginal pricing,” where the most expensive megawatt needed to meet demand sets the power cost for all generation. The government needs to find ways to help cut energy bills for consumers, and reducing the influence of gas on power charges would help. One strategy could be to have a bifurcated market that separates renewable power generation from gas, Kwarteng said. Another would be to focus on the average cost across different power-generation technologies. While he didn’t give a date for when the government would produce a plan, Kwarteng said PM Boris Johnson’s administration is “trying to work at pace on this.” (Bloomberg)

Gulf pledge – Qatar Energy, the world’s biggest producer of liquefied natural gas (LNG), has joined a group of oil and gas companies aiming to cut almost all methane emissions from their operations by 2030, Business Times reports. The Qatari company has signed up to the Aiming for Zero Methane Emissions Initiative, which was founded in March and counts Saudi Aramco, BP, Chevron, and Shell among its members. While climate pledges have typically focused on limiting carbon dioxide emissions, attention is increasingly shifting to methane as it locks in far more heat in the short term and has been leaking just as relentlessly. Recently Qatar Energy signed a host of deals with energy majors to partner with, such as TotalEnergies and ExxonMobil, to expand the Gulf state’s LNG capacity from 77 to 126 mln tonnes per year by 2027.

The cost of it all The mobility of the Swiss population causes billions in environmental damage every year. According to the latest calculations by Switzerland’s Federal Office for Spatial Development (ARE) for 2019, the traffic caused crop losses equivalent to 233,000 tonnes of foodstuffs. In the country, traffic generates an average of 1,600 francs ($1,670) of so-called external costs per inhabitant. “These are the consequences of mobility that must be borne by the community or future generations. These costs amount to a total of 14 bln francs for 2019. The major part of these damages (9.8 bln francs) is attributable to motorised private traffic on the road,” the agency said. Air traffic and rail traffic also contribute to this. The damage caused by Swiss transport’s share of climate change is nearly 2.9 bln francs, while the value of habitats for flora and fauna that are lost or fragmented due to roads, railways, and airports amounts to an estimated 1.2 bln francs per year. For children, they suffer 39,300 days of asthma due to polluted air, while 17,500 years of life are lost due to diseases such as cardiovascular or respiratory diseases caused by traffic noise or air pollution.

ASIA PACIFIC

Climate commitment New Zealand bank T&G Global has signed the country’s first sustainability-linked loan in the horticulture sector – borrowing NZ$180 mln ($113 mln). The company said in an announcement that the three-year loan committed the bank to a science-based GHG emissions reduction target that aligns with limiting global warming to 1.5C. The loan requires T&G to undertake a comprehensive climate risk adaptation plan to enable the bank to adapt to the impacts of a changing climate, and create permanent job opportunities to boost regional development. The bank will pay lower loan costs if it achieves the sustainability targets. The targets are linked to three key performance indicators, which focus on climate change adaptation, mitigation, and boosting its permanent workforce. The KPIs also call for a reduction of Scope 1 and 2 GHG emissions by 2.5%/year.

Hydrogen research – Airbus will establish the Airbus China Research Center in Suzhou, east China’s Jiangsu Province, with a focus of hydrogen energy infrastructure development, CGTN reports. It will carry out research work on advanced technologies, such as hydrogen energy infrastructure, advanced manufacturing, and the aviation industry’s upgrading with digitalisation and intelligence. It is due to start operations in 2023. Airbus and the Suzhou Industrial Park signed a framework agreement on the establishment of the centre.

Thai net zero – Thai petroleum company Bangchak Group will pursue net Zero by 2050, the company stated in a press release. The company will drive the development of the low-carbon society with its BCP NET Plan, comprising 4 dimensions in order to achieve Net Zero by 2050, the press release stated, being breakthrough performance, conserving nature and society, proactive business growth and transition, and net zero ecosystems (Bangchak Group).

AMERICAS

Climate suit – Ontario’s Superior Court of Justice has granted intervener status to five Indigenous and environmental groups in a lawsuit against the provincial government arguing a lack of action on climate change has violated their rights. The groups won’t be allowed to present new evidence but will get to make presentations in court. Ontario Progressive Conservative government cancelled its cap-and-trade system in 2018 when shortly after taking power and recently won a re-election. (National Observer)

Familiarity in Washington – Environmental groups are criticising Washington state’s incoming cap-and-trade system for issues familiar in any compulsory carbon market. Carbon Washington as well as Front and Centered say the state’s legislation doesn’t go far enough because it permits oil refineries, pulp mills, and steel mills to pollute near current levels until 2035 and doesn’t regulate airplanes, ships, farms nor the military at all. (KUOW)

VOLUNTARY

Who’s Euronext? – Euronext, a market infrastructure firm, announced its science-based climate targets to reduce GHGs in alignment with the Paris Agreement, based on the framework provided by the SBTi. The targets support Euronext’s recently announced “Fit for 1.5” commitment to net zero and the company is expecting to obtain validation of the targets by the SBTi by the end of 2022. By 2030, Euronext will reduce its Scope 1 and Scope 2 market-based GHG emissions by 70% compared to 2020 and by 2030, the company will reduce its Scope 3 travel emissions by at least 46.2% compared to 2019, it said.

Blancco to zero – Software company Blancco Technology Group announced that it had achieved carbon neutral status for 2021, offsetting its carbon footprint through investment in two renewable wind energy projects in India. Blancco purchased 3,622 carbon credits, verified in line with the Verra’s VCS. The firm’s investment in the wind power projects will continue to offset Blancco’s Scope 1, 2 and 3 emissions.

SCIENCE & TECH

Methane madness – Methane emissions are sharply increasing despite a global consensus to crack down on the powerful global warming gas, according to new data from the French methane tracking firm Kayrros, Axios writes. The new report, based on satellite data, examines some of the biggest energy-producing regions in the world, including the US, Iraq, Kuwait, Algeria, Iran, and Turkmenistan. It found that major oil, gas and coal-producing basins, including the Permian in the US, have seen increases in methane emissions so far this year that exceed an uptick in energy production. The report found there was a 33% increase in methane emissions from the Permian Basin between the first quarter of 2022 and the previous quarter. Methane acts on much shorter timescales than CO2, and emissions cuts could reduce near-term warming. Its major sources include oil and gas drilling and infrastructure, landfills and agriculture. A coalition of more than 100 nations is taking part in the voluntary Global Methane Pledge, which looks to cut methane emissions by 30% by 2030.

AND FINALLY…

Release the drones – Fire seasons are now longer and the destruction more intense, as fires burn hotter and spread to more drought-stricken ground. Since the start of this year, 32,247 wildfires have burned over 3.3 mln acres in the US, according to the National Interagency Fire Center. An early start to the season, and an especially brutal beginning in New Mexico, puts 2022 on the path toward record fire destruction. Historically, fires would leave seeds in the soil and at treetops, but the hotter, more intense fires that occur now burn up the treetops and destroy the seeds in the soil, so there is much less natural regeneration. CNBC profiles DroneSeed, a Seattle-based startup that claims it can begin to restore thousands of acres of wildfire-ravaged land just 30 days after the fire is out. Carrying seeds – as well as seedlings from its own nurseries – its swarms of heavy-lift drone spread them across the scorched land. The drones drop the seeds in contained vessels, called pucks, where they then root and begin to grow into seedlings. These pucks are made out of plant fiber and contain nontoxic elements, such as spicy pepper, to deter rodents and other mammals. Not all of the seeds or seedlings result in trees, and DroneSeed said that seed establishment and growth rates vary at each project site, due to soil conditions, water quality, grade of the terrain, climate temperature, tree species and other factors. Each aircraft can plant three-quarters of an acre per flight, with the sale of offsets – for example to Shopify – helping to fund the company’s operations. DroneSeed is replanting 300 acres (121.4 ha) of forest in Oregon in a deal with the online firm to remove 50,000 tonnes of CO2 from the atmosphere.

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