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TOP STORY
PREVIEW: UN in race to re-establish grip on global carbon market
Officials meet later this month to craft a new UN carbon crediting mechanism, facing a race against time to attract capital and attention amid a fast-growing voluntary market while not repeating past mistakes.
AMERICAS
North Carolina targets 2024 linkage with RGGI programme
North Carolina Governor Roy Cooper’s (D) administration is aiming to have its proposed power sector cap-and-trade rulemaking take effect next year and join the US Northeast and Mid-Atlantic RGGI programme in 2024, according to a government presentation on Thursday.
Pennsylvania GOP asks court to reinstate RGGI regulation block amid appeal
Pennsylvania Republican legislators requested that a judge restore the preliminary injunction granted last week against the state’s RGGI-linked cap-and-trade regulation on Thursday, after an appeal of that ruling by Governor Tom Wolf’s (D) administration automatically lifted the ban.
Bahamas govt takes big ownership, revenue stake in firm appointed to manage country’s new carbon credit business
The Bahamas has appointed a company to manage the country’s carbon credit sales, with the government taking a 49% ownership share in the firm and up to 85% of the initial revenues.
Producers go long, speculators short on CCA and RGGI positions
Speculators saw their California Carbon Allowance (CCA) fall again this week following a short-lived rebound, while compliance entities’ positions roared back after an increasingly rare contraction last week, according to US Commodity Futures Trading Commission (CFTC) data published Friday.
ASIA PACIFIC
Chevron to purchase additional offsets to make up for Gorgon CCS shortfall
Chevron will have to continue to invest in carbon credits after its Gorgon LNG CCS facility in Western Australia has continued to fall short of its CO2 injection targets.
AU Market: ACCU spot price slips as market malaise takes hold
Australian Carbon Credit Unit spot prices have hit a downward slump in recent weeks, as traders and analysts highlight policy uncertainty in the market.
Australian-backed blue carbon fund seeks new proposals
An Australian-led fund has put the call out for proposals aiming to support blue carbon ecosystem restoration and conservation projects in the Indo-Pacific.
Indonesia eyes steady revenue from surplus carbon credit sales
Indonesia expects to meet its 2030 goal under the Paris Agreement while at the same time earning over $170 million annually this decade from the sale of forestry carbon credits from emissions cuts that go beyond its NDC pledge.
CN Markets: Low prices and volume as participants sit on the fence
Both price and volume dropped in China’s carbon market over the past week, though regulators sparked some hope with traders that the ETS might be strengthened this year after revealing plans to legislate the market trading regulations.
China’s thermal power generation falls in June despite overall uptick in power demand, as GDP misses forecast
China saw its domestic thermal power generation decline last month, while its gross domestic product (GDP) growth stalled in the April to June quarter.
Mitsui subsidiary launches Japan’s first marketplace for international offsets
Both price and volume dropped in China’s carbon market over the past week, though regulators sparked some hope with traders that the ETS might be strengthened this year after revealing plans to legislate the market trading regulations.
Indigenous Carbon Industry Network founder dies
The director and founding member of the Indigenous Carbon Industry Network Steering Committee, W Rioli, has died.
EMEA
Euro Markets: EUAs post 3% weekly gain but remain firmly rangebound amid growing gas concerns
EUAs posted their biggest weekly gain since the start of June even as the market remained firmly within the €82-86 channel that has been in place for two months, while energy markets retreated as European regulators urged more demand-reducing measures to conserve gas supplies ahead of winter and a major utility began withdrawing gas from storage.
Slovakian aluminium plant announces production halt, lay-offs, placing some blame on high EU carbon prices
Slovakia’s only aluminium plant is at risk of closure after this week announcing lay-offs and a halt to production, with company placing some blame on high carbon costs.
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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
AMERICAS
Let’s check in again with Lucy and that football – Late Thursday, US Senator Joe Manchin (D) effectively killed any chance of major climate-related provisions making their way into Democrats’ reconciliation package – the perpetually stalled $1.7 trillion Build Back Better act (BBB). The West Virginian told party leaders that “he would not support an economic package that contains new spending on climate change or includes new tax increases targeting wealthy Americans or corporations,” WaPo was first to report, “marking a massive setback for party lawmakers who had hoped to advance a central element of their agenda before the midterm elections this fall.” Manchin, chair of the Senate Energy and Natural Resources Committee, said his rationale for opposing what has been referred to as a “mini-BBB” comported with that for his original opposition: inflation. On July 13, the Bureau of Labor Statistics reported that the CPI for June was 9.1% above year-ago levels, with energy accounting for more than half of the month-on-month change. Manchin responded by releasing a statement that “we cannot add any more fuel to this inflation fire”. But then on Friday, his tune was reportedly a little different, telling a radio host “I guess [my fellow Democrats are trying] to put pressure on me, but they’ve been doing that for over a year now. It doesn’t make any sense at all. As far as I’m concerned, I want climate, I want an energy policy.” Politico reported that Senate Majority Leader Chuck Schumer (D) also offered Manchin an energy deal that didn’t include the tax increases that the centrist is worried about, like corporate taxes, but Manchin rejected that as well. “Now, the question becomes: Is the damage already done — and have Democrats run out of patience and grace for Manchin?” Furious and defeated Democratic lawmakers are now calling on Biden to do something. “With legislative climate options now closed, it’s now time for executive Beast Mode,” Sen. Sheldon Whitehouse (D) tweeted. Even Sen. Brian Schatz (D), who has shied away from delegating climate action to Biden, said the time has come.
EMEA
Hydrogen for all – The European Commission on Friday waved through a record €5.4 bln in hydrogen subsidies even as questions are being raised over the opaque approval process and the nascent technology’s potential to reduce greenhouse gas emissions in polluting industries, Politico reported. The subsidies exceed previous large-scale cross-border projects, including the €3.2 bln the Commission approved for a 2019 batteries project. Friday’s state aid decision kicks off 41 projects in 15 countries centered around hydrogen technology, in what is only the first of four expected waves of state aid approvals for hydrogen projects in the European Union. Further waves on industry decarbonisation, infrastructure, and mobility are expected to follow, with billions in additional subsidies.
Saving industry – Germany’s energy-intensive industries, hard-hit by record prices and over-dependence on Russian gas, will receive €5 bln worth of subsidies after the EU’s competition authority gave its green light to the scheme, EurActiv reports. Energy-intensive industries like steel and chemicals have buckled under high electricity and gas prices in recent months, leading to a downturn in production and fuelling worries about Germany’s competitiveness. “This €5 bln scheme will enable Germany to mitigate the impact of the rising input costs on these companies and support the continuation of their activities in this difficult context,” EU competition chief Margrethe Vestager said on Thursday. The scheme will see Berlin disburse direct grants to compensate additional costs incurred as a consequence of electricity and gas price spikes.
Too Sunak? – Conservative leadership contender Rishi Sunak privately lobbied to impose a green levy on petrol and diesel when he was Chancellor of the Exchequer, a plan critics said would have led to higher prices at UK pumps, Bloomberg reports. In government-level discussions one year ago – before prices began an inexorable rise – Sunak proposed a fossil fuels emissions trading scheme to put a price on pollution from road transportation, as well as shipping, building heating, and diesel trains, which together make up more than 40% of UK carbon emissions. According to three people familiar with the matter, the proposal was drawn up by the UK treasury and submitted to the prime minister’s office but was rejected after opposition from other government ministers. A spokesperson for Sunak said the proposal was part of the government’s work to make the country greener, and was ultimately not adopted. The UK is expected to keep its net zero goal by 2050 but the new leader may slow near-term progress, Carbon Pulse recently reported.
Saudi Arabia’s good deal – Saudi Arabia, the world’s largest oil exporter, more than doubled the amount of Russian fuel oil it imported in the second quarter to feed power stations to meet summer cooling demand and free up the Kingdom’s own crude for export, data showed and traders said, EurActiv reported. Russia has been selling fuel at discounted prices after international sanctions over its invasion of Ukraine left it with fewer buyers. The increased sales of fuel oil, used in power generation, to Saudi Arabia show the challenge that US President Joe Biden faces as his administration seeks to isolate Russia and cut its energy export revenues.
ASIA PACIFIC
Adding to the tally – A Japanese oil and gas firm has agreed to supply so-called “carbon neutral” LNG to Sakata Natural Gas, which includes Sakata buying carbon credit-backed LNG from Inpex to be used to fuel its headquarters and operational facilities. Inpex is one of the main proponents for such activities in Japan, and has entered into previous similar deals with LNG producers and retailers. The company sources most of its offsets from the Indonesian Rimba Raya REDD+ project.
Fly light – A subsidiary of state-owned China National Aviation Fuel Group, the country’s largest aviation fuel supplier by revenue, has teamed up with two Beijing-based companies to promote the development of carbon neutral airports, according to the companies’ statement. Under the agreement, the three companies will also work together to introduce low carbon technologies in the aviation sector and explore opportunities in domestic carbon markets. The announcement came after another aviation conglomerate, AVIC Industry and Finance Holdings, recently established a carbon asset management firm.
VOLUNTARY
Building ecosystem – Toucan Protocol, which tokenises VCM carbon credits and makes them available on blockchain, has entered into an agreement with Tableland to provide it with Nature-based Carbon Tonnes (NCTs). Tableland is a tech firm providing solutions for companies that build games and other platforms on web 3, including minting various non-fungible tokens (NFTs). Toucan will initially provide it with NCTs to offset emissions associated with the NFTs, but that may be expanded in the future to all of Tableland’s activities.
SCIENCE & TECH
Don’t rule it out yet – Stepping back from the immediate extremes in Europe, China and elsewhere, 2022’s on track to be a very warm year globally, Axios writes. NOAA’s latest monthly report finds a 99% chance that 2022 will rank among the 10 warmest in records dating back to the late 1800s, but it sees only an 11% chance of a top 5 ranking. “La Nina years tend to be cooler than average, making it much less likely to set record or near-record temperatures,” Penn State climate scientist Michael Mann told the news outlet. “But you never know,” he adds. “The fact is that the warming trend is so dominant now that even La Nina years can set near-record temperatures. So I wouldn’t rule 2022 out just yet.”
AND FINALLY…
Digesters are cool, but manure-eating worms are cooler – With 6,000 dairy cows, 5,000 beef cattle, and thousands of tonnes of apples, potatoes, and cherries produced annually, Royal Dairy in Royal City, Washington, uses hundreds of millions of gallons of water per year. Once used, that water carries animal waste, pathogens, and environmentally harmful chemicals like nitrate, which can contaminate groundwater and contribute to GHG emissions. To prevent that, Royal Dairy cleans and reuses its water more than 10 times before the water leaves the farm. The dairy has also cut its nitrate pollution and lowered its greenhouse gas emissions, all thanks to a new kind of wastewater filtration system powered by worms. Every day, half a million gallons of farm wastewater is pumped through a gigantic bed of earthworms. Wiggling in wood chips and sawdust, they feast on the liquid manure and wastewater, removing nutrients and harmful chemicals from the stream. The water then percolates through a layer of crushed rock, collects at the bottom of the worm bed, and travels out an exit pipe for re-use. Royal Dairy is one of two dairy farms in the US currently using such a system, called a vermifiltration system, to manage wastewater. The system, installed by BioFiltro, could be one solution to agricultural pollution problems, especially as states require dairies to implement better water management plans and eliminate nitrate from their wastewater. As such, vermifiltration may be a possible alternative to manure digesters – controversial technologies that capture methane produced by manure ponds, then sell that methane as a fuel source. In contrast, vermifiltration prevents that methane from ever existing in the first place. Royal Diary estimates the cost of BioFiltro’s system at about $25 to $30 per acre, which is not even “in the same arena” of what it would cost to build a digester. And with the clean water the farm is able to reuse, the carbon credits it generates, and the soil additives the system produces, Royal Dairy said vermifiltration system has a “pretty good” return on investment. (Inside Climate News)
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