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New Zealand’s Climate Change Commission has recommended sweeping changes to the settings of the country’s ETS, sending the NZU spot price up by 11%.
Conservative Democratic Senator Joe Manchin (D) on Wednesday announced he had forged a deal with Senate Majority Leader Chuck Schumer to resurrect efforts to pass climate-oriented legislation through budget reconciliation, though the coal state lawmaker’s proposal emphasises the continued support of fossil fuels.
The Canadian federal government’s two proposed options to assign a carbon pricing mechanism to its oil and gas sector are dividing opinion among experts on the likelihood of the outcome and which option is the easiest to implement.
California regulator ARB this week doled out the largest number of compliance offsets since April, according to government data published Wednesday, while a decline in WCI allowance prices has tightened the discount of offset values.
A municipality in Canada’s province of British Columbia (BC) has acquired a windfall from the sale of low carbon credits to a Canadian commodity marketer, according to a statement released Wednesday.
The Vietnamese government has signed a decree to dramatically ramp up its climate and energy initiatives that would result in an emissions reduction cut of 43.5% below business-as-usual levels in 2030, on the way to net zero by 2050, a far more ambitious target than outlined in its NDC.
China’s highest court has recommended complementing current regulations concerning the activities in carbon markets, in a move backing long-awaited legislation for the country’s national emissions trading scheme (ETS).
The roll-out of China’s national carbon emission trading scheme (ETS) is unlikely to push up near-term cost levels for thermal power plants, though compliance costs could increase in the long run, according to a report by rating agency Fitch.
Australia’s Clean Energy Regulator has issued around 1.2 million new Australian Carbon Credit Units (ACCUs) to carbon projects, as the Labor Party government on Wednesday introduced its Climate Change Bill to the House of Representatives.
Big Australian bank Westpac outlined on Wednesday new and updated emissions targets to be reached by 2030 for its lending portfolio and has stated that it plans to review the role that carbon offsets can play in the future to meet its longer-term decarbonisation objectives.
Greece’s prime minister has sent a letter to the European Commission proposing an EU-wide mechanism to compensate industry for reducing their gas and electricity use for the coming winter.
Utility Iberdrola posted on Wednesday a strong rise in gas-fired generation to send its ETS-covered output rising by more than one fifth year-on-year in H1, while hydro generation in Spain slumped some 52% due to drought across the country.
EUAs returned to the downside suffering a 0.7% loss as a surge in gas prices across the afternoon added pressure to Dec-22s amid fears of further demand destruction and potential margin calls across industrial participants to cope with the soaring cost of production.
A proposal to remove VAT from Britain’s household energy bills, as pledged by former Chancellor and prime ministerial candidate Rishi Sunak, could end up supporting UK carbon allowance prices, a think-tank has said.
Complex issues have already been raised on the first day of consultations on the Integrity Council (IC) draft requirements to define robust carbon credits in the voluntary carbon market (VCM), with ICVCM chair Annette Nazareth elaborating on the quasi-regulatory nature of the group.
The deteriorating global economic outlook has split the voluntary carbon market (VCM), with a top half seeking to trade and retire more expensive nature-based solutions and a bottom half seeking out cheaper and older vintages, according to analysts.
The grade of a high-yielding VCS-accredited pipeline gas leak offset project was downgraded by a ratings agency this week.
The use of direct air capture with CCS, or DACCS, would reduce the total cost of decarbonisation in meeting global climate goals in a long term scenario where deploying the technology at scale is low cost, while also making it more likely that net zero emissions can be reached, according to a report released this week.
A coalition comprising of over 40 industry, government, academic, and non-profit group participants has formed the Nuclear Hydrogen Initiative, a body that will seek to advance the role of hydrogen sourced from nuclear power as a climate change mitigation solution.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Stay the course – The IMF’s new global economic outlook is a harrowing tour of big, overlapping energy and climate risks, Axios writes. The institution sees global economic growth slowing way down in 2022-23, and warns the world may soon teeter on the edge of recession. A few more takeaways from the report:
1. Energy prices have been among the major drivers of wider inflation, alongside higher food prices, which are also driven up partly by high energy input costs.
2. IMF is urging countries not to lose climate focus. The report warns that curbing emissions demands “urgent” multilateral action and that: “The war in Ukraine and soaring energy prices have put pressure on governments to turn to fossil fuels such as coal as a stopgap measure … Policymakers and regulators should make sure that any such measures are temporary and cover only energy shortfalls—and do not increase emissions overall.”
3. Russia’s energy weapon looms large. IMF’s analysis includes a “plausible” scenario in which global growth slows even more than their baseline forecast — and a worsening energy crisis would be a key reason why. “A complete cessation of exports of Russian gas to European economies in 2022 would significantly increase inflation worldwide through higher energy prices … In Europe, it could force energy rationing, affecting major industrial sectors, and sharply reduce growth in the euro area in 2022 and 2023, with negative cross-border spillovers.”
4. Global “fragmentation” could hurt climate efforts. One downside risk is the war contributing to a splintering of the global economy. The IMF warns of the potential for splintering into geopolitical blocs with different tech standards, cross-border payment systems, reserve currencies and more. “Fragmentation may also diminish the effectiveness of multilateral cooperation to address climate change, with the further risk that the current food crisis could become the norm,” it states.
5. Energy and food price spikes are a conflict risk. The IMF notes the link between prices and “social stability” means that “further barriers to trade, or a poor harvest due to extreme heat and fertilizer shortages, risk causing further hardship, famine, or unrest.”
Climate pullback – The world’s largest asset manager, BlackRock, says climate-related and social shareholder proposals are becoming too prescriptive at US firms. Its support for shareholder environmental and social proposals has fallen significantly in the US, voting in favour of less than a quarter of proposals over the past year, according to its latest proxy voting report, down from 43% a year earlier. Given the number of sustainability-focused proposals put forward by shareholders at BlackRock-managed companies rose by 133% over the period, it means the number the investor backed fell from 81 proposals last proxy season, to just 71 this year, the report reveals. (BusinessGreen)
Default option – Ukraine’s Naftogaz has become the first Ukrainian government entity to default since the start of the Russian invasion, after the state energy firm said it would not make payments on international bonds before the July 26 expiry of a grace period. The default may accelerate repayments on the two other Naftogaz bonds, but does not trigger a sovereign cross-default. The energy company said in a statement that it had failed to get creditors’ support on a proposal to freeze payments on some of its bonds for two years, which it launched on July 12 saying Russia’s invasion meant many of its customers were now unable to pay their bills. The proposal failure meant that to stay current, it would have had to pay $335 mln in principal plus interest on its 2022 issue, as well as a separate interest instalment on a 2024 bond, before the end of the day. (EurActiv)
New nuclear policy? – Germany should rethink its approach towards domestic fossil fuels and nuclear energy as prices rise and the country is facing potential shortages, fuelled by the consequences of Russia’s war against Ukraine, said finance minister Christian Lindner. “Both on nuclear energy and on domestic oil and gas resources, we should come up with a new strategy for the mid-term,” said Lindner during a press conference in Berlin. Lindner called for a non-ideological discussion about European gas and oil reserves, the use of which he said was long considered to be not economically viable. With rising prices these could be competitive now and help counter possible shortages, said Lindner. The minister from the pro-business Free Democratic Party (FDP) also said he was open to a prolonged use of nuclear power in Germany. As power use would likely increase in the coming years – even more so in the current crisis which would mean that more people will heat their homes with electricity – the debate should not be about prolonging nuclear plants for only several months. Germany currently aims to shut down its last three nuclear plants at the end of this year, but the debate about prolonging their use has gained new momentum as worries about a gas shortage have increased in recent days, due to Russia cutting deliveries further. The extent to which nuclear power could help in the current crisis is heatedly debated, as only a small share of gas is used in power production, while most is used for heating buildings and in industry, and flexible gas power plants are often only used to provide electricity during certain peak demand periods – a function nuclear plants could not fulfil. (Clean Energy Wire)
Hey big spender – The German government plans to spend €177.5 bln of the federal budget for climate action, and the transformation of the country’s economy, from 2023 to 2026. The cabinet adopted its draft finance plan for the so-called “Climate and Transformation Fund”, which is part of the federal budget. The majority of funds will contribute to support for climate-friendly building renovation (€56.3 bln), but the plan also includes support programmes for sectors like transport (e.g. e-mobility charging infrastructure) and industry, as well as to lower power prices. Germany has abolished the renewables levy consumers used to pay with their power bills to help finance expansion of wind and solar power. Instead, the support will now be covered through the federal budget. The draft plan must now be debated in parliament. (Clean Energy Wire)
Coal delusions – The executive director of South Africa’s Presidential Commission on Climate Change Crispian Olver has called the country’s coal industry “delusional”, saying the market for the fossil fuel is going to dwindle rapidly in the next decade. South African President Cyril Ramaphosa on Monday made fresh pledges to tackle the country’s worst-ever power crisis, promising to expand power generation, slash red tape, and boost renewable energy procurement. Coal company executives said they were not climate deniers but pointed out that renewable energy was not a silver bullet. Olver said the commission wanted to work with the coal industry to manage a “just transition” that would ensure alternative jobs are created in coal-dependent areas. (Reuters)
Hunutlu hoodoo – The $2.17 bln Hunutlu coal power plant is the largest foreign direct investment in Turkey by China, billed by its developers and Turkish officials as part of Beijing’s Belt and Road Initiative that is building political and economic influence across Eurasia, the Middle East, and Africa. But it has been fiercely opposed by climate change campaigners and ecologists who argue that it will damage wildlife and pump carcinogens into the air — as well as undermining president Recep Tayyip Erdogan’s decision to ratify the Paris Agreement on climate change last year. Yet despite the efforts of campaigners and several pending legal challenges, the first of 1,320 MW Hunutlu’s two power generation units became operational last month with the second due in the autumn. (FT)
Gwad-bye – Pakistan’s Ministry of Energy has cancelled approvals for the proposed 300MW Gwadar coal plant and wants a solar farm established at the site. The Pakistan government first mooted the project in 2014 as an imported coal project to be funded through the China-Pakistan Economic Corridor (CPEC) program. The project was subsequently approved and land for the plant was purchased but financial support was unresolved. The spike in international fuel prices, including coal, has cost US$20 bln in the 11 months to the end of May. The government has also signalled it wants to convert the new 1320MW Port Qasim plant, 1320MW Sahiwal power plant, and 1320MW Hub plant from using imported coal to domestic brown coal from Thar province. (CoalWire)
Adani vs. the press – The Adani Group has launched a criminal defamation lawsuit against Indian freelance journalist Ravi Nair who has written investigative articles about the connections between the Modi Government and the company. Nair said that he was not given a copy of the complaint before being served with an arrest warrant by New Delhi police and is unsure what article or social media post triggered Adani’s action. Nair is scheduled to appear before a trial court later this month in Gujarat, where Adani is headquartered. (CoalWire)
Keep on truckin’ – A roadmap to zero-emission trucks reaching 30% of in class vehicle sales by 2030 and 100% of sales before 2050 was signed by 17 US states, the District of Columbia, and Quebec on Wednesday. Medium and heavy-duty trucks only make up 4% of all vehicles on the road, but are responsible for over 25% of emissions from the transportation sector in the US. Clean trucks regulations, nitrogen oxide engine regulations, investing in infrastructure, and providing incentives were part of the commitment.
SCIENCE & TECH
Front of the Kew – The UK’s Royal Botanic Gardens at Kew has secured an investment of up to £100 mln from Greensphere Capital to help commercialise its research into climate change-resistant crops, zero-carbon fertiliser, and plant- and cell-based meat and dairy products. Alongside sustainable agriculture, the investment will help pay for extra researchers to look into botanical and fungal sciences, restoration of habitats, agriculture and forestry, with the ultimate goal of turning some projects into companies. Greensphere’s investment will initially be used to hire about 20 new researchers, with the goal of developing up to 10 companies. (Guardian)
Ad astra – James Lovelock, the scientist who was best known for his Gaia theory that the Earth is a self-regulating community of organisms, has died on his 103rd birthday at home surrounded by loved ones, his family said. One of the UK’s most respected independent scientists, he said two years ago that he and the biosphere were in the last 1% of its life. Lovelock spent his life advocating for climate measures, starting decades before many others to take notice of the crisis. By the time he died, he did not believe there was hope of avoiding some of the worst impacts of the climate crisis. His Gaia theory laid the foundations for Earth system science and a new understanding of the interplay between life, clouds, rocks, and the atmosphere. He also warned of the dangers humanity posed to the extraordinary web of relations that make Earth uniquely alive in our universe. (Guardian)
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