CP Daily: Thursday July 28, 2022

Published 23:42 on July 28, 2022  /  Last updated at 23:42 on July 28, 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 body agrees crediting fee structure for new carbon market mechanism

The appointed body overseeing the UN’s new carbon crediting mechanism met for the first time this week, agreeing a fee structure and to meet again twice before November’s COP27 UN climate talks to keep pace with its aim of having the system ready by the end of 2023.

AMERICAS

Rejigged US climate bill draws fierce criticism on fossil fuel leasing, support for other measures

Provisions to link federal wind and solar energy development to oil and gas leasing in the revamped US budget reconciliation package garnered heavy criticism from some environmental organisations on Thursday, though other green groups were supportive of the package’s methane fee and clean energy tax credits.

NA Markets: CCAs rebound alongside broader market sentiment, Pennsylvania uncertainty weighs on RGAs

Both California Carbon Allowance (CCA) and RGGI Allowance (RGA) prices tracked broader market sentiment this week, rebounding towards the latter part of the period, while the status of Pennsylvania’s Q3 auction volumes remained unresolved.

California’s ARB sticking with 2045 CO2 neutrality goal following Newsom letter

California Governor Gavin Newsom’s (D) request to beef up the stringency of the 2022 Scoping Plan will not affect the state’s existing target for 2045 carbon neutrality, a spokesperson for regulator ARB told Carbon Pulse.

California fossil gas generation hits 5-yr high as total power demand rises

California electricity consumption in 2021 bounced back from a slight hit taken during the onset of the COVID-19 pandemic, with fossil gas generation increasing further amid a continued dearth of zero-carbon hydroelectric generation, according to state figures.

VOLUNTARY

VCM prices and liquidity both crunch lower, CBL data shows

Prices and liquidity on the CBL platform slid in the second quarter as the impact of the global economic slowdown amid rampant inflation took its toll on the voluntary carbon market, Xpansiv CBL revealed on Thursday.

Forestry-obsessed VCM market is missing the point, warns Africa’s largest project originator

Investors are too focussed on nature-based carbon projects, particularly forestry, in Africa, the largest project originator on the continent warned after releasing interim results on Thursday.

Crypto community band together in effort to stop oil drilling in DRC

Parts of the crypto community have bandied together to form a special action DAO to try to crowdfund cash to bid in auctions for oil exploration and drilling rights in the Democratic Republic of Congo (DRC).

Canadian VER investor expects issuance of 20 mln carbon credits by 2027

A Toronto-based VER investment firm on Thursday estimated its growing project portfolio will cross the 20-million credit mark by 2027, as the company also disclosed recent funding commitments and project milestones.

Research warns against relying on blue carbon projects for carbon accounting

A new study has cast fresh doubts on the reliability of blue carbon projects being able to predictably sequester large amounts of carbon, while stressing marine ecosystems need to be protected and restored as part of climate mitigation efforts.

ASIA PACIFIC

Tired of waiting, Chinese firms begin placing bets on future CCERs

A growing number of Chinese companies are making long-term commitments on new CCER project development and transactions, despite a complete lack of clarity on when the programme might restart and which methodologies might be eligible if and when it does.

China quietly removes ETS chief from post

China has quietly replaced the environment ministry official in charge of the nation’s emissions trading scheme, sources have confirmed, as the challenges facing the programme continue to build.

EMEA

Euro Markets: EUAs post 3.5% gain amid short squeeze as market eyes annual auction volume cut

EUA prices rallied throughout Thursday amid what traders described as a short squeeze in a thin market an anticipation of the annual halving of auction volumes in August, while energy prices edged lower as Russia said a key component of the Nord Stream pipeline could be delivered soon.

European soil carbon firm targets global rollout after UK acquisition

A European soil carbon crediting company is planning to expand to the Americas and Australia after acquiring a British-based emissions auditing specialist.

SHIPPING

Dubai tanker firm signs up to new offsetting platform designed for marine players

Dubai-based tanker operator and oil product trader Oilmar has teamed up with a Norwegian start-up, ESG-NRG, to complete a deal involving the first use of a new carbon offsetting marketplace that is specifically designed for use in the marine sector.

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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

EMEA

Warsaw warns – Polish Prime Minister Mateusz Morawiecki said late on Thursday that a possible decision on a compulsory reduction in gas consumption in the EU must be made unanimously, not by a qualified majority vote. Under the plan the cuts could be made binding in a supply emergency, provided a majority of EU countries agree. Hungary was the only country that opposed the plan, two EU officials said. Poland had said it was against binding cuts, and on Thursday Morawiecki told private broadcaster Polsat News that he wanted to have the possibility to veto such a decision. (Reuters)

Farming in focus – The Ireland government’s decision after days of internal wrangling to demand a 25% cut in GHG emissions  from the agriculture sector by 2030 has criticised by farming, environmental and business groups. But senior Coalition figures were optimistic that the compromise reached on Thursday would gain grudging acceptance, with several interest groups stopping short of rejecting the plan outright. Ministers offered special treatment to the sector because of its importance to rural Ireland and food production. They insisted that any measures asked of farmers would be voluntary and incentivised rather than mandated, though senior government sources said that inevitably the size of the national dairy herd would be reduced. Considerably larger cuts are being sought from other areas, including a 75% cut from electricity, 50% from transport, 45% from commercial and public buildings, 40% from residential buildings and 35% from industry. However, the total of all sectors’ emission cuts will not achieve the 51% reduction set down in law. Instead, 26 mln tonnes of CO2 reductions are “unallocated” between 2026-30, meaning further measures will be required to achieve them. It is expected that technological breakthroughs in the coming years will help to make up the shortfall. (The Irish Times)

Fill up the tank – Germany’s gas storage levels could reach 90% by Nov. 1, even under the scenario where flows from Russia through the crucial Nord Stream pipeline remain curbed, the association of gas storage system operators in Germany INES said. The calculations are based on the assumption that LNG imports remain high and gas transport through the Nord Stream 1 Baltic Sea pipeline continues at only 20% of its maximum capacity. If supply through the pipeline were to halt fully, the situation would have to be further assessed, said INES head Sebastian Bleschke. He said that even with storage levels above 90%, less gas than is usually needed would be available during winter if Nord Stream flows remain at today’s level. (Clean Energy Wire)

Pumping heat – The UK government has awarded more than £54 mln to innovative heat network projects in England. Funding announced on July 29 will support the development of schemes in and around London that use low-carbon heat sources such as heat pumps and energy from waste to warm properties. The move will mean home and business owners can ditch boilers fuelled by more costly oil and gas, helping reduce energy bills and boost the country’s energy independence. The cash injection will enable the projects to develop and complete construction of the networks providing energy to households and commercial sites including shops, offices, and public buildings. Almost £28 mln will fund two innovative heat network projects in London, with nearly £17 mln going to a project in Bedfordshire and a further £9 mln for one in nearby Woking.

Claim critique – The OECD has said it’s reviewing an allegation from environmental campaigners Forest Litigation Collaborative that UK power generator Drax’s claim that it produces “carbon-neutral” electricity from burning biomass is wrong. Such criticism could be particularly embarrassing for a company that describes itself as the UK’s largest source of renewable energy. The campaign group alleges that several statements on Drax’s website relating to its use of biomass are misleading and violate OECD guidelines on responsible business conduct. The UK government said last year that biomass energy and carbon capture are key components of its plan to reach net-zero emissions by 2030. But the role of wood-based biomass in tackling climate change has long been controversial as multiple academic reports have concluded that felling trees for energy releases CO2 into the air much faster than the next generation of trees can absorb it. (Bloomberg)

EV for Iberia – Spanish energy giant Iberdrola and British oil firm BP have inked an agreement to jointly invest billions of euros in expanding EV charging infrastructure and green hydrogen production across the UK and multiple countries in Europe. The firms said they planned to jointly invest up to €1 bln towards deploying up to 11,000 fast EV charge points across Spain and Portugal, whilst also working together to develop large-scale green hydrogen production across the two countries as well as the UK that would in total amount to around 600,000 tonnes capacity per year. (BusinessGreen)

ASIA PACIFIC

Oil to green – India’s state-run ONGC said that it has signed a two-year Memorandum of Understanding (MoU) with Greenko ZeroC (Greenko) to jointly pursue opportunities in renewables, green hydrogen, green ammonia, and other derivatives of green hydrogen, Hindubusinessline reports. Meanwhile Egypt has signed an MoU with an Indian company to build a green hydrogen plant at a cost of $8 bln, Reuters reports.

Gonna give 100% – Japanese shipping company NYK and subsidiary Shin-Nippon Kaiyosha have started a test navigation using Neste renewable diesel supplied by Itochu Enex in tugboats operated by Shin-Nippon Kaiyosha. This is the first case in Japan of a 100% concentration of biodiesel being used in a ship, according to a press release from NYK.

Lighter footprint – The Monetary Authority of Singapore (MAS) expects to cut the emissions intensity of its equities investments by up to 50% by financial year 2030, as it continues to work towards its goal of a climate-resilient reserves portfolio, Channel News Asia reports. Measures to achieve that include the roll-out of a “portfolio overlay” by next year that would gradually tilt the equities portfolio towards less carbon-intensive investments, it said in its second sustainability report released on Thursday.

Up for review – Western Australia’s EPA has released new guidance on its GHG emission regulations for public consultation. The Environmental Factor Guideline is designed to communicate how GHG emissions are considered as part of its environmental impact assessment process, a pertinent issue due to the large number of oil and gas projects in the state. The key proposed changes include strengthening the language of the guidelines, including that proponents must minimise risk of environmental harm associated with climate change by reducing GHG emissions as far as practicable. The draft states that proposals will now be consider if a project exceeds 100,000 tCO2e of Scope 2 emissions in any year, compared to only previously assessing 100,000 tCO2e of Scope 1 emissions. The guidelines also state that proposals should not be separated into different referrals to avoid consideration of GHG emissions. The EPA said its view is that there should be ‘deep and substantial’ reductions in WA’s emissions this decade. The revised draft guideline will be available for public consultation until Sep. 21.

AMERICAS

Off Broadway, offshore – New York State’s energy authority is soliciting for another offshore wind project, this one slated at a minimum of 2 GW. The state would invest $500 mln in offshore wind ports, manufacturing and infrastructure. There are currently five offshore wind projects which total 4.3 GW in New York and the state has a goal of reach 9 GW by 2035. (Utility Dive)

AND FINALLY…

Aircon cash – Sustainable air conditioning company Blue Frontier on Thursday announced it has raised a $20 mln Series A equity investment led by Gates-founded Breakthrough Energy Ventures, 2150 Urban Tech Sustainability Fund and VoLo Earth Ventures. In a press release, the company said the Series A financing will accelerate Blue Frontier’s ability to bring its product to market, thereby helping to propel the company towards its goal of creating gigaton reductions in GHG emissions by decarbonising building cooling. Blue Frontier said its AC system reduces electricity use by up to 90% by combining dew-point-style sensible cooling with liquid desiccant dehumidification. The desiccant is recharged and stored when electricity is the cleanest or lowest cost, and later used to deliver cooling when electricity is dirty or costly.

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