CP Daily: Tuesday August 16, 2022

Published 23:02 on August 16, 2022  /  Last updated at 23:02 on August 16, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

PREVIEW: Q3 WCI auction pits California climate proposal against weaker financial interest

Traders have identified a roughly $2 range as to where the August WCI current vintage allowance auction will likely settle on Wednesday, with bullish market sentiment stemming from California Governor Gavin Newsom’s (D) ambitious climate plan running up against lighter speculator participation and a recent secondary market price leap.

EMEA

Euro Markets: EUAs hit new three-month high, UKAs set new record as energy markets boil over

EUAs rose to another three-month high on Tuesday as energy prices continued to set records, with German cal-23 baseload power trading above €500/MWh for the first time amid widespread concerns that Europe may experience blackouts this winter as fuel supplies fall short of demand.

EU’s GHG emissions hold below pre-pandemic levels in Q1 -Eurostat

The EU’s total GHG emissions rose 6% year-on-year in Q1 but held below levels seen before the coronavirus pandemic, the bloc’s statistics office said in an update on Tuesday.

VOLUNTARY

Verra-approved dynamic baseline forestry methodology aims to deflate hot air criticism

Thousands of owners of small forestry plots in the US could be enrolled into carbon markets with the launch of a dynamic baseline methodology for calculating emissions that could be later rolled out to more than 100 countries globally, and help end the criticism of hot air, its proponents claim.

Offset standard Verra releases biochar methodology

Offset standards body Verra published its VCS methodology for biochar Tuesday, outlining how emissions removals will be calculated using the increasingly popular carbon credit technique.

ICE settles 2026 to 2030 vintage future for nature credits above $24

Hedging emissions with vintage 2026 to 2030 nature-based offsets will cost more than $24 a tonne on exchange ICE, which launched ten new voluntary carbon market (VCM) futures this week.

AirCarbon Exchange ties up with market surveillance platform

Singapore-based voluntary carbon trading platform AirCarbon Exchange (ACX) has teamed up with trade surveillance provider Eventus to monitor market activities in a bid to prevent activities like market manipulation or money laundering.

Offset ratings firm puts Indian renewables project ‘on watch’

A carbon credit rating agency has put a high-yielding Verra-certified Indian renewables project on ‘on watch’ for a potential change in its grading after getting new information about the activity.

Blue carbon needs broader access to carbon markets, finance, to unlock potential -study

Blue carbon ecosystems (BCEs) have significant potential for carbon sequestration globally, but to date this has been untapped due to constraints preventing a bigger role in the rapidly growing carbon market and other financial barriers, according to a study released this week.

ASIA PACIFIC

Guangdong forestry revision signals greater weight on data quality, property rights

The government of Guangdong province in China has updated its methodology for carbon sinks from the forestry sector in a move observers say might signal a potential shift in the regulatory mindset to put more weight on issues like data quality.

Carbon markets could recoup Black Summer fires recovery costs for Australia, scientists say

Australian scientists have quantified the carbon market opportunity of restoring the ecosystems and landscapes that were damaged during the 2019, 2020 Black Summer bushfires.

AU Market: ACCU price sags in low-volume environment

The Australian carbon market has seen a drop in spot prices this week, with sentiment and individual transactions driving price movements rather than fundamentals or regulatory news.

Malaysian state of Sabah to develop carbon market law within a year -media

Malaysia’s Sabah state plans to develop legislation to introduce a carbon market within the next twelve months, according to local media reports.

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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

Nuke move – Germany plans to postpone the closure of the country’s last three nuclear power plants beyond this year as it braces for a possible shortage of energy this winter after Russia throttled gas supplies to the country, the Wall Street Journal reported, citing three anonymous senior government officials. The decision has yet to be formally adopted by German Chancellor Olaf Scholz’s cabinet and would likely require a vote in Parliament. Some details are still under discussion, the officials said, while a cabinet decision would also need to wait on the outcome of an assessment of Germany’s energy needs that will be concluded in the coming weeks but which the officials said was a foregone conclusion. The government believes two key conditions allowing a temporary extension of the life of the three remaining plants have been met: Germany is facing a likely shortage of gas and letting the reactors operate longer poses no safety concern, the officials said.

New frontiers – Seeking out new energy supplies away from Russia, German chancellor Olaf Scholz is set to sign a green energy agreement with Canada’s prime minister Justin Trudeau on Aug. 23 in Canada’s Stephenville, where a Newfoundland-based company plans to build a zero-emission plant that will use wind energy to produce hydrogen and ammonia for export. The company behind the Newfoundland project, World Energy GH2, has said the first phase of the proposal calls for building up 164 onshore wind turbines to power a hydrogen production facility at the deep-sea port at Stephenville. Long-term plans call for tripling the size of the project. (National Observer)

ASIA PACIFIC

ESG reform — Australia’s financial services minister says he will investigate whether ESG definitions need to be legislated in the new year, Probono reports. Minister Stephen Jones said possible legislation was not a priority before the federal budget in October, as the government moves away from fossil fuels, but said there was definitely work that needs to be done. He said the government was specifically looking at funds, and the environmental part of ESH, noting that Australia was about five to 10 years behind the world in regards to ESG regulation. Jones noted that a lot of Australian companies were operating in other countries that had to comply with more stringent ESG related regulations.

Big battery bonanza – The world’s biggest fund manager, BlackRock, has selected Australia for the rollout of its largest investment in grid-scale batteries that will be crucial to driving the shift from coal to clean energy, Brisbane Times reports. BlackRock Real Assets, an arm of the $10 trillion ($14 trillion) investment giant, announced on Tuesday it intends to commit $1 billion for nine battery-storage projects spanning the nation’s east-coast electricity grid after agreeing to acquire Melbourne-based battery developer Akaysha Energy.

Scorching summer  Southwest China’s Sichuan Province, home to more than 80 million people, told 19 out of 21 cities in the region to suspend production at all factories from Monday to Saturday, as a heatwave drives up power demands, Reuters reports, citing a notice issued by the provincial government and the state grid. The purpose of power rationing is to prioritise residential power supply, the report said. Temperatures in the Chinese lithium hub have hovered above 40-42 degrees Celsius since last week, marking the worst heatwave in 60 years, data showed.

AMERICAS

IRA official – US President Joe Biden has signed the Inflation Reduction Act (IRA) into law, investing $369 bln to support clean energy, reduce healthcare costs and close tax loopholes on the wealthiest Americans. The IRA is the largest bill the US Congress has passed to reduce carbon emissions. The bill is a less ambitious version of Biden’s Build Back Better plan that was stuck in Congress for months, and wasn’t expected to get passed until a breakthrough in negotiations with conservative Democratic senators two weeks ago. However, the IRA includes significant concessions to the oil industry, including the continued expansion of oil fields. (Guardian)

VOLUNTARY

Closing on carbon – Carbon Streaming Corporation has closed its $20 mln streaming agreement with Community Carbon and UpEnergy Group to deliver fuel efficient cookstoves and water purifiers to eastern and southern African countries, according to the company’s press release on Tuesday. The previously announced deal involved a $6.5 mln upfront payment, with the remaining $13.5 mln being paid at various milestones of the project. The countries involved in the project are Uganda, Mozambique, Tanzania, Zambia, and Malawi.

AND FINALLY…

Sore about offshore – Offshore oil and gas operations in the Gulf of Mexico release much more methane pollution than operations on land, a study published in Environmental Research Letters finds. Permian Basin oil and gas drilling operations have a “methane loss rate” (a calculation of methane pollution relative to reported extraction) of about 4%, but the academic, NGO, and NASA researchers’ survey of 150 shallow water oil and gas platforms in the Gulf of Mexico revealed loss rates between 23% and 66%. Methane traps 80 times more heat in the atmosphere than CO2 over a 20-year timeframe. Offshore oil and gas operations account for about 30% of global extraction but monitoring of their pollution has been limited, largely due to their remote location. (Climate Nexus)

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