CP Daily: Monday August 22, 2022

Published 23:05 on August 22, 2022  /  Last updated at 23:07 on August 22, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: Offset demand outpacing thin supply as California cap-and-trade deadline approaches

Record-low California Carbon Offset (CCO) issuances are running up against strong demand ahead of the state’s first interim cap-and-trade deadline in the post-2020 era, while credits that provide direct environmental benefits to the state (DEBs) are continuing to trend upward in price, according to developers and market participants.

EMEA

Euro Markets: EUAs drop 6.6% in heavier trading amid energy spike, liquidity concerns

EUA prices toppled 6.6% on Monday, falling away from recent record levels in active trading amid anticipation of September’s increase in auction volumes and the need for liquidity to support energy positions, as gas and power posted increases of as much as 25% in the morning after Gazprom said the Nord Stream 1 pipeline would close for a brief maintenance.

Senior analyst joins carbon project investor eyeing compliance markets

A senior carbon analyst has started work for a Swiss-based company investing in carbon offset projects that is also planning to move into compliance markets, Carbon Pulse learned on Monday.

VOLUNTARY

VCM Report: Offset prices rise sharply as liquidity picks up

The recovery in voluntary carbon market prices accelerated over the past week in the tailwind of the US Inflation Reduction Act that will shower £430 billion on an assortment of climate change measures, healthcare policies, and tax credits on the world’s largest economy.

Dutch firm signs offtake deal for Latam nature offsets

A Dutch carbon offset firm has agreed to sell voluntary carbon offsets from a Paraguayan REDD forest protection project in a deal designed to ensure the scheme’s long-term viability.

AMERICAS

California gasoline sales stay below 2021 levels, diesel sales decline further in May

Gasoline sales in California in May rose to their highest levels so far this year but stayed beneath 2021 totals, while diesel consumption continued to decline from records posted in March, according to state data released Friday.

California Assembly puts forth renewables proposal to oppose Diablo Canyon extension -media

California’s plans to shore up its power grid maybe coming to a fork in the road, with Democratic lawmakers seeking to go all in on renewables and rebuke Governor Gavin Newsom’s (D) proposal to extend the life of the Diablo Canyon nuclear facility, a media outlet reported Monday.

ASIA PACIFIC

China’s Sichuan extends power rationing, heightening concerns over energy security

Southwest China’s Sichuan province has decided to extend industrial power rationing by an additional five days amid the ongoing record heat wave, sparking concerns over the fragility of the country’s overall energy system.

Australia Market Roundup: Regulator makes large ACCU issuance as Inpex seeks special Safeguard treatment

The Clean Energy Regulator has issued some 723,000 new Australian Carbon Credit Units (ACCUs), as Japanese-headquartered gas company Inpex calls for LNG exemptions in the expanded Safeguard Mechanism and a local firm raises cash for future carbon projects.

ICYM

Huge REDD project plans to slash carbon credit issuance rate amid wider market revamp

One of the world’s largest REDD+ tropical forest protection projects has voluntarily slashed the number of offsets it issues amid a clash of two separate methodologies, which has reignited criticism of over crediting.

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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

Banishing banks – The 450+ financial institutions that signed up to the Glasgow Financial Alliance for Net Zero’s (Gfanz’s) change could be kicked out for failing to hit targets by a new independent panel, under plans set to be made public this year. Beefed-up checks by the UN on whether finance groups meet new criteria on ending coal financing and phasing out fossil fuels from portfolios could be announced at New York Climate Week in September and launched at the COP27 climate talks to be held in Egypt in November, according to Race to Zero, the UN group behind the plans that has introduced tougher criteria in June, including a bar on support for new coal projects. Existing corporate members will be required to comply with the latest criteria from June next year. (FT)

EMEA

Atomic exception – Extending the runtime of Germany’s three remaining nuclear power plants will do very little to help the country weather the looming gas supply crisis, economy and climate minister Robert Habeck has said. Letting the three plants operate longer would at best save 2% of Germany’s gas consumption, Habeck said. Other options for saving gas would be much more effective, Habeck argued,. However, due to the especially difficult energy supply situation in Bavaria, a limited extension of the Isar 2 plant near Munich could be an option, Habeck said, adding that a lack of wind power expansion in the state had contributed to Bavaria’ s supply squeeze. However, he stressed that the government had not yet made a final decision on whether or not any nuclear power extension will be allowed at all. (Dpa/ Clean Energy Wire)

Jet set fret – France’s transport minister Clement Beaune said he is ready to put banning private jet flights on the agenda of an Oct. 20-21 informal EU transport ministers meeting in October following public backlash from revelations regarding the private jet emissions of France’s wealthy. Beaune has clarified in an interview in Le Parisien that the EU must act as one on this matter to ensure that all “have the same rules and impact is maximised”. If an outright ban is not an option, Beaune said he is ready to “act and regulate private jet flights”. (EurActiv)

ASIA PACIFIC

Net zero partnership – Petronas and Malaysian utility TNB have signed a memorandum of understanding (MoU) to strengthen collaboration in driving innovative solutions towards decarbonisation in support of Malaysia’s aspirations to be a carbon-neutral nation by 2050, The Star reports. “This will be achieved mainly through a collaborative study for the development of green hydrogen ecosystem and carbon capture and storage (CCS) technology leveraging both organisations’ technical expertise and resources,” the companies said in a joint statement. Under the MoU, TNB and PETRONAS will conduct a joint feasibility study on the application of CCS solutions at TNB power generation plants. The parties will also look into developing green hydrogen fuel for power generation and intensifying efforts to co-create a green hydrogen ecosystem to provide cleaner energy solutions for Malaysia and markets overseas.

Ammonia deal – Singapore’s Jurong Port, Mitsubishi, and Jera concluded a Memorandum of Understanding (MoU) to jointly explore establishing a 100% ammonia direct combustion power plant on Jurong Island, Singapore, which houses the country’s chemical and energy industries, JCN Newswire reports. Under the MoU, a joint study will be conducted, where a 60 MW class gas turbine combined cycle plant fueled by 100% ammonia is planned to be set up to produce carbon-neutral electricity, as well as stimulate ammonia demand to be ready for ammonia bunkering in future. This MoU builds upon an initial agreement between Jurong Port and Mitsubishi signed in Aug. 2021 for a pre-feasibility study on ammonia direct combustion technology for green power generation, which was concluded successfully in March 2022.

Hydrogen and ammonia deal – SK E&S and SK Plug Hyverse—a joint venture (JV) formed in January of this year by SK E&S and Plug Power—will work with Korea Southeast Power Generation (KOEN) to cooperate with green hydrogen and green ammonia projects based on renewable energy resources in Korea and abroad, Green Car Congress reports. SK E&S signed a memorandum of understanding (MOU) with SK Plug Hyverse and KOEN regarding cooperation for carbon neutrality and the production of green hydrogen and green ammonia which will be consumed for co-firing at KOEN’s natural gas and coal based thermal power plants, by using electrolyzers to be produced in Korea by SK Plug Hyverse.

AMERICAS

Just getting started – Fresh off signing expansive climate legislation, US President Joe Biden and his administration are planning a series of executive actions to further reduce GHG emissions and help keep the planet from warming to dangerous temperatures, senior White House officials told the New York Times. Biden is on track to deploy a series of measures, including new regulations on emissions from vehicle tailpipes, power plants, and oil and gas wells, the officials said. In pushing more executive action, Biden is trying to make up for the fossil fuel compromises his party made on climate measures to pass the Inflation Reduction Act, which includes the largest single American investment to slow global warming. Gina McCarthy, the White House climate advisor, said that regulatory moves, combined with the new legislation and action from states, could help Biden meet his promise to cut GHG emissions by 50% compared to 2005 levels by the end of the decade.

SCIENCE & TECH

Agro-optimism – Planting trees across tropical farmland can help to restore biodiversity without sacrificing crop yields, according to a study published in the journal Nature Communications, which examines how agroforestry could impact local levels of biodiversity and crop yields for vanilla crops in Madagascar. The results show that increasing levels of species richness were not associated with a decline in vanilla yields, suggesting agroforestry could offer a “win-win” solution for farmers and biodiversity. However, the research also finds that establishing agroforests in existing forests is associated with a 23% decline in species richness – highlighting that the benefits of agroforestry hinge on the type of land it uses. (Carbon Brief)

AND FINALLY…

Oliver oil – Comedian John Oliver’s main segment on Sunday’s HBO show Last Week Tonight concerned carbon offsets, with the host criticising the practice. Oliver turned to the qualifying concept of additionality – the idea that an offset should provide an extra reduction of carbon that wouldn’t have happened any other way, like planting a tree that wouldn’t otherwise have been planted. A lot of cases for additionality are what Oliver called “shaky at best”, such as JP Morgan’s claim that it reached carbon neutrality in 2020. Doing so included buying $1 mln worth of offsets claiming to protect an area in Pennsylvania called Hawk Mountain preserve that wasn’t actually under threat of deforestation. “That probably should’ve been obvious from the fact that it was a preserve and not called the Hawk Mountain Chop Zone and Tree Murder Playground,” Oliver explained. Oliver also said that offset registries “aren’t really accountable to anyone”, and to prove the point, established his own carbon registry, Oliver’s Offsets, an organisation that’s “making big claims while doing very little, which honestly is entirely reflective of the system that we currently have”. (The Guardian)

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