CP Daily: Wednesday August 24, 2022

Published 23:37 on August 24, 2022  /  Last updated at 03:23 on August 25, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

INTERVIEW: New initiative to build framework for low emissions hydrogen to access carbon markets

A recently launched initiative to facilitate access to carbon markets for low carbon hydrogen projects will involve the development of a methodological framework and a stakeholder engagement platform as part of the aim to introduce the use of carbon credits to accelerate the decarbonisation of hard to abate sectors with hydrogen use.

AMERICAS

WCI Q3 auction clearing price shocks to downside, breaking streak of all-time highs

The California-Quebec August current vintage auction settled at the lowest clearing price in a year, with the sale outcome marking the second-largest discount to the California Carbon Allowance (CCA) secondary market on record and coming in well below most traders’ expectations, according to results published Wednesday.

Enhanced California 2030 climate goal set for legislative committee vote Thursday

A California Senate committee will vote Thursday on whether to advance legislation that would adopt a more ambitious 2030 GHG reduction target for the state.

California offset issuance picks up pace, while price discounts narrow with CCA price setbacks

California regulator ARB doubled the compliance offsets distributed this week compared to its prior issuance earlier in August, according to government data published Wednesday, while offset discount values narrowed with WCI allowance prices falling from early week highs.

California electricity sector emissions rise in June as renewables wane

Electricity sector CO2 output in California remained beneath last year’s levels in June despite inching up, according to recent data from the California Independent System Operator (CAISO), as renewables’ share power generation declined month-over-month.

EMEA

Nigeria prioritises energy access in gas-focused transition light on carbon pricing detail

Oil rich Nigeria has unveiled its energy transition plan that targets an end to energy poverty by 2030 enshrines a 2060 net zero emissions goal, with key focus on power sector reform, gas and solar growth, and securing $10 billion of foreign investment per year to meet the climate neutral target.

Euro Markets: EUAs fail to bounce back above €90 amid surging energy prices

Carbon struggled to reverse the losses of the previous two sessions on Wednesday as buyers were thin on the ground, with a weak UK allowance auction adding some afternoon pressure and surging energy markets adding distress to the economic outlook.

VOLUNTARY

Project developer teams up with removals platform to scale biochar

A large project developer and a carbon removal credit platform have teamed up to scale biochar projects globally in the wake of certifier Verra publishing its methodology for this type of CO2 removal.

US carbon management firm nets $60 mln from global asset managers

A New York-based CO2 removals manager and advisor received a $60 mln investment from two groups of venture capital and asset management firms, the company announced Wednesday.

Central American forestry project gets lowest rating in firm’s latest update

A carbon credit rating agency has given a Verra-certified agroforestry project its lowest possible grading in its latest update.

ASIA PACIFIC

Japan eyes long-term commitment to nuclear amid shaky energy system, climate targets

Japan will restart more idled nuclear plants and will consider the construction of next-generation reactors to ensure energy security, marking a major policy shift amid domestic opposition to nuclear energy a decade after the Fukushima disaster, media reported Wednesday, citing government officials.

Carbon mineralisation tech gets take-up in South Korea

A Canadian carbon removal tech firm has signed a contract with a major Seoul-based construction company to roll out its carbon mineralisation technology in South Korea.

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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

Russian ‘bombs’ – US and UK banks have been among the leading investors in Russian “carbon bomb” fossil fuel projects, according to a database of holdings produced by the Leave it in the Ground Initiative (Lingo). It found more than 400 foreign financial institutions had provided $130 bln of support to the Russian companies – $52 bln in investment and $84 bln in credit. Russia is a hotspot of 40 carbon bombs, with 19 operated or developed by Russian companies backed by foreign finance. Campaigners in Ukraine said these institutions must immediately end such investments, to limit the funding of Russia’s invasion of Ukraine and to avoid climate breakdown. (The Guardian)

Ocean no obstacle – The leaders of Germany and Canada said Tuesday a new hydrogen pact will kick-start a transatlantic hydrogen supply chain, with the first deliveries expected in 2025. Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed the deal in the port town of Stephenville, Newfoundland. A Canadian company has plans to build a zero-emission plant that will use wind energy to produce hydrogen and ammonia for export. Hydrogen is seen as a component of Europe’s plan to reduce its reliance on Russian fossil fuels. (AP)

EMEA

Low and dry – Two-thirds of Europe is under some sort of drought warning, in what is likely the worst such event in 500 years. The latest report from the Global Drought Observatory says 47% of the continent is in warning conditions, meaning soil has dried up. Another 17% is on alert – meaning vegetation shows signs of stress. The report warns that the dry spell will hit crop yields, spark wildfires, and may last several months more in some of Europe’s southern regions. Compared with the average of the previous five years, EU forecasts for harvest are down 16% for grain maize, 15% for soybeans and 12% for sunflowers. The drought observatory is part of the European Commission’s research wing. Responding to it, the Commission warned that preliminary data suggests the current drought still appears to be the worst since at least 500 years. The ongoing heatwave and water shortages have “created an unprecedented stress on water levels in the entire EU”, Research Commissioner Mariya Gabriel said. “We are currently noticing a wildfire season sensibly above the average and an important impact on crops production. Climate change is undoubtedly more noticeable every year,” she added. The report warned that nearly all of Europe’s rivers have dried up to some extent. (BBC)

Making friends – Germany hopes Canadian LNG will help ease its shift away from Russian gas imports, Chancellor Olaf Scholz said on Tuesday, a day after Canada played down the economic viability and speed of setting up new export terminals, Reuters reports. On the final day of an official visit that started on Sunday, Scholz and Canadian prime minister Justin Trudeau announced a hydrogen alliance aimed at accelerating efforts to export the clean fuel to Germany by 2025. Canada currently has no LNG terminals, though two are being built on the west coast. Canada is in the process of increasing its natural gas export capacity by up to 100,000 barrels of oil equivalent per day by the end of the year as Europe tries to decrease its reliance on Russian supplies.

Belgrade made – Serbia has submitted to the UN a revised NDC, pledging a 13.2% economy-wide cut in GHG emissions compared to 2010 levels in 2030, up from its original NDC of a 9.8% reduction. The document did not say whether the nation intended to make use of international emissions trade under the Paris Agreement’s Article 6 but pointed out that about 70% its power generation came from emissions-intensive lignite burning plants. See Carbon Pulse’s NDC Tracker.

AMERICAS

Ban Hegar – Texas has banned BlackRock, UBS Group, and eight other finance firms from working with the state after finding them to be hostile to the fossil fuel industry. Glenn Hegar, the Republican state comptroller, on Wednesday named the firms he will prohibit from entering into most contracts with the state and its local entities after his office found they “boycott” the fossil fuel sector. The other companies on the list are BNP Paribas, Credit Suisse Group, Danske Bank, Jupiter Fund Management,, Nordea Bank, Schroders, Svenska Handelsbanken, and Swedbank AB. In addition, the comptroller’s office also designated nearly 350 funds that are subject to the same investment bans. (Bloomberg)

Feeling gassy – US gas-fired generation set three new daily records last month, the highest being 6.37 mln MWh generated on July 21, according to new analysis from the federal Energy Information Administration. Above-normal temperatures, reduced coal-fired generation, and new gas-fired capacity additions all contributed to the spike, EIA said. The rise happened “despite relatively high natural gas prices,” EIA noted. The previous gas-generation peak was set in July 2020, when prices were averaging around $1.77 per mln British thermal units; gas prices last month were more than four times higher. (Utility Dive)

In the mountain, in the valley – The US Federal Energy Regulatory Commission on Tuesday extended a permit for the $6.6 bln Mountain Valley natural gas pipeline project by four years in a win for the long-delayed project being built by a joint venture of Equitrans Midstream, NextEra Energy, Consolidated Edison, AltaGas, and RGC Resources. FERC unanimously ruled that the basis for its findings when it approved the pipeline in Oct. 2017 remain unchanged, including its environmental analysis. The federal agency gave the pipeline developers a “blank check,” according to Gillian Giannetti, an attorney with the Sustainable FERC Project, an advocacy group housed at the Natural Resources Defense Council. “At this point, what’s to stop a pipeline that runs out its construction clock due to inherent issues with the project from asking for 5, 10, 15 more years?” Giannetti asked on Twitter. (Utility Dive)

Chair recognise – Toyota on Tuesday said it recognised the California’s authority to set vehicle emissions standards under the US Clean Air Act, which will make it eligible for government fleet purchases by California. In 2019, Toyota joined other automakers in backing the Trump administration’s effort to strip California of the authority to set emissions standards, saying the rule provided “vehicle manufacturers with the certainty that states cannot interfere with federal fuel economy standards.” Seventeen U.S. states have agreed to adopt California’s tailpipe emissions rules and 15 backed its zero-emission vehicle requirements. California’s ARB Board on Thursday plans to adopt regulations to ban the sale of new gasoline powered passenger vehicles starting in 2035, a step US President Joe Biden’s administration declines to endorse. (Reuters)

ASIA PACIFIC

Hydrogen leaders – China and India have the potential to become world leaders in “clean” hydrogen, said Jane Nakano, senior fellow at the Washington, DC, based Center for Strategic and International Studies (CSIS), CNBC reports. “I think both China and India have potential to become major powers … not just as potential supplier and also exporters of clean hydrogen, but also [as] consumers [and] users of clean hydrogen,” Nakano told CNBC’s “Squawk Box Asia” on Friday. Nakano said there’s not much of a market for hydrogen at present, and that commercialising it will take a few years. She said the transportation and steelmaking sectors are potential consumers, on top of industries that are hard to electrify and decarbonise. However, she said widespread use is not yet a reality. “Most of the hydrogen is produced and conserved on the same site … there’s virtually no trading, if any, it’s really done in within small, small region.” Read Carbon Pulse’s analysis of a new initiative to open up low carbon hydrogen projects to carbon markets here.

More oil and gas – The Australian government will allow the oil and gas industry to explore new offshore sites covering 46,758 square kilometres of Commonwealth waters, ABC reports. Resources Minister Madeleine King said the release of offshore exploration acreage comprised of 10 areas across the Bonaparte, Browse, Carnarvon, and Gippsland basins. “The annual release of areas for offshore petroleum exploration supports ongoing investment in the nation’s petroleum sector, which is vital for the economy and meeting the energy needs of Australians,” she said. “At the same time as we strive to reduce emissions it must be emphasised that continued exploration for oil and gas in Commonwealth waters is central to alleviating future domestic gas shortfalls.” However, the Australian Greens were not impressed. “Labor likes to talk big on climate, but when it really matters they’ll do exactly what their fossil fuel donors demand,” Greens Senator Peter Whish-Wilson tweeted.

Missing the target – Taiwan failed to meet its emissions target for 2020 due to the increase in energy-related emissions, Central News Agency reported, citing the latest data on the island’s greenhouse gas inventories. Taiwan’s greenhouse gas emissions totalled 285.13 million metric tonnes of CO2e in 2020, representing a 1.88% decrease from the level of 295.55 million metric tonnes in 2005, slightly falling short of the 2% target initially set by the government, the report said. The energy sector, which accounted for nearly 90% of the economy’s total emissions in 2020, posted a 3.8% increase from 2005 levels, while other sectors saw declines compared to the benchmark year, according to the report.

AND FINALLY…

Half-millennium misery – Europe’s drought is the worst in almost 500 years, the European Drought Observatory reported Tuesday. The assessment, based on preliminary data to be confirmed at the end of the season, finds 47% of the continent is under warning conditions with 17% in a state of alert. In addition to fuelling wildfires and cutting agricultural yields, the drought has also restricted hydroelectric production and, perhaps ironically, reduced coal and oil shipments along rivers like the Rhine. The summer’s heatwave and drought have “created an unprecedented stress on water levels in the entire EU,” said Mariya Gabriel, a Research Commissioner with the European Commission. “We are currently noticing a wildfire season sensibly above the average and an important impact on crops production. Climate change is undoubtedly more noticeable every year.” (Climate Nexus)

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