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Provisions in the US Inflation Reduction Act that tie the extension of clean energy tax credits to CO2 reduction requirements and exempt some oil and gas producers from a methane fee will not hamstring the GHG reduction potential of the landmark climate package, experts told Carbon Pulse.
Calls for a freeze of the EU ETS have grown louder as European leaders scramble to tackle soaring gas and power prices while climate policies take a temporary backseat, with Poland blaming the bloc’s carbon market for worsening inflation and exacerbating energy poverty.
Northern Lights has made the world’s first cross-border commercial agreement to transport and store CO2, the Norwegian CO2 storage company announced on Monday, signing a deal with a Netherlands-based facility to deliver CO2 from the site for sequestration in the offshore venture.
Singapore’s National Environment Agency (NEA) has signed two Memorandums of Understanding (MoU) separately with offset standards agencies Verra and Gold Standard as part of the island-state’s efforts to operationalise Article 6 guidelines of the Paris Agreement.
New Zealand carbon allowances have risen to fresh record highs amid expectations that the government will accept recommendations from the independent Climate Change Commission (CCC) to significantly increase the cost containment reserve (CCR) trigger price level at future auctions.
One of China’s biggest oil companies has agreed to buy millions of forest carbon credits from a state-owned forestry group based in the Guangxi Zhuang Autonomous Region, as it prepares to be brought into the national CO2 emissions trading scheme.
Australia on Monday began the review of the domestic carbon credit scheme with the release of a consultation paper seeking views on the integrity of the market and potential changes for the government to consider.
California legislators on Sunday published a raft of climate- and energy-related bills just days ahead of the end of session, with the proposals including a direct emissions reduction goal for 2045 and an extension for the Diablo Canyon nuclear power plant.
The Ontario Ministry of Environment, Conservation, and Parks (MECP) on Friday published draft regulatory amendments to the province’s Emissions Performance Standard (EPS) in order to align with the updated federal carbon pricing benchmark and output-based pricing system, without any mention of incorporating carbon offsets into the programme for large stationary facilities.
RGGI compliance entities significantly increased their long positions during the second quarter of the year, according to a watchdog report published Monday, though emissions output in the US Northeast and Mid-Atlantic carbon market appears to be outpacing their allowance holdings.
*** As a result of today’s UK public holiday, the publication of the weekly VCM Report is due on Tuesday ***
Job listings this week
- *Technical Specialist, Social & Equity Rights, Climate & Nature Linkages, Fauna & Flora International – Cambridge
- *Manager, Corporate Responsibility, Gold Standard – Remote, UK based
- *Analyst I, Carbon, Anew – Calgary
- *Freelancer (m/f/d) Carbon Project Development Africa, Volkswagen ClimatePartner GmbH – Africa (Flexible)
- *Freelancer (m/f/d) Carbon Project Development Brazil, Volkswagen ClimatePartner GmbH – Brazil (Flexible)
- *Freelancer (m/f/d) Carbon Project Development China, Volkswagen ClimatePartner GmbH – China (Flexible)
- Article 6 Regional Expert, World Green Economy Organization – Dubai
- Carbon Project Analyst, Intern, Corporate Carbon – Sydney
- Senior Environmental Planner, Cap-and-Invest Program and Linkage, Washington Department of Ecology – Lacey
- Chief Marketing & Communications Officer, SustainCERT – Amsterdam
Or click here to see all listings
BITE-SIZED UPDATES FROM AROUND THE WORLD
Vietnam in the spotlight – COP26 President Alok Sharma is visiting Viet Nam this week to meet with key ministers to drive forward discussions on a Just Energy Transition Partnership (JETP) and to see the impacts of climate change in the country, the UK government announced. The Viet Nam JETP will be a long term political agreement between the Viet Nam government and the UK, EU, France, Germany, Japan, and the US to support Viet Nam to accelerate its transition away from coal as part of the country’s commitment to its 2050 net zero target. The Partnership will be underpinned by clear plans to deliver a just energy transition and catalyse clean energy investment, offering Viet Nam the opportunity to become a world leader in renewable energy. Read Carbon Pulse’s reporting on how South Africa’s $8.5 bln JETP multi-faceted funding package announced last year is being viewed as a potential blueprint for driving climate action in big emitting emerging nations.
Way out – The Austrian government calls for decoupling gas from electricity pricing, arguing that the way the EU electricity market works means prices continue to rise due to record gas costs, Euractiv reported. The EU’s 25-year electricity market design means that commodity prices rise and fall in parallel. The electricity price is determined every 30 minutes by the marginal cost of the last generating unit to be turned on to meet demand. This is often a gas power plant with higher marginal costs than units such as renewables which are turned to first. As a result, the electricity price is set based on the cost of running gas power which is currently expensive and subject to supply insecurity.
Back to oil shale – Russia’s war in Ukraine is prompting Estonia to turn back to dirty oil shale as it deals with soaring energy prices and the need to replace energy imports from Moscow, Politico reported. Estonia is the only country in the world where oil shale historically supplied a majority of energy, accounting for 73% of primary energy supply in 2018. But burning oil shale, which has a higher carbon intensity than coal, gave Estonia the second-highest per capita carbon dioxide emissions in the EU in 2020. The oily rock can be mined and burned for power or heating like coal, transformed into liquid fuels, or used for chemical manufacturing.
Green clamour – Swedish steel venture H2 Green Steel said on Monday it has raised €190 mln from a group of investors for building a fossil fuel-free steel plant in the north of Sweden that would start production in 2024. H2 Green Steel plans to have an annual production capacity of 5 mln tonnes of green steel by 2030 that could reduce 95% of CO2 emissions compared with normal steelmaking. The new round was co-led by investors including AMF, GIC, Schaeffler and Altor. Swedbank Robur Alternative also participated in the equity raise. H2 Green Steel has pre-sold about 60% of its initial volumes. (Reuters)
Merit order move – Germany’s economy and climate ministry is pondering a new power market design for the country that decouples electricity prices from gas prices in response to the current turmoil on energy markets exacerbated by Russia’s war on Ukraine, reported Handelsblatt. A ministry spokesperson told the newspaper that a “groundbreaking reform” is being planned that would shield power customers from rising gas prices, as households and businesses alike increasingly use electricity-based solutions as alternatives to fossil-fuel powered technology. (Clean Energy Wire)
We’ve got your back – A subsidiary of Chinese state-owned insurance group PICC has introduced the country’s first insurance product designed for companies regulated by the ETS market, namely around 2,200 emitters in the power sector, China Insurance reported. The new product, launched last week, will cover the losses associated with emissions allowances that are generated unexpectedly due to natural disasters or accidents, the report said. The insurer said it has started a trial run for the new product, though the details remain unclear, according to the report.
Buying green – Beijing has introduced the first ‘carbon inclusive supermarket’ at a store operated by local grocery store chain Suning, as part of the Chinese capital’s small-scale offset scheme that encourages a low-carbon lifestyle, Tanpaifan reported. Consumers will receive coupons issued by local financial institutions if they purchase energy-efficient appliances at the supermarket, the report said. The absence of a functioning national offsetting programme in China has pushed some municipal governments, including Beijing, to develop their inclusive schemes over the past few years.
Coast to coast – Two commonwealths are legally bound to follow the state of California in banning the sale of new internal combustion-powered vehicles by 2035, with additional states likely to follow suit. A major Massachusetts climate law signed earlier this month by Republican Gov. Charlie Baker includes a provision requiring all new vehicles sold in the Bay State to be EVs or hydrogen-powered by 2035 if California adopted such a measure. Similarly, a 2021 Virginia law adopted California EV sales targets, and the Old Dominion’s Republican assistant Attorney General has concluded it is “statutorily and regulatorily aligned with California” and is “bound” by the new targets. Virginia Republicans tried to repeal the 2021 law last year, despite its support from the powerful Virginia Automobile Dealers Association. While the new California standards have been generally well-received by the automotive industry, unlike last year, Virginia now has a Republican governor and a Republican-controlled lower chamber eyeing legislation in 2023 to decouple Virginia from California’s standards. (Climate Nexus)
Texas topper – International energy producer Occidental and its subsidiary 1PointFive are set to begin construction on the world’s largest direct air capture (DAC) plant in Ector County, Texas, the company announced. The DAC plant is expected to be operational in late 2024, and capture up to 500,000 tCO2/yr with the capacity to scale up to 1 Mt/yr. 1PointFive aims to deploy 70 DAC facilities worldwide by 2035 under current compliance and market scenarios. The company has advanced product sales for the plant, including carbon removal credit purchases from Airbus, Shopify, and ThermoFisher, while Oxy has reached an offtake agreement with SK Trading International for an opportunity to purchase net zero oil.
Cryptic carbon – The potential for offset demand is stronger in Proof of Work (PoW) blockchain firms vs. Proof of Stake (PoS) networks as crypto firms seek to reduce their carbon footprint with the use of offsets, a blockchain analysis report suggests. PoW systems such as Bitcoin and Ethereum consume as much as 89kGWh and 17kGWh of energy annually vs. PoS chains such Solana that uses 1.9GWh/yr, while Polkadot and Tezos consuming as little as 0.1GWh/yr each.
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