CP Daily: Tuesday August 30, 2022

Published 23:26 on August 30, 2022  /  Last updated at 23:26 on August 30, 2022  /  Newsletter  /  No Comments

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

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TOP STORY

Boosted California 2030 climate goal heads to Senate floor, cap-and-trade review bill fails

California lawmakers on Monday evening advanced to the Senate floor a bill to strengthen the state’s 2030 GHG reduction target, while the Assembly turned down legislation that would have required regulator ARB to review the WCI-linked cap-and-trade programme.

EMEA

Euro Markets: EUAs post biggest one-day loss since May as auction volume hike, EU power plan loom

EUAs suffered their biggest one-day fall in three-and-a-half months on Tuesday as the imminent resumption of full auction volumes led to the fewest number of auction bidders for nearly six years, while energy prices fell as the market awaited a Brussels plan to uncouple gas and power prices.

Equinor, Wintershall to develop Germany-Norway CCS value chain

Upstream oil and gas companies Equinor and Wintershall Dea have teamed up to pursue the development of an extensive CCS value chain that will connect CO2-emitting establishments in Europe with offshore CCS sites in the Norwegian Continental Shelf (NCS), they announced on Tuesday.

Nigeria announces first steps towards a national cap-and-trade system

The Nigerian government has announced it has started discussions towards the establishment of an emissions trading scheme (ETS) under which carbon output will be capped across certain sectors of Africa’s biggest economy.

Namibia to develop carbon market with UN agency assistance to help meet upgraded NDC goals

Namibia will establish an enabling framework to develop carbon market-based options, such as an emissions trading scheme, to help the country implement its NDC targets, it was announced on Monday.

VOLUNTARY

VCM Report: Rally in nature-based offsets widens spread above renewable and technology credits

Standardised nature-based offsets rallied over the past week last week to extend a recent trend and catch up with over-the-counter trades, but there was little uplift in renewable or technology credit prices.

Global bank signs 10-year DAC deal with Climeworks

A major global bank has inked a multi-year agreement with direct air capture firm Climeworks that marks the latest in a string of similar purchases for removals credits from the firms growing portfolio.

European blockchain-based marketplace for carbon credits secures early funding

A Berlin-based startup has secured fresh pre-seed funding to build a nature-based carbon credits and impact claims marketplace secured on the blockchain, it announced Tuesday.

AMERICAS

NA Markets: CCAs register $2 swing on aggressive selling, renewables bill

California Carbon Allowances (CCAs) experienced significant volatility on Tuesday, as bearish influences from the global macro picture, EUAs, and a Golden State clean electricity bill gave way to renewed bidding on two separate occasions.

Oregon Clean Fuels Program sees fossil fuels outpace credit generators in Q1 2022

The Oregon Clean Fuels Program (OCFP) notched a credit shortfall during the January-March period, as deficit generation from petroleum-based fuels outpaced stronger renewable diesel volumes, according to state data published Monday.

Canadian bank launches carbon ETF with exposure to global allowances

A major Canadian bank on Tuesday announced a new exchange-traded fund (ETF) with international exposure to carbon allowance markets, having an initial focus on the EU ETS.

ASIA PACIFIC

Major bank backs tokenised carbon markets, leading role for Australia

Australia can improve the quality of its domestic market and lead the way internationally by setting up a marketplace for tokenised carbon credits, according to the chairman of one of the country’s “big four” banks.

Taiwan court convicts couple for $3.3 mln carbon credit investment scam

A couple has been convicted by a Taiwanese court for running a carbon credit investment scam and defrauding over 70 victims out of more than NT$100 million ($3.3 million).

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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

Pakistan flooding – The UN and Pakistan launched an appeal on Tuesday for $160 mln in emergency funding for nearly a half million displaced victims of record-breaking floods that have killed more than 1,150 people since mid-June. Pakistani authorities backed by the military, rescuers and volunteers have been battling the aftermath of the floods that have affected more than 33 million people, or one in seven Pakistanis. According to initial government estimates, the devastation caused $10 billion in damage to the economy. A day earlier, the International Monetary Fund’s executive board approved the release of a much-awaited $1.17 billion for Pakistan. Several scientists say the record-breaking flooding in Pakistan has all the hallmarks of a catastrophe juiced by climate change. (AP)

Subsidise this – Major economies sharply increased support for the production and consumption of coal, oil and natural gas in 2021, with many countries struggling to balance longstanding pledges to phase out inefficient fossil fuel subsidies with efforts to protect households from surging energy prices, according to analysis from the OECD and IEA. The new data show that overall government support for fossil fuels in 51 countries worldwide almost doubled to $697.2 bln in 2021, from $362.4 bln in 2020, as energy prices rose with the rebound of the global economy. In addition, consumption subsidies are anticipated to rise even further in 2022 due to higher fuel prices and energy use. OECD analysis of budgetary transfers and tax breaks linked to the production and use of coal, oil, gas and other petroleum products in G20 economies, meanwhile, showed total fossil fuel support rose to $190 bln in 2021 from $147 bln in 2020. Support for producers reached levels not previously seen in OECD tracking efforts, at $64 bln in 2021 – up by almost 50% year-on-year, and 17% above 2019 levels. Those subsidies have partly offset producer losses from domestic price controls as global energy prices surged in late 2021. The estimate of consumer support reached $115 bln, up from $93 bln in 2020.

The Early November – US climate envoy John Kerry has urged Chinese president Xi Jinping to resume climate talks, the Financial Times said on Tuesday. Kerry told the newspaper he was hopeful the countries could “get back together” ahead of the UN COP27 climate summit in November. “This is the one area that should not be subject to interruption because of other issues that do affect us,” Kerry said. (Reuters)

EMEA

Modal shift – The popularity of Germany’s temporary €9 public transport ticket has not only shown that people are willing embrace public transport and stop using their cars if such tickets became permanently accessible, but has also led to a dramatic decrease in CO2 emissions, according to a market analysis carried out by the Association of German Transport Companies (VDV), railway group Deutsche Bahn and research institutes Forsa and RC Research on behalf of the federal and state governments. The ticket saved around 1.8 million tonnes of CO2 for the three months it was introduced, about as much CO2 as a year-long speed limit on the autobahn would have, VDV said. (Clean Energy Wire)

Contracts dispute – Russia’s Gazprom will reduce gas deliveries to Engie from Tuesday in a dispute over contracts, the French utility said, deepening winter energy supply concerns. Europe is already on notice that Gazprom will shut off the Nord Stream 1 gas pipeline to Germany from Aug. 31 to Sep. 2 for maintenance and there is some concern that Moscow, which has already cut the pipeline’s supply to just 20% of capacity, may step up pressure by delaying the restart. In its statement, Engie gave no details on the nature of the dispute between it and Gazprom over the application of contracts. Engie’s deliveries from Gazprom have already decreased substantially since the beginning of war in Ukraine in February, with recent monthly supply of 1.5 TWh, the utility said. In 2021, Gazprom supplied 121 TWh of gas to Engie, or 20% of its total procurement. (Euractiv)

FEED the plant – Mitsubishi Heavy Industries (MHI) has secured an engineering and design contract for a 910 MW gas-fired power and CCS plant planned at Peterhead in Scotland by developers SSE Thermal and Equinor. MHI will provide front end engineering and design (FEED) for the technology. The new scheme is expected to capture up to 1.5 mln tonnes of CO2 per year, which would be transported and sequestered underground in the North Sea. (Energy Voice)

ASIA PACIFIC

Green hopes – Iron ore billionaire and green energy evangelist Andrew Forrest says “energy must change” and has insisted his plans to deliver 15 Mt of green hydrogen a year by 2030 still stand, even though the company is yet to fill in the details of how exactly that will be done, Renew Economy reports. At a briefing for the company’s (Fortescue Metals) annual results, which delivered a $6 bln net profit in fiscal 2021/22 and a $A2.3 bln dividend to Forrest himself, the now executive chairman of Fortescue Metals says his vision of a green energy future, including renewables and green steel, is undiminished. “Fortescue can and will lead the green energy revolution,” Forrest said. “Energy must change. We have no choice. I mean, if you’re advocating for anything else, then you’re either economically or scientifically ignorant, or both.” He later added: “We chop through, like all the others, a few billion dollars a year in fossil fuels. We literally smoke it. It will be a great day, and I think it’s serious revenue and margin improving day, when we can make all our own fuels.” Forrest told analysts that informal discussions with global funds managers indicated a potential value of $20 billion for its Fortescue Future Industries offshoot, which is leading the company’s charge into green energy.

Green hydrogen plan – Indian renewables developer, Avaada Group, will invest around $5 billion to build an integrated green hydrogen and ammonia plant with captive renewable energy capacity in Rajasthan, PV magazine reports. The company recently signed a memorandum of understanding with the state government on the proposed investment. Ravi Verma, senior executive vice president of Avaada Group, told pv magazine that the company will set up around 6 GW of renewable energy capacity for captive consumption by its green hydrogen and ammonia site.

Capture more – Sinopec, China’s state-controlled oil refining and petrochemical giant, has put into operation the country’s largest carbon capture, utilisation and storage (CCUS) facility at its Qilu refinery, Reuters reports. Around 11 million tonnes of carbon dioxide will be injected into the oilfield over the next 15 years, boosting crude oil production by nearly 3 Mt, according to the company’s estimate. Sinopec, which captured and stored more than 1.52 Mt of carbon dioxide last year, aims to build another two pilot projects over the next few years.

AMERICAS

No Maine, no gain – Maine’s high court ruled Tuesday that part of a referendum blocking the controversial $1 bln Central Maine Power corridor was unconstitutional, but backers must win in court again to keep it on track. In a 39-page ruling, five members of Maine’s Supreme Judicial Court said the portion of the Nov. 2021 referendum that retroactively prohibited the New England Clean Energy Connect corridor project, which had previously secured a number of approvals, infringed on CMP’s rights to build the project. The anti-corridor referendum overwhelmingly passed and halted construction. The result still leaves the project in limbo, and the court’s decision sends the project to a lower court for further proceedings. Massachusetts, which is paying for the corridor, has given CMP and allies until the end of 2023 to fulfil the project that will help that state meet clean energy goals and supply power to the regional grid. Any delay helps corridor opponents who hope Massachusetts will seek other options. (Bangor Daily News)

VOLUNTARY

Timber time – Forest carbon platform NCX has announced it has completed the first cycle of the Natural Capital Exchange. In partnership with 119 landowners across the southeastern US, the programme sequestered over 2 Mt of carbon across 1.17 mln acres (473,000 hectares) of forest by electing to defer their timber harvests for one year. Participating landowners received nearly $2.5 mln for deferring timber harvests for one year starting Mar. 2021. Payments were delivered at the end of the project and for the amount of verified carbon actually delivered. At the end of one year, 105 landowners delivered at least 90% of agreed carbon, while 69 of those landowners achieving 100% of their target. NCX reported an over delivery by roughly 7% of landowners.

Blending ruled out – Austrian Airlines has had its ‘carbon-neutral’ advertisements pulled over greenwashing concerns. The airline, part of the Lufthansa Group, ran a series of digital advertisements earlier this year touting ‘carbon-neutral’ flights from Vienna to Venice for the Biennale art fair. Graphics used to promote the tickets claimed that Austrian Airlines was using ‘100% Sustainable Aviation Fuel (SAF)’ for the flights. This is despite the fact that international regulations limit the blending of SAF to 50% for commercial flights, with most airlines using far lower proportions. Austrian Airlines has stated that its offer actually enables customers to contribute the equivalent of the amount of fuel needed to offset 100% but the Austrian Advertising Council (AAC) did not accept this argument. (edie)

SCIENCE & TECH

SAF dealers – Sustainable aviation fuel (SAF) provider DG Fuels will supply US airline Delta with 385 mln gal (1.5 bln L) of a new low-emissions sustainable aviation fuel, the companies said in a release. The production of DG Fuels SAF is estimated by the firm as 85% lower in lifecycle greenhouse gas emissions versus conventional jet fuel. The agreement will help accelerate SAF production, which remains nascent. DG Fuels stated that current existing supply would only operate a fleet Delta’s size for a single day. The agreement should also help Delta toward its recently-validated Science Based Targets initiative goal to reduce scope 1 and 3 greenhouse gas emissions from the process of jet fuel production by 45% per revenue tonne kilometre by 2035 from a 2019 base year. Anticipated to begin delivery by the end of 2027, DG Fuels plans to deliver 55 mln gal of SAF annually for seven years, with the fuel to use timber waste, corn stover and cotton gin waste as feedstock.

AND FINALLY…

Land, no – Greenland is on course to raise global sea levels by at least 10.6 inches (26.9 cm) during the next century, even if human-caused warming were to cease immediately, a new study finds. The study combines satellite and in-situ measurements during the past 20 years of the retreating snow line around the edge of the ice sheet with knowledge of how the ice sheet will adjust over time to such changes. The study also contains a warning: If Greenland’s recent high melt years, such as 2012 and 2019, become more common, the minimum sea level rise would be far higher, at about 2.6 feet (0.8 m). (Axios)

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